Texas Dealer, February 2014

The Impact of Special Finance In This Issue: –M ichael W. Dunagan on Voluntary Returns & What You Can Do –R ecords Retention Guidelines –M anaging Mobile Devices in the Workplace

NEED

FRESH

OFF-LEASE INVENTORY?

Find more than 10,000 cars weekly on ADESA.com Honda Remarketing • Acura Remarketing • GM Financial Toyota Financial Services • Lexus Financial Services • Ford Motor Credit Volkswagen Credit • Audi Financial Services • Porsche Financial Services Hyundai Motor Finance • Kia Motors Finance Southeast Toyota Finance/CenterOne • and more

LOG IN TO ADESA.COM TO BUY TODAY

© 2013 ADESA, INC.

Call 888-526-7326 to register or get help

Protections Plans

About Us

Reviews Start A Claim

Join the Team

News

Search... info@warrantys.com

Password:

Username:

eContract Login

Password:

Phone:

Forgot Username?

Preferred Dealer Login

Forgot Password?

CLICK HERE TO COMMENT

take a moment How are we doing? Please & gives us feedback

Contact Us

And helping dealers keep customers happy.

Start your search

Tell us what you’re looking for and we’ll spread the word among dealerships in your area

Looking for a dependable used car?

find anywhere. And you’ll be covered everywhere in the continental U.S.! Learn More...

When you see a pre-owned car, truck, SUV or motorcycle that’s covered by a Preferred Warranties extended service plan, you can be sure that the vehicle – and the dealership offering it – are among the best you’ll

Check out your choices!

The best protection plans for your vehicle and budget.

– Jennifer S. Morrisville PA

“I just wanted to let you know how much I appreciate your staff.”

Real People.

Real Service.

Home

800.548.1121

Protection that travels with you everywhere in the continental U.S.

caution: This website is turning heads.

We could tell you about all the cool stuff we’ve added, but then you wouldn’t need to visit.

www.warrantys.com

Scan Me!

Volume XIII

2014 TIADA Board of Directors

/

Issue 2

President Elect Brent Rhodes/Fiesta Motors 5150 Industrial Way Drive Buda, TX 78610 Office: 512.312.2201 Email: brent@fiestamotors.net

contents

Secretary HL Hensley/Automax of Lubbock P.O. Box 3040 Lubbock, TX 79452 Office: 806.744.3533 Email: hl@gospac.com

5 Officers’ Message

Treasurer Kathrine Tolsch/CICO Auto Sales 11050 Harry Hines Blvd.

Dallas, TX 75229 Office: 214.352.9282 Email: cicoauto@verizon.net

8 On The Cover: The Impact of Special Finance

Vice President, West Texas (Region 1) James Hobson/H-Town Motors 3714 Dyer Street El Paso TX 79930 Office: 915.564.9797 Email: htownmotors@sbcglobal.net

15 New Members

Vice President, Dallas (Region 3) Kevin Mims/VP Auto Sales 2921 S. Garland Ave. Garland, TX 75041 Office: 972.864.1300 Email: kevinm@vpautosales.com Vice President, Houston (Region 4) Ryan Winkelmann/BJ’s Autohaus 5005 Telephone Road Houston, TX 77087 Office: 713.641.0980 Email: ryan.winkelmann@sbcglobal.net Vice President, Central Texas (Region 5) Robert Beck/Stop N’Drive Motors 711 N. General McMullen Dr. San Antonio, TX 78228 Office: 210.432.1101 Email: stopdrive@texas.net Vice President, South Texas (Region 6) Trey Crouch/Trey Crouch’s Wheels On Credit 636 E. Business 83 McAllen TX 78501 Office: 956.972.0700 Email: trey@wheelsoncredit.com Vice President At Large Greg Zak/Dixon Motors 7902 North Freeway Houston, TX 77037 Office: 281.931.1300 Email: gzak@windstream.net Vice President At Large Sonny Paredez/Discount Auto Center 7203 NW Loop 410 San Antonio, TX 78245 Office: 210.680.5600 Email: sonnyparedez@yahoo.com TIADA Executive Director Jeff Martin PO Box 127/Round Rock 78680 Office Hours M-F 8:30am - 4:30pm 800.442.5944 • Fax 512.244.6218 jeff.martin@txiada.com

Fe b r u a r y 2 014

texasDealer

President Michael Thomasson/Mike Carlson Motor Company 264 Exchange St. Burleson, TX 76028 Office: 817.366.9578 Email: mthomasson@mcmcauto.com

Vice President, Fort Worth (Region 2) Tommy Gregory/Abilene Used Cars Sales Inc. 497 E.S. 11th Abilene, TX 79602 Office: 325.676.8000 Email: aucsinc@sbcglobal.net

/

by Kathrine Tolsch, TIADA Treasurer

6 Upcoming Events Compiled by Texas Dealer staff

18 Local Chapters 18 2014 Auto Auction Directory & Resource Guide 20 Regulation Matters: Recordkeeping Requirements

by Danny Langfield

27

T ips for Managing Mobile Devices in the Workplace

by ADP Small Business HR Services

31

HPH 2013 is In the Rearview Mirror; B What’s Ahead?

by Kenneth Shilson, CPA

33 Fines & Violations 41 Legal Corner: Options for Dealing With the Voluntary Return of Collateral

by Michael W. Dunagan

46 Behind the Wheel

by Jeff Martin

What’s happening at w w w . t x i a d a . c o m ?

Membership renewal – that’s what’s happening! When you login, your welcome screen displays a reminder of your membership status.

If your membership was only current through 12/31/13, click the renewal link and easily renew your membership online for 2014.

The Editor of the Texas Dealer magazine is Danny Langfield, Deputy Executive Director of TIADA. To change your address for subscription and/or for other TIADA products, call the TIADA state office at 800.442.5944, 512.244.6060 or fax 512.244.6218. E-mail: info@txiada.com. New Membership/Subscriptions: If you are a member of TIADA, you may receive this magazine free of charge. Membership year runs from Jan 1 to Dec 31. Back issues are available for $20 each subject to availability. Send a check or money order, along with your name and mailing address to TEXAS DEALER, Attn: Back Issues, 9951 Anderson Mill Rd., Suite 101, Austin, TX 78750. Sorry, no billing. Notice to all members concerning services and products: TIADA was established in 1944 to develop professional standards of service and conduct for the independent auto industry. Opinions expressed herein are not necessarily those of the TIADA management, the Board of Directors or the membership. Likewise, the appearance of advertisers or their indemnifications of TIADA does not constitute endorsement of the products or services featured.

officers’ message

by Kathrine

I’m Not a Politician

Tolsch

CICO Auto Sales (Dallas) TIADA treasurer

I

can only imagine the personal fortitude, dedication and focus it must take to enter the field of politics — the negotiating, staying abreast of so many different issues, attending to the needs of your constituents, and working with lobbyists.

My hat goes off to the diligent men and women who chose to lead our municipalities and governments.

I may not be a politician, and I certainly don’t consider myself an activist, but I’m always willing to discuss what I believe in, and what is best for my family, community or business.

When my children were younger (boys — 14 and 17 now), I was actively involved in their schools, PTA programs, Cub Scouts, and sports teams. I believed that by staying involved in those organizations I would know how they were being influenced, what they were being taught, and who their role models were.

In the last few years, my attention has turned to my community and my business. First by getting involved in my local dealer chapter, and then by attending TIADA events. I had no intention of ever lobbying, or

visiting with any elected officials. I am just another dealer, looking to stay educated on compliance, business trends, and continuously improving my dealership.

Several years ago our local Dallas Chapter invited the newly elected Tax Assessor Collector, John Ames, to speak. He’s a very engaging speaker. He and I chatted for a while at that first meeting, and today I consider

...the interim between legislative sessions is the ideal time to get to know your legislators.

February 2014

T e x a s

D e a l e r

5

Upcoming Events TIADA Dealer Academy February 2014 10 Keeping Your Dealership

June 2014 9 Keeping Your Dealership

March 2014 24 Dealer 101: Nobody Told Me That!

Other TIADA Events

Legal & Compliant Crowne Plaza Hotel 12801 Northwest Frwy.

Houston, TX 77040 713.462.9977 Online registration available at www.txiada.com

Hilton San Antonio Airport 611 N.W. Loop 410 San Antonio, TX 78216 210.340.6060 Online registration available at www.txiada.com

April 2014 28 Keeping Your Dealership

Legal & Compliant Radisson Hotel Fossil Creek 2540 Meacham Blvd.

Fort Worth, TX 76106 817.625.9911 Online registration available at www.txiada.com

May 2014 12 Dealer 101: Nobody Told Me That!

Crowne Plaza Hotel 12801 Northwest Frwy.

Houston, TX 77040 713.462.9977 Online registration available at www.txiada.com

6

Legal & Compliant Hilton San Antonio Airport 611 N.W. Loop 410 San Antonio, TX 78216 210.340.6060 Online registration available at www.txiada.com

April 2014 21 TIADA Board of Directors Meeting

Austin, TX

July 2014 27–30 TIADA Annual

Conference & Expo Hyatt Regency Lost Pines Resort & Spa 575 Hyatt Lost Pines Road Lost Pines, Texas 78612

him a friend — and know I can call him anytime. Coincidentally, I had just become part of TIADA’s “grassroots” efforts.

I then decided to participate in TIADA’s Lobby Day in Austin. I wanted to see what this was all about. But I had absolutely no idea what I was doing or what I would say to our representatives. TIADA staff was incredible! We had a briefing session that morning to bring us up to speed on the legislative issues. They had appointments set with all the legislators from my area. I was teamed with 3 other dealers, some with lobby day experience, and given talking points about all the relevant legislation we supported or opposed. It was an incredible day!

I discovered these legislators are just regular folks trying to do the best job they can, just like you and me. And they want to hear from us. They want to know how certain legislation can affect our business.

I quickly found out, I did know what to say. I just talked about what I know best: My business, what’s good for it, what’s not and why. For them, it was an opportunity to be educated on the issues.

And they really listened.

They were so willing to listen that I was able to call my representative’s office a few times that same session to follow-up on legislation we opposed, which ultimately never made it out of committee for a vote.

They really listened.

How does this affect you? Well, the interim between legislative sessions is the ideal time to get to know your legislators. If you are interested, get in touch with Jeff Martin at the TIADA office and find out how you can get involved.

I’m not a politician nor am I an activist, but if I’m not talking to my representatives, they will listen to whoever is talking. What are your legislators hearing? Are you talking?

T e x a s

D e a l e r

February 2014

ATTENTION STUDENTS!!!

$1,000 TIADA

SCHOLARSHIP

SCHOLARSHIP APPLICATION

DEADLINE

May 1, 2014 {Applications and/or any required documents received after May 1, 2014 will NOT be accepted.}

Date: Name:

DOB:

Address:

Criteria and Guidelines 1. Each applicant must be entering or currently enrolled in an accredited college or a trade school. Proof of enrollment must be included with this application.

City:

State:

Zip:

State:

Zip:

Telephone Number: High School Last Attended: Address:

2. Each applicant must provide a letter from their TIADA member sponsor that includes the sponsor’s address and Saturday phone number.

City:

3. Each applicant must complete the application form.

Other High Schools Attended (Names and Addresses):

4. Applicant must be in the top 25% of class.

If applicant is currently enrolled, provide college transcripts with official university imprint. In addition, a copy of high school transcripts is required for applicants who are college freshmen.

5. Provide a detailed description of participation in any academic, honorary, civic or extracurricular activities in college. In addition, a detailed description of high school activities is required from college freshmen along with a college acceptance letter.

6. Compose an essay of no more than two typed, double-spaced 8 ½” x 11” pages. The essay should discuss the applicant’s relationship with their TIADA scholarship sponsor, current education goals and future aspirations as it relates to the applicant’s subject/training area.

7. Provide at least two (but no more than three) letters of recommendation, no older than one year, from college/high school faculty, employers or other appropriate sources (not related).

February 2014

T e x a s

D e a l e r

Dates of Attendance: Date of Graduation:

College(s) you are attending or plan to attend for admission:

Parents Name(s): TIADA Member Name (Sponsor): TIADA Member Company Name: TIADA Member Address: City:

State:

Zip:

Sponsor Signature Should you have any questions, please contact TIADA at 800.442.5944. Please return the completed application with all required documents to: TIADA Attention: Scholarship Applications 9951 Anderson Mill Rd., Suite 101 / Austin, TX / 78750

7

on the cover

The Impact of Special Finance Compiled by Texas Dealer staff

F

or the last few years, the vehicle financing industry has felt the effects (both positive and negative) of low interest rates and easy money availability.

Special finance companies have long been an integral part of the vehicle credit landscape; however, the deeper buying of some of these companies into the subprime and deep subprime markets has created a ripple effect for both independent retail and BHPH dealers. We asked a few of our dealer and associate members to share their thoughts on this “subprime effect� as it pertains to special finance and the industry as a whole.

Dealers:

Mike Brill, owner of B&B

Automotive in Croydon, PA, is a successful multi-lot BHPH operator who has served on numerous national dealer panels.

Blake Ingram is the owner of the BHPH operations Auto City and Easy Credit Auto Sales in the Dallas 8

metro area. He is also a current member of the board of directors of the Texas Department of Motor Vehicles.

Greg Phea is a 27-year veteran of the used car business. Greg is the GM and president of Austin Rising Fast Motor Cars, an independent retail store specializing in late model foreign and domestic vehicles.

Mike Parker owns Parker Motor Co. in Victoria, TX, primarily a BHPH used vehicle dealership.

Prior to April 1, 2002, Mike was a commercial banker, having spent 37 years in the banking industry.

Greg Zak is a principal with Dixon Motors in Houston. Prior to opening the dealership, Greg worked in the financial sector for 14 years, including as senior credit officer for Lockwood National Bank.

How would you characterize the impact of special finance on the used car industry in Texas?

Mr. Brill: As reported by Ken

Shilson, from January, 2013 to November, 2013, BHPH has gone from 16.4% market share to 10.7%, 34% decrease!!! That is significant to say the least.

T e x a s

D e a l e r

February 2014

Mr. Ingram: Over the years,

special finance has always been somewhat cyclical as investors push money into and then out of this market. However, this last period of aggressiveness, or “risk tolerance,” by both the investors and the special finance companies has been impressive.

Mr. Phea: It is shaping and remolding the way we buy and sell cars.

Mr. Parker: Special finance has had a huge impact on the used car business in Texas and probably across the nation. In trying to get the national economy headed in the right direction, the Federal Reserve Bank (since 2008) has used all its powers. This includes a long period of easy money and low interest rates. Quantitative easing has added trillions of dollars to the financial system. This means that

February 2014

T e x a s

D e a l e r

many billions of dollars have found their way into riskier, speculative investments. Why? Because large investors, insurance companies, hedge funds etc. have not been satisfied with the traditional low yielding investments and have sought out higher yields. Greater and greater amounts of subprime auto loans have been securitized into higher yielding securities.

Proceeds are used to fund even more such loans. Unless you are a used car dealer, this is not a bad thing since it does stimulate the economy, at least in the short term.

Mr. Zak: The subprime effect has had varying impacts on dealers across the state. It really depends upon your business model and the car you are selling. For those dealers who are selling a $2,500 to $4,000 ACV there has probably been very little impact. As you go up in ACV closer to the $8,000 to $12,000

range, then those dealers have seen some effect. The higher the ACV model, the greater the effect.

What trends in special financing have you noticed over the last 6–12 months?

Mr. Brill: The trend over the last 6-12 months is obvious. Much of the surge in new car sales and new car dealer used vehicle sales has come from deep aggressive buying from their financing arms, particularly from Chrysler. They are buying our customers.

Mr. Ingram: Since we don’t do any special finance, it’s hard to say definitively if things are getting tighter or looser. We think it may be getting tighter—or it may be I just want them to get tighter, so that’s what I perceive.

9

Mr. Parker: As long as the rates

with are the riskiest customers, who ultimately drive your delinquencies and losses higher. The biggest opportunity is to be a participant instead of a victim by offering special finance at your dealership. The question now is, if you haven’t done so already, are you too late?

Mr. Phea: There is a lot of new

Opportunities: 1. Get in on it. This special finance is available to most dealers, new and used. It’s more trouble than in-house financing but worthwhile. If you can’t beat them, join them.

2. Get to know your customer better. People do business with people. The better you treat your customer, the greater the chance that they will return and refer your company to others.

Challenges: 1. Many buy here pay here customers are finding their way to other dealers who probably have better terms—lower down payments and lower monthly payments.

2. There are more voluntary repos as new car dealers advise prospective new car buyers to return their vehicle to the dealer from whom it was purchased in order to qualify for a new vehicle.

on alternative investments continue to stay low, more and more money will be used to provide funding for special finance. Interest rates charged on these loans (up to 26% in Texas) enables a good cushion (reserve) and protects investors from loss while still providing them a good yield. money flooding the market place right now.

Mr. Zak: I have seen finance companies really dip down into the mid to low 400 credit score range and these individuals have been able to purchase new vehicles with terms up to seven years. This has happened over the last year and a half. The trend has not been good. The finance companies are putting these customers in vehicles with unrealistic financing terms that do not fit their stability level. So in the end, you have a customer who is buying and attempting to pay for a vehicle that is more than they can afford based upon their income, which sets them up for failure from day one.

What opportunities or challenges do you see for dealers as a result of these trends?

Mr. Brill: The challenges I see are

a decreasing pool of BHPH customers and market; financing sources no longer paying off our balances on trades; customers “dropping off ” their vehicles to us after securing financing on newer vehicles for the same payment; and the remaining pool of current and future customers having “deep subprime” credit scores further stressing collections.

Mr. Ingram: The biggest challenge is attracting that special finance customer to your dealership before they visit a new car store.

Once that happens, all you’re left 10

Mr. Parker:

Mr. Phea: From an opportunity

standpoint, I see better profitability if you shop around.

Mr. Zak: Well there is good

news and bad news as they say. The bad news for BHPH dealers is that we have lost a lot of customers over the last year and a half. The good news is a double-edged sword.

Eventually the majority of these customers will return to the BHPH dealers because, in some cases, the customer was set up for failure from day one by the finance company.

As their vehicle is repossessed, they will return to the BHPH dealer for transportation. The flip side of the coin is that these particular finance

companies did not help these consumers. These consumers were hurt by that fact that, in most cases, they were sold more car than they could afford and on terms that were unrealistic given their financial position.

In the end, this hurts the consumer by having another repo added to their credit and another ding on their credit score.

What are your thoughts as to how vehicle financing conditions will evolve over the next 6–12 months?

Mr. Brill: Dealers need to do whatever is necessary to weather the storm until the charge-off rates begin to climb (as they are starting to do) and we see a correction, which historically always comes.

We know one thing about our customer that these lenders cannot overcome: They cannot budget for monthly payments. Traditional lenders aren’t as flexible at working with customers to get them over a financial crisis. That pretty much describes most of our BHPH customers. They are constantly living in recession.

Mr. Ingram: Again, I’m not sure if it’s my expectation or simply my hope that subprime weakens in 2014. It will eventually. It always has in the past.

Mr. Parker: I don’t see a lot of

change over the next 6-12 months.

However, eventually the pendulum will swing the other way again.

Money will tighten up, lenders will become more afraid of low income, credit-challenged borrowers and the special finance challenge will lessen. Ours is a very lucrative business and the same thing that makes it lucrative for us also makes it lucrative for the corporate lenders.

We have had this challenge before.

It will improve. (cont’d on pg. 12) T e x a s

D e a l e r

February 2014

The Impact of Special Finance (cont’d from pg. 10)

Mr. Phea: In my opinion, regarding the evolution of financing conditions, they will improve as the economy improves.

Mr. Zak: Over the next 12 months as the finance companies start to incur losses and increased delinquencies from these borrowers I think we will see a tightening in the subprime arena and some of these consumers who were getting financed will not be able to get financed because of the revised terms by the finance companies.

Associate Members:

David. E. Keller, CPA, CFE is

a principal of the dealerships group with CliftonLarsonAllen, a national CPA and financial services firm.

Somir Paul is the president of Woodlands Financial Services. The company has been an indirect lender to the independent automobile dealers in the Texas market since 1993 and hosts an annual financial conference in Houston, TX. David Fricke is the executive vice president of Texas Capital Bank Lender Finance Group. This group provides revolving lines of credit to both purchasers and originators of auto finance loans who own/manage auto loan portfolios typically ranging in size from $5,000,000 to $50,000,000.

Ariad Sommer is the CEO of Ituran USA. He has worked in the U.S. automotive and finance industry since 2004 when he was chief operating officer and managing partner of AFS Acceptance.

How would you characterize the impact of special finance on the independent dealers of Texas?

Mr. Keller: Special finance is

having an effect mostly on dealers 12

who have higher ACV’s than the normal BHPH dealer. The higher the ACV of the vehicle, the closer you get to special finance and those lenders seem to have large financial resources of cash to fund these deals.

Mr. Paul: The impact of special

finance on the BHPH dealers will be an intense competition for market share in a growing market. Market reports from several sources indicate that there is a major thrust by existing and new special finance companies in the used vehicle-subprime market. Our customers have more choices now than they did in the past few years and the BHPH industry will have to create more customer loyalty by being innovative and finding market niches that are not well served by special finance. We are in a business cycle of intense competition and based on our past experience, things never stay the same.

Mr. Fricke: BHPH dealers that hold and collect their own loans are less subject to the fluctuations in market demand and pricing than dealers that depend upon special finance. However, as the amount of money being invested in Special Finance increases, the BHPH dealer faces increased competition for inventory, sales and the credit terms to finance their sales. Dealers who rely solely on special finance enjoy expanding avenues to provide financing to customers across all credit spectrums when special finance is strong and have greater difficulty when special finance weakens.

What trends in special financing have you noticed over the last 6–12 months?

Mr. Keller: It has caused some early payoffs and voluntary returns of vehicles by customers who have bought a vehicle from a dealer

utilizing special finance. Special finance seems to be growing in strength so more new and used car dealers are participating in these sales, which decreases the number of customers who previously could only shop at a BHPH dealership to obtain a vehicle.

Mr. Paul: In conversations with our BHPH dealers we notice that special finance is usually able to offer a bigger credit line, lower finance charges and longer terms for a fair share of our typical customer base.

Mr. Fricke: With institutional

money pursuing higher yields, subprime auto loans have again been seen as an attractive investment and there has been a significant influx of capital into special finance over the past year. In turn, the demand and price for sub-prime auto finance contracts has increased and the availability of credit alternatives for sub-prime car buyers has increased as well. One adverse impact to BHPH dealers over the past year has been an increase in voluntary repossessions as customers are being offered unusually attractive offers to buy and finance a newer vehicle elsewhere.

Mr. Sommer: The first trend we’ve seen is the growing number of special financing players in the market. Private equity firms contribute to the increase of new market entries and are looking to capitalize on their investment by reaching out to more dealers for purchasing automobile papers. In addition, we have noticed traditional financing companies who started to lower their credit criteria and provide financing on the edge of special financing. Lastly, special financing companies have gotten an advantage that has caused BHPH dealers to be burdened with unique financing situations, such as bankruptcies and exceedingly low credit scores.

T e x a s

D e a l e r

February 2014

As a result, what pitfalls and/or hidden opportunities may present themselves for dealers?

Mr. Keller: BHPH dealers affected by this trend should reconsider the ACV of the vehicle they are selling and possibly decrease the ACV to a range that special finance lenders won’t lend for that type of vehicle. The pitfalls are decreased sales and higher repo charges if your model doesn’t change during this trend. Dealers with “at risk” customers who could go to special finance dealerships should contact the customer and maybe offer them incentives to stay, such as a decreased interest rate, a free payment or perhaps more goodwill if the vehicle breaks down to let the customer know they are appreciated and stop the customer from shopping elsewhere. This may increase your customer loyalty when you need it the most.

Mr. Paul: The hidden opportunity for BHPH dealers is to step up our entrepreneurial innovation and hard work ethic in our business. Good times may have created hubris in some sectors of our business, and this will be an opportunity to build a business with a lower cost structure to deal with the challenge of the current situation. This will help us survive the present and be more profitable in the future.

Mr. Fricke: History has shown us that the special finance capital will fluctuate and dealers who rely on special finance capital will suffer when it contracts. The BHPH dealer holding and collecting their own contracts has and will maintain control of their consumer credit decisions and can succeed regardless of the trends for special finance capital. However, the BHPH dealer must remain disciplined to their long-term business model and not become persuaded to make February 2014

T e x a s

D e a l e r

poor business decisions based on increased competition caused by surges in special finance.

Mr. Sommer: Generally speak-

ing, more special financing players in the market can decrease demand for BHPH deals but at the same token, can increase the stability and risk mitigation for those dealers. Let me explain. Historically, BHPH customers are individuals who couldn’t get financed with traditional financing sources. As more special financing options become available, those customers might find financing solutions with a franchise dealer, instead of a BHPH dealer. Therefore the risk associated with special finance is spread over to franchise dealers instead of resting exclusively on the BHPH dealers. Healthy BHPH operations understand they are not built to serve all types of customers and can access special financing companies in case they need to backup their operations. Having more players in the market means more options to find the best deal out there for their customers. Most of the time better rates allow them to sell more vehicles and provide better service to their customers. By doing that, repeated business tends to increase. BHPH dealers have the unique opportunity to control both the vehicle sales and financing transactions, which means that dealers can maximize their profit on every deal.

What are your thoughts as to how the conditions will evolve over the next 6-12 months?

Mr. Keller: Until the amount

of cash resources available to special finance lenders dries up or a few large special finance lenders get into financial trouble, special finance will continue to affect the BHPH dealer sales and profits. I see

this trend continuing for at least the next one to two years. Dealers need to be aware and reconsider the ACV of the vehicle they are selling if they are being affected too much by this trend. Dealers need to track the reason for repos and voluntary returns carefully and document if it is caused by special finance so they can review the actual effect on their business model.

Mr. Paul: In the current envi-

ronment of longer term finance contracts, the business cycle that we are in may stretch out over the next 2-3 years. The BHPH industry has been around for over fifty years and is very resilient. We believe that things will get better because the BHPH industry is very entrepreneurial and driven by a “Spirit of Survival.”

Mr. Fricke: It is likely that spe-

cial finance capital will still be very active in the market in the near term. However, as the competition increases for the special finance consumer and the capital begins to buy weaker credit quality consumer contracts, the delinquency and credit losses will increase, which has historically restored a contraction in special finance lending. It’s difficult to predict exactly when special finance activity will decrease or become more rationally priced/ structured, but some moderation over the next 12 months wouldn’t be surprising.

Mr. Sommer: Special financing companies today utilize advanced technologies and take a customerfriendly approach to service their customers in the utmost professional manner. I would expect this to continue in the foreseeable future.

As a result, I think those customers will feel comfortable approaching the dealer for repeated business.

13

Please Welcome Our Newest TIADA Members Harvest Autos William Frank 3006 W. 25th Amarillo, TX 79109

Dealer Members 1st Arkansas Car Brokers David Knighten 4015 FM 603 Clyde, TX 79510

Interstate Bus Sales, Inc Karl Smith 24818 IH 10 West PO Box 220 Wallisvillle, TX 77597

America’s Car-Mart Ahmad Mahadi 802 S.E. Plaza Avenue Suite 200 Bentonville, AR 72712

Joe Garza Used Cars Mona Lisa Garza 4414 San Pedro San Antonio, TX 78212

American Trucks & Classics, LLC Margaret Dorsett 27102 FM 2978 Magnolia, TX 77354

Lofi Motors Cesar Torres 4634 Ayers St Corpus Christi, TX 78415

Austin Auto Group Miles Frost 7500 Burnet Rd. Austin, TX 78757

Magnolia Auto Group Thomas Cone P.O. Box 701155 Houston, TX 77009

Best Used Cars Carla McGuire 3305 W Division Arlington, TX 76012

Mike McGee Motors Inc Mike Mcgee 3001 Franklin Ave Waco, TX 76710

Rosa’s Autos Inc Rosa Contreras 6725 Sherman St. Houston, TX 77011 Seleccion Auto Group Wayne Scott 8315 C F Hawn Frwy Dallas, TX 75217 Terra Texas W H Haley 3411 E US Hwy 290 #1 Fredericksburg, TX 78624 Associate members Auto ProTex GPS John Hatter 1313 S. Pine Lake Rd. Montgomery, TX 77316

Dealer Match Ellen Hoy 2 Concourse Pkwy, Suite 200 Atlanta, GA 30328 Metro Auto Auction Greg Humphries 1836 Midway Road Lewisville, TX 75056 National Hole-In-One Association Stephanie Courson 1840 N Greenville Ave Suite 178 Richardson, TX 75081 Proguard Warranty Inc Sharlene Neyman PO Box 1337 Pittston, PA 18640

AutoAction Ramzi Sabra 10810 Katy Freeway, Suite 103 Houston, TX 77043

Garage Liability is our specialty.

Kevin Smith Insurance Agency is one of the largest writers of Garage Liability in the state. We work with several a+ rated companies which offer exceptional rates to car dealers and repair shops. Call today for a “quick”

10-minute quote!

8240 Mid Cities Blvd / N. Richland Hills, TX 76180 (817) 581-1979 / Fax (817) 581-1921 WE ALSO OFFER THESE COVERAGES:

Commercial Fire • Contents • Wrecker • 2-Car Haulers • Cargo • Dealer Bonds Retirement • Life Insurance • Homeowner Insurance • Personal Lines February 2014

T e x a s

D e a l e r

15

TIADA DeAler AcADemy 2014

Keeping Your Dealership Legal and Compliant a seminar with Michael W. Dunagan, TIADA General Counsel Author of the standard-setting books, “Dealer Financing of Used Car sales” and “Texas Automobile repossession: A Lien Holder’s Legal Guide.”

This class is the 2014 version of attorney Michael W. Dunagan’s ongoing quarterly compliance seminar. Featuring updates on both federal and state compliance issues, this session focuses on advanced dealership financing issues. This is the practical side of compliance from the association that understands you have a business to run — and you want to run it right.

The seminar will focus on advanced financing concepts, with special emphasis on in-house financing, repossession & bankruptcy issues, OCCC compliance and federal regulations. u u u u u u u u u u

u u

New Customer ID requirements – what is acceptable?

New Privacy Notice requirements – do we need a new, custom form? risk-based Pricing – what does the rule require?

Credit Card Convenience Fees – what is allowable?

New Adverse Action rule – who is affected?

Consumer Financial Protection bureau (CFPb) – what can dealers expect? bankruptcy – when do we have to give the vehicle back? repossessions – When does the 60% rule apply? Is repo notice required?

Do we have to return custom wheels? Do we have to disclose a GPs unit?

OCCC Audits – what are the most common mistakes dealers make?

TxDMV enforcement – advertising violations, title management issues & more

PLUS: Texas Legislative session – an update on bills that will affect the industry Q & A – don’t leave until you get all your questions answered by the top industry expert in Texas, Michael W. Dunagan

Monday, February 10, 2014 Houston, Texas

seminar will be held from 9:00am - 3:30pm Crowne Plaza Hotel 12801 Northwest Frwy. | Houston, TX 77040 713.462.9977

sponsored by: Collateral Protection Insurance www.cpiai.com

Discount Pricing for Multiple Attendees!

MeMbers – First registrant $149, each additional $99 (Must be from same dealership)

NON-MeMbers – $299

www.autozoom.com

register online at w w w . t x i a d a . c o m or by phone at 800.442.5944.

Texas Independent Automobile Dealers Association

www.passtimeusa.com

BELLAGIO • LAS VEGAS, NV • APRIL 14 - 16, 2014

EARLY REGISTRATION ENDS JANUARY 31ST! CALL NOW 800.966.8733 or visit BHPHWORLD.COM

THE BEST BHPH EVENT ON THE PLANET Nation’s Top Experts • Collections Strageties • Payment Processing • Powerful Networking Compliance Specialists • BHPH Sales Training • Inventory Outlook

NEW BHPH BENCHMARKS • TOP VENDORS, PRODUCTS & SERVICES

2 014 tiada a u t o a u c t i o n

Local Chapters Victoria Donny Cowan • Rock Motors 361.573.3325 rockmotorsllc@tisd.net Meeting - 1st Monday (Monthly) Fort Worth Jerry Smith HJ Smith Automobiles 817.282.0102 hjsmithauto@yahoo.com Meeting - 4th Thursday (Monthly) Dallas County Kathrine Tolsch • CICO Auto Sales 214.352.9282 cicoauto@verizon.net Meetings every other month Houston Michael Zak • Dixon Motors 281.931.1300 houstoniada@gmail.com Meeting - 2nd Monday (Monthly) Waco-Heart of Texas Bill Miller • Bill Miller Used Cars Meeting - 2nd Monday (Monthly) For more information contact Eddie Massey, Massey Motors 254.753.6661 San Antonio Sonny Paredez • Discount Auto Center 210.680.5600 sonnyparedez@yahoo.com Meetings quarterly (dates announced at www.txiada.com) El Paso James Hobson • H -Town Motors 915.564.9797 htownmotors@aol.com Meeting - 3rd Friday (Monthly) Austin Brent Rhodes • Fiesta Motors 512.312.2201 brent@fiestamotors.net Meetings quarterly 18

ABILENE

CORPUS CHRISTI

Alliance Auto Auction of Abilene

Big Valley Auto Auction

CM Company Auctions

DALLAS / FT. WORTH METROPLEX

6657 US Hwy 80 West / 79605 325.698.4391 / 866.310.3555 www.allianceautoauction.com Ben Stock, Auction Manager Danielle Staples, Office Manager Friday: 10 AM

2258 S. Treadaway / 79602 325.677.3555 / 866.310.3555 www.cmauctions.com Gregory Chittum, Owner Thursday: 10 AM

AUSTIN America’s Auto Auction Austin / San Antonio

16611 S. IH-35 / Buda / 78610 512.268.6600 www.americasautoauction.com John Swofford, General Manager Tuesday: 1:30 PM

BEAUMONT Gulf Coast Auto Auction

4450 South 11th Street / 77701 409.840.6000 www.gulfcoastautoauction.com Roger Rashall, General Manager Rocky Rashall Blake Rashall Thursday: 7 PM

CARROLLTON Texas Lone Star Auto Auction 2205 Country Club Drive / 75006 214.483.3597 www.TLSAA.com Jeff Dunning, Jr., General Manager Tim Clement, Assistant GM Michelle Elrod, Office Manager Tuesday: 1 PM / Thursday: 2 PM

5661 Agnes St / 78405 361.356.2020 www.bigvalleyaa.com Bernard Watson, Owner Billy Kratz, GM Tuesday: 10 AM

ADESA Dallas

3501 N. Lancaster-Hutchins Rd / Hutchins / 75141 972.225.6000 Ken Osborn, GM Wednesday: 3 PM - New Car Trade Thursday: 9:30 AM - Consignment/ Fleet/Lease

America’s Auto Auction – Dallas 219 N. Loop 12 / Irving / 75061 972.445.1044 www.americasautoauction.com Robert Hammonds, GM Ruben Figueroa, Assistant GM. Tuesday: 2 PM / Thursday: 2 PM

EL PASO El Paso Independent Auto Auction

7930 Artcraft Road / 79932 915.587.6700 www.epiaa.com Lori Pidgeon, GM JD Glover, AGM Wednesday: 10 AM - Fleet/Lease & Dealer Consignment Wednesday: 1 PM as scheduled GSA Public Auction

HARLINGEN / McALLEN Big Valley Auto Auction

4315 N. Hutto Rd. / Donna / 78537 956.461.9000 www.bigvalleyaa.com Bernard Watson, GM Lisa Harms, alternate contact Thursdays: 10 AM

T e x a s

D e a l e r

February 2014

directory & resource guide HOUSTON

TYLER

America’s Auto Auction – North Houston

Greater Tyler Auto Auction

1440 FM 3083 / Conroe / 77301 936.441.2882 www.americasautoauction.com Buddy Cheney, GM Ben Nash, Sales Manager Mondays: 6:30 pm

WACO Heart of Texas Auto Auction

longview Alliance Auto Auction, LLC 6000 SE Loop 281 / 75602 903.212.2955 www.allianceautoauction.com Jeff Loftin, Auction Manager Brenda Hunt, Office Manager Friday: 10 AM

LUBBOCK Lone Star Auto Auction

2706 Slaton Hwy / 79404 806.745.6606 (local) / 888.299.6606 (toll-free) www.lsaalubbock.com Jim McNulty, Owner Dale Martin, General Manager Wednesday: 10 AM

(Waco’s oldest auto auction- Proudly serving dealers for 20 years!)

2508 HWY 6 / 76705 / 254.755.7713 www.heartoftexasautoauction.com Allan Wichkoski, Owner Kenny Reigert, General Manager Shirley McMillan, Office Manager Thursday: 7 PM

Alliance Auto Auction

15735 N. Interstate Hwy 35 / Elm Mott, TX / 76640 254.829.0123 / 254.829.1298 (fax) www.allianceautoauction.com Darren Darnell, GM darren.darnell@allianceautoauction.com Carmen Klaus, Office Manager Every Friday: 10 AM

oKLAHOMA CITY, OK Dealers Auto Auction of OKC

LUFKIN Lufkin Dealers Auto Auction 2109 N. John Redditt Drive / 75904 936.632.4299 Wayne Cook Thursday: 6 PM

ROCKWALL Lakeside Auto Auction 1810 East I-30 / 75087 972.771.9919 www.lakesideaa.com Pete Conley, Owner Tuesday: 7 PM

February 2014

11654 State Highway 64 W / 75704 903.597.2800 Tuesday: 5 PM - Repo Lane Tuesday: 6 PM - Consignment

T e x a s

1028 S. Portland / Oklahoma City, OK / 73108 405.947.2886 /405.943.8370 (fax) www.daaokc.com Gary Smith, Owner/President/GM John Reininger, Asst. GM Mike Egdahl, F/L Manager Thursdays: 8:30 AM - Consignment Sale INOP Sale held weekly GSA sale held monthly (open to public) Call for info on sale dates and times Every other Tuesday: 10 AM - GM Sponsored Factory Sale

The TIADA Website:

www.txiada.com Members can log in with their username/password and access our Dealer Member Directory, Legislative Action Center, Legal Consultation Service and much more. Register for all upcoming TIADA events online at the Calendar of Events; access our online membership application; find contact information for all our Local Chapters, and find many additional resources at our Links page.

Texas Department of Motor Vehicles 888.368.4689 www.txdmv.gov Office of Consumer Credit Commissioner 800.538.1579 www.occc.state.tx.us Texas Comptroller 800.252.1382 www.window.state.tx.us NIADA 800.682.3837 www.niada.com

Repossessions

American Recovery Association 972.755.4755 www.repo.org or contact TIADA state office

Forms

Burrell Printing 800.252.9154 www.burrellprinting.com

D e a l e r

19

regulation matters Recordkeeping Requirements

by Danny

Langfield

S

ome of the most frequent questions we get at the TIADA office relate to the topics of records retention. Some dealers are looking to see just how long a particular document needs to be kept, and others, looking to clean out old files, are wondering what is okay to shred.

As dealers are well aware, there are many different agencies that oversee your business, and they each have records retention requirements.

The following TxDMV, OCCC and Comptroller information originally appeared in the December 2010 Special Compliance issue of this magazine.

In the pages that follow, the reader will also find a

20

TIADA deputy director

Some dealers are looking to see just how long a particular document needs to be kept, and others, looking to clean out old files, are wondering what is okay to shred.

As dealers are well aware, there are many different agencies that oversee your business, and they each have records retention requirements.

Office of Consumer Credit Commissioner (OCCC):

document retention guideline provided by TIADA member CliftonLarsonAllen, a CPA and financial services firm that works with independent dealers nationwide.

[NOTE: the information below and in the following pages is intended as a general guide. Dealers are encouraged to visit with your CPA and/or attorney, particularly with regard to records retention for tax purposes.]

from contract date, 3 years from last payment received, or two years from the final entry made, whichever is later.

Rules can be found in the Texas Administrative Code, Title 7, Part 5, Chapter 84, Subchapter G, Sec 84.707-709. A link to this section of the Admin Code is available on the “Links� page of the TIADA website.

Summary: Four years

T e x a s

D e a l e r

February 2014

Retention and availability of records

All books and records required by this subsection must be available for inspection at any time by Office of Consumer Credit Commissioner staff, and must be retained for a period of three years from the date of the last payment made on the retail installment sales transaction, four years from the date of the contract, two years from the date of the final entry made there-

Upon notification of an examination… the licensee must be able to produce or access required books and records within a reasonable time...

Agency contact for dealer questions: Rudy Aguilar Email: rudy.aguilar@occc.state.tx.us

TxDMV Enforcement Division: Summary: 48 months.

Rules can be found in the Texas Administrative Code, Title 43, Part 10, Chapter 215, Subchapter E, Rule 215.144. A link to this section of the Admin Code is available on the “Links” page of the TIADA website.

Purchase and sales records

A dealer must keep a complete record of all vehicle purchases and sales for a minimum period of 48 months and make those records available for inspection and copying by a representative of the department during business hours.

Records reflecting purchases and sales for at least the preceding 13 months must be maintained at the dealer’s location. Records for prior time periods may be kept off-site at a location within the same county.

Agency contact for dealer questions: Bill Harbeson

Email: bill.harbeson@txdmv.gov

Texas Comptroller of Public Accounts:

on, whichever is later, or a different period of time if required by federal law. Upon notification of an examination pursuant to Texas Finance Code, §348.514(f), the licensee must be able to produce or access required books and records within a reasonable time at the licensed location or registered office specified on the license. The records required by this subsection must be available or accessible at an office in the state designated by the licensee except when the retail installment sales transactions are transferred under an agreement which gives the commissioner access to the documents. Documents may be maintained out of state if the licensee has in writing acknowledged responsibility for either making the records available within the state for examination or by acknowledging responsibility for additional examination costs associated with examinations conducted out of state.

February 2014

T e x a s

D e a l e r

Summary: Four years from last payment received, or four years from date of sale.

Rules can be found in the Tax Code, Chapter 152, Sec. 152.063 and 152.0635. A link to this section of the Tax Code is available on the “Links” page of the TIADA website.

Agency contact for dealer questions: Curt Swenson Email: curt.swenson@cpa.state.tx.us

See next pages for the CliftonLarsonAllen

‘Guide To Record Retention For Auto Dealers’ 21

feature

Guide To Record Retention For Auto Dealers

Y

providedcourtesy of CliftonLarsonAllen

ou can rely on a reasonable record retention policy such as this one if you have thrown away records which are later requested of you. However, in order to use the policy as a defense, you should exercise the policy and discard documents on a regular (at least yearly) basis.

ACCOUNTING Audit Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Permanently Accounts Receivable or Payable Ledger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 years Bank Statements and Reconciliations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 years Canceled Checks--Payroll and General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 years Canceled Checks--for purchase of assets should be filed with asset records . . . . . . 5 years after disposition of asset Capital Stock Book . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Permanently Cash Disbursement Journal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 years Cash Received Journal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 years Expense Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 years Expense Ledger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 years Financial Statements (retain permanently of no audit reports) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 years General Ledger and Journal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Permanently Interdepartmental Sales Journal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 years Inventory Records-Annual Only . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 years New Car Sales Journal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 years Notes Receivable Ledger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 years Parts, Accessories, and Service Sales Journals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 years Payroll Earnings Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 years Payroll Journal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 years Payroll Time Cards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 years Petty Cash Vouchers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 years Petty Cash Summary Envelope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 years Prepaid and Accrued Expenses Journal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 years Subsidiary Ledger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 years Trial Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 years Vouchers-Vendors, Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 years

CORPORATE Articles, By-Laws, Minutes, other corporate records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Permanently

CORRESPONDENCE General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 years Legal and Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Permanently 22

T e x a s

D e a l e r

February 2014

OPERATIONS Accident Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 years Bills of Lading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 years Buyer’s Guide-Used Car Label* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . No requirement* Car Invoices* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 years Car Purchase Orders* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 years Credit Applications-denied* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 years Credit Applications-approved* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . No requirement Customer Files* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 years Employment Applications, terminated and not hired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 years Employment Applications, hired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 years past termination Insurance Policies, expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 years Internal Repair Orders* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 years Odometer Statements* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 years OSHA Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 years Personnel Files, Closed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 years after termination Purchase Orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 years Repair Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 months Repair Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 years Retail Installment Contract, assigned* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 years Retail Installment Contract, not assigned* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 years past expiration Sales Invoices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 years Service contracts/Extended Warranties* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 years past expiration Shipping and Receiving Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 years Underground Storage Tanks--testing results and DNR correspondence . . . . . . . . . . . . . . . . . . . . . . . . . . Permanently Uniform Hazardous Waste Manifests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 years

TAXES Form 8300-$10,000 Cash Reporting Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 years Income Tax Returns, U.S. and State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Permanently Income Tax Returns, related work papers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 years IRS Audit Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Permanently Unemployment Tax Returns, U.S. and State and related work papers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 years Withholding Tax Returns, U.S. and State and related work papers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 years Withholding Tax Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 years * These items would ordinarily be in the car deal jacket.

Each item has its own retention requirement. However, unless you want to strip the file, keep the car deal for 10 years. Even then, contracts which are performed over time, for example, retail installment contracts (if you are carrying the financing, not those that are assigned) and service contracts, should be kept for 10 years past their expiration.

February 2014

T e x a s

D e a l e r

The Used Car Buyers’ Guide is not technically required to be kept. However, if you don’t keep a signed copy, it will be difficult to prove that your customer received one.

CliftonLarsonAllen 600 Washington Avenue, Suite 1800 / St. Louis, MO 63101-1312 / 314-925-4300 / www.cliftonlarsonallen.com

23

Ignorance is no defense.

Know the law.

Repo and financing issues are among the most common violations found by the OCCC. If you own a previous edition of these books from 2008 or earlier, it is recommended that you upgrade to the 2013 editions.

Dealer Financing of Used Car Sales This comprehensive book covers all aspects of the complicated world of seller-financing in Texas, including Maximum Finance Rates; Retail Installment Contracts; Contract Amendments; VIT; Repair Charges; Federal Disclosures and more.

TIADA Member Price: $125 (non-members $175)

Texas Automobile Repossession: A Lien Holder’s Legal Guide Everything you need to know about repossessions is addressed in this book, including Notification Requirements, Post-Repo Procedures, Private Sale vs. Strict Foreclosure, Bankruptcy, Post-Disposition Accounting, Tracking and Shut-off Devices, the 60% Rule and more. PLUS – includes all required forms.

TIADA Member Price: $125 (non-members $175) Now available for purchase online at www.txiada.com under “Legal Resources” or call 800.442.5944 to order by phone.

When ordering online, login with your TIADA username and password to receive the discounted rate. All prices include shipping. Orders are shipped in 3-5 business days.

Attorney Michael W. Dunagan is the author of the two must-have books for every Buy-Here, Pay-Here dealer in Texas. Mr. Dunagan has been General Counsel to TIADA for over 35 years.

His law firm specializes in the representation of independent Texas car dealers.

24

T e x a s

D e a l e r

February 2014

feature Tips for Managing Mobile Devices in the Workplace

by ADP Small Business HR Services

A

growing number of employers provide their employees with smartphones, tablets, and other mobile devices to help them stay connected to coworkers, clients, and work projects. Some employers are even allowing employees to bring their own mobile devices to work for use on the job (also known as bring your own device or “BYOD” policies). While these policies can make employees more productive, they can also raise issues regarding pay, information security, and safety.

Below are some common potential concerns related to mobile devices in the workplace as well as guidelines for helping to manage them.

employees must be paid for all hours worked, regardless of whether such time was approved in advance.

Violations of the company policy on after-hours work should be addressed as a disciplinary matter without affecting the employee’s regular or overtime pay.

Provide general guidelines. It is a good idea to give employees guidance on how they should handle situations in which they receive a call or email from a client, coworker, or supervisor during off hours (e.g., only read or respond in emergency situations).

Pay

The Fair Labor Standards Act (FLSA) requires employers to pay non-exempt employees (commonly referred to as “hourly employees”) for all time worked. Because mobile devices can be used anywhere and at any time, tracking hours worked can be a challenge. Additionally, if non-exempt employees use mobile devices for work while off the clock, it may lead to violations of the FLSA’s pay requirements.

Tips:

Identify business need. Before providing smartphones to non-exempt employees, analyze whether there is a strong business reason for doing so. Whenever possible, employers should consider limiting the use of smartphones and other mobile devices to exempt employees only. This can help to minimize pay issues related to after-hours work, since bona fide exempt employees are generally paid a set salary regardless of the amount of hours worked.

Require employees to log work time spent on mobile devices. If non-exempt employees are permitted to use mobile devices for work, it is important to require them to record and report all time spent working using the device. For instance, they must be aware that checking work email or performing other work tasks is considered “hours worked”. If the regular timekeeping system cannot be used to record after-hours work, employees should be instructed on how to promptly report such hours.

Require approval. Consider requiring non-exempt employees to obtain written permission from their supervisor before using their mobile device for work during off hours. This can help to limit the occurrence of after-hours work. Note: Non-exempt

February 2014

T e x a s

D e a l e r

Require review of time records each pay period. It is a best practice to require non-exempt employees to review and approve their timecards at the end of each pay period and notify their supervisor if there are any mistakes. This provides the employee with an additional opportunity to report after-hours work and can help to ensure that all time spent working is accounted for.

Safety

The use of mobile devices while driving can lead to safety concerns. Many states and local jurisdictions prohibit individuals from operating a motor vehicle while using a handheld mobile device. The Occupational Safety and Health Administration (OSHA) may impose fines for cell phone-related driving accidents during work time. In addition, the use of mobile devices while operating other heavy equipment, such as forklifts or power presses, can lead to workplace injuries.

27

Tips:

Prohibit use while driving. A best practice is to prohibit employees from using mobile devices while driving a vehicle or operating heavy equipment, even if your state or local jurisdiction doesn’t bar such use.

Provide general guidelines. Provide guidance to employees on how they should handle calls and other work-related tasks while on the road (e.g. using a hands-free device or pulling into a rest area).

Consider technology to prohibit use while driving.

Consider software options that prevent the use of mobile devices while a vehicle is moving.

Require employees to report violations. Require employees to report any traffic violations related to the use of mobile devices and consider making such safety infractions subject to disciplinary action.

Information Security

If employees are allowed to bring their own devices into work and connect to your network, consider information security and steps for minimizing risks, such as computer viruses or a breach of sensitive company data. If you provide devices to employees, also consider the risks if they connect those devices to a home computer, which may not have the security protections of your company’s network.

FOUND IT.

Tips:

Provide training. All employees should receive training on the importance of keeping company information secure, handling sensitive data, avoiding malicious virus and software downloads, and reporting suspected security breaches. The level of training should correspond with the employee’s job responsibilities and access to sensitive data.

Require passwords. Each employee should be required to have unique log-in credentials (username and password) to access company systems and mobile devices that are used for work. Passwords should be at least 10 characters long and have a mix of numbers and letters (uppercase and lowercase) and special characters. In addition, employees should be required to change their passwords regularly (e.g., every 30 to 90 days).

Have security controls for remote access. If employees work remotely, make sure their computers are protected by a firewall and that their access to your internal network is secure. One way to secure remote access is by using a Virtual Private Network, or VPN. Through a VPN, users are able to access resources on remote networks, such as files, printers, databases, or internal websites.

Use anti-virus software. Install, use and regularly update antivirus and antispyware software on every mobile device and computer.

BYOD considerations. If you have a BYOD policy, an important consideration is how sensitive business data will be protected when the employee leaves your company or the device is lost or stolen. Because the device is owned by the employee, your ability to erase the company data may be limited by federal and state laws unless you first obtain the employee’s written authorization. Before implementing a BYOD program, it is a good idea to work with legal counsel to review applicable laws and develop a written policy and authorization form in accordance with these laws.

Conclusion

Improve Customer Payment Performance and Reduce Repossession Risks.

If It Runs on PassTime, It Doesn’t Run Away.

CALL 1-800-828-1564 passtimeusa.com

28

If employees are permitted to use mobile devices for work purposes, think about developing a written policy covering company rules and expectations. To help ensure employees are aware of your stance on these issues, require all employees to sign an acknowledgment that they have read and understand the policy. The policy (like all other policies) should be enforced on a consistent basis.

This content provides practical information concerning the subject matter and is provided with the understanding that ADP is not rendering legal advice or other professional services.

T e x a s

D e a l e r

February 2014

With Protective Asset Protection, you protect your best asset – your reputation.

In today’s transparent world, consumers are only a few clicks away from uncovering the good, the bad and the ugly about any company.

With Protective Asset Protection, you and your customers can rest assured that the products we offer are administered and backed by us, which means reliable service that protects your reputation.

What’s more, our company believes in doing the right thing by you and by your customers.

We are in business to serve people, build trust, and simplify everything. So when your customers choose our products, they are protecting their own assets – as well as yours.

Learn more at protectiveassetprotection.com

Protect Tomorrow. Embrace Today.™ Vehicle Protection Plans I GAP Coverage I Credit Insurance I Limited Warranty Products Dealer Participation Programs I F&I Training I Advanced F&I Technology

Contact Protective’s Texas representative, Joe Nuszkowski at 866 927 2910 Limited Warranty Products, Vehicle Protection Plans (VPPs) and GAP are backed by Lyndon Property Insurance Company in all states except NY. In NY, VPPs are backed by Old Republic Insurance Company, Limited Warranty Products are backed by Western General Insurance Company and GAP is not available. Credit Insurance is backed by Protective Life Insurance Company in all states except NY, where it is backed

by Protective Life and Annuity Insurance Company.

– Save the date! –

july 27–30, 2014

tiada Annual e c n e r e f Con & expo

s e n i P t s o L

@

austin music

with

+

austin food

+

austin flavor

tiada education

Hyatt Regency lost Pines Resort & Spa | 575 Hyatt lost Pines Road | lost Pines, Texas 78612

feature

BHPH 2013 is In the Rearview Mirror; What’s Ahead?

by Kenneth Shilson, CPA

President/Founder of National Alliance of Buy Here, Pay Here Dealers (NABD)

A

lthough the year-end financial results for Buy Here Pay Here (BHPH) operators are still being compiled and individual results will vary, the NABD members I surveyed about 2013 performance indicated the following:

1

Unit sales for most operators were flat or declined (some by up to 25%) from 2012; due primarily to increased market competition from special finance sources that extended credit to BHPH customers.

Individual operators were affected by varying levels of special finance competition in their local markets. Some operators expanded their facilities (added lots) to increase their market share. Market data indicated that the BHPH deep subprime financing market share declined by more than 20% in 2013, while the market share for subprime finance companies grew by a corresponding percentage.

2

Subprime finance lenders (including franchise operators) were particularly aggressive in financing deep subprime customers (with credit scores below 550) who purchased new and late model vehicles (less than 3 years old). Finance companies originated these “silly loans” with 5+ year terms and large monthly payments in an attempt to capture market share quickly.

February 2014

T e x a s

D e a l e r

Capital poured into the subprime auto markets making lenders overly aggressive in their underwriting policies and practices as evidenced by the aforementioned loans.

third quarter of 2013 increased by approximately 125% over the corresponding period of 2012 for these finance company lenders. More charge-offs can be expected in future periods from these overly aggressive lending practices.

4

5

3

History indicates that higher default rates occur on auto deals with “too much vehicle and too little customer”. Recent Experian® credit data shows that quarterly repossession rates for the

BHPH operators again found inventory acquisition challenging. Lower new car sales from 2008-2012 has limited the supply of BHPH vehicles (usually more than 4 years old), and kept auction 31

prices high. Manheim® data shows that a $5,000 vehicle purchased in 2009 averaged about 85,000 miles compared with approximately 120,000 miles for the same cost vehicle in 2013!

6

Technology played an important role in BHPH success.

Most customers today now have smart phones. This cellular link has become an important way for BHPH operators to “connect and collect” with their customers and prospects. In addition, internet based marketing tools, payment device technology, and electronic pay portals were integrated into BHPH operations last year.

7

New regulatory challenges surfaced in 2013 when the FTC, CFPB, and various state attorney generals’ offices began to monitor compliance and investigate alleged deceptive practices. Even the Department of Justice joined in! Regulatory compliance today has added importance and more scrutiny is expected during the next several years.

32

8

Operators with financial flexibility from equity and available lines of credit fared best.

Competition, economic uncertainty concerns from customers, and an increasing cost environment were the reasons why. (cont’d on pg. 38)

T e x a s

D e a l e r

February 2014

fines& violations 13-1257 ENF Commercializadora Del Valle, LLC DBA Commercializadora Del Valle, LLC Misuse of buyer temporary E-tag: Transp Code 503.063, 503.0631 and 503.038(a)(14), 43 TAC 215.151, 215.152, 215.153 and 215.155, Transp Code 503.038(a)(12) and 43 TAC 215.141(a)(10)(11) and Occ Code 2301.651(a)(8). Failure to timely transfer title and pay sales tax: Transp Code 501.0234. $500.00 and attend a Dealer Training Seminar.

13-1259 ENF Mark A. Peterson/Richard C. Almond DBA Southwest Superbikes Misuse of buyer temporary E-tag: Transp Code 503.063, 503.0631 and 503.038(a)(14), 43 TAC 215.151,

Final orders for December, 2013. Agreed orders represent a settlement of the case between the department and the licensee. In most cases there has been a finding that a law has been violated by the licensee.

215.152, 215.153 and 215.155, Transp Code 503.038(a)(12) and 43 TAC 215.141(a)(10)(11) and Occ Code 2301.651(a)(8). Sold a motor vehicle without certificate of title or title receipt: Transp Code 501.152. $500.00.

13-1261 ENF Hussein S. Daaboul DBA Cedar Auto Sales Misuse of buyer temporary E-tag: Transp Code 503.063, 503.0631 and 503.038(a)(14), 43 TAC 215.151, 215.152, 215.153 and 215.155, Transp Code 503.038(a)(12) and 43 TAC 215.141(a)(10)(11) and Occ Code 2301.651(a)(8). Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). $500.00.

13-1274 ENF Yoder Ford, Inc. DBA Hacienda Ford Misuse of buyer temporary E-tag: Transp Code 503.063, 503.0631 and 503.038(a)(14), 43 TAC 215.151, 215.152, 215.153 and 215.155, Transp Code 503.038(a)(12) and 43 TAC 215.141(a)(10)(11) and Occ Code 2301.651(a)(8). Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). $500.00 and attend a Dealer Training Seminar.

13-1275 ENF Juan Ramon Martinez DBA Dos Laredos Auto Sales Misuse of buyer temporary E-tag: Transp Code 503.063, 503.0631

SPECIALIZING IN THE INSURANCE NEEDS OF THE TEXAS USED CAR DEALER FOR OVER 25 YEARS

• Garage Liability • Dealers Open Lot • Wreckers & Haulers

• Dealer Bonds • Garagekeepers • Workers Compensation

(800) 727-7124 Contact Mike Pool or John Mahaffey for a competitive quote. m.pool@teiinsurance.com • j.mahaffey@teiinsurance.com P.O . Box 850746 • Mesquite, TX 75185 • (972) 288-3266 • Fax (972) 288-2608 www.teiinsurance.com

February 2014

T e x a s

D e a l e r

33

fines& violations and 503.038(a)(14), 43 TAC 215.151, 215.152, 215.153 and 215.155, Transp Code 503.038(a)(12) and 43 TAC 215.141(a)(10)(11) and Occ Code 2301.651(a)(8). Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a).

Filed a false title and tax document: Transp Code 503.038(a)(2) (2 counts). $2,000.00 and attend a Dealer Training Seminar.

13-1302 ENF Love Chrysler Dodge Jeep LLC DBA Love PreOwned Auto Center Misuse of buyer temporary E-tag: Transp Code 503.063, 503.0631 and 503.038(a)(14), 43 TAC 215.151, 215.152, 215.153 and 215.155, Transp Code 503.038(a)(12) and 43 TAC 215.141(a)(10)(11) and Occ Code 2301.651(a)(8). Failure to timely transfer title and pay sales tax: Transp Code 501.0234. $500.00 and attend a Dealer Training Seminar.

34

14-0003 ENF Port City Imports, Inc. DBA AutoNation Honda South Corpus Christi, Champion Honda, Champion Honda Corpus Christi Sold or offered to sell motor vehicles without the appropriate license for that type of motor vehicle: Transp Code 503.038(a)(14). $500.00.

14-0013 ENF Charlie W. Baze DBA C & K Auto Sales Misuse of a temporary tag on a vehicle without a valid certificate of inspection: 37 TAC 3.76(b), Occ Code 2301.651(a)(4), Transp Code 503.038(a)(12) and 43 TAC 215.141(a)(10)(11). Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). $500.00 and attend a Dealer Training Seminar.

14-0023 ENF Don Chehab DBA MLR Auto Sales

Misuse of buyer temporary E-tag: Transp Code 503.063, 503.0631 and 503.038(a)(14), 43 TAC 215.151, 215.152, 215.153 and 215.155, Transp Code 503.038(a)(12) and 43 TAC 215.141(a)(10)(11) and Occ Code 2301.651(a)(8). Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). Failure to timely transfer title and pay sales tax: Transp Code 501.0234. $750.00 and attend a Dealer Training Seminar.

14-0027 ENF Ilham Elsaleh and Mohamad Mooti DBA Bryan Auto Body and Auto Sales Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). $500.00.

14-0043 ENF Johnson Grayson Automotive, Inc. DBA Holiday Chevrolet Featured a price for a new motor vehicle which includes a trade-in amount

T e x a s

D e a l e r

February 2014

range deducted: 43 TAC 215.250(a)(e). $2,000.00.

14-0044 ENF Johnson Whitesboro Ford, Inc. DBA Holiday Ford Featured a price for a new motor vehicle which includes a trade-in amount range deducted: 43 TAC 215.250(a)(e). $2,000.00.

14-0070 ENF Victoria Mac Haik Ford LTD DBA Mac Haik Ford Lincoln Advertised a savings on a used motor vehicle: 43 TAC 215.262(e). $2,000.00.

14-0083 ENF Cano Motors LLC Filed a false title and tax document: Transp Code 503.038(a)(2). $1,000.00.

14-0046 ENF Mickel Fernandes DBA Universal Motors Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). Delivered title directly to retail buyer: Transp Code 501.0234, 503.038(a)(14), Tax Code 152.0411 and 43 TAC 215.141(a)(23). $500.00 and attend a Dealer Training Seminar.

13-0570 ENF Divera LLC DBA Guarantee Motors Failure to display buyer’s guide: 16 C.F.R. 455.2, Occ Code 2301.651(a)(4).

Failure to remove Texas plates: Transp Code 502.451, 43 TAC 17.14. Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). $250.00.

14-0050 ENF Spirit Motors, Inc. Failure to have business hours posted at the dealer’s location: Transp Code 503.032 and 503.038(a)(14); 43 TAC 215.140(1)(B). Misuse of buyer temporary E-tag: Transp Code 503.063, 503.0631 and 503.038(a)(14), 43 TAC 215.151, 215.152, 215.153 and 215.155, Transp Code 503.038(a)(12) and 43 TAC 215.141(a)(10)(11) and Occ Code 2301.651(a)(8). Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a).

Failure to timely transfer title and pay sales tax: Transp Code 501.0234. $750.00 and attend a Dealer Training Seminar.

13-1160 ENF Lake Conroe Motors Inc. DBA Lake Conroe Motors Inc. Failure to display buyer’s guide: 16 C.F.R. 455.2, Occ Code 2301.651(a)(4). Failure to remove Texas plates: Transp Code 502.451, 43 TAC 17.14. Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). $250.00.

14-0068 ENF Howard International Enterprises, LLC Failure to meet premises requirement(s): Transp Code 503.032 and 503.038(a)(14); 43 TAC 215.140(1) (B). Failure to have business hours posted at the dealer’s location: Transp Code 503.032 and 503.038(a)(14); 43 TAC 215.140(1)(B). Failure to answer the telephone, have it answered by a bona fide employee or to have an answering machine or service in operation during posted business hours: Transp Code 503.032, 503.038(a)(14) and 43 TAC 215.140(1)(B). $500.00 and attend a Dealer Training Seminar.

February 2014

T e x a s

D e a l e r

13-1204 ENF Tricolor Auto Group, LLC DBA Tricolor Auto Failure to display buyer’s guide: 16 C.F.R. 455.2, Occ Code 2301.651(a)(4). $100.00.

13-1229 ENF Excel Ford Lincoln Mercury LP DBA Excel Ford Lincoln Mercury Failure to display buyer’s guide: 16 C.F.R. 455.2, Occ Code 2301.651(a)(4).

Failure to remove Texas plates: Transp Code 502.451, 43 TAC 17.14. Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). $250.00.

13-1230 ENF Patterson Motors of Marshall Inc. DBA Patterson Chrysler Dodge Jeep Failure to display buyer’s guide: 16 C.F.R. 455.2, Occ Code 2301.651(a)(4).

Failure to remove Texas plates: Transp Code 502.451, 43 TAC 17.14. $150.00.

13-1279 ENF Eleazar Longoria DBA Longoria Motor Company Failure to display buyer’s guide: 16 C.F.R. 455.2, Occ Code 2301.651(a)(4). $100.00.

13-1280 ENF Javier Lujan DBA Valley Auto No metal dealer plate record: 43 TAC 215.139(i) or (j). $100.00.

13-1281 ENF Trucks of South Texas STS LLC Failure to display buyer’s guide: 16 C.F.R. 455.2, Occ Code 2301.651(a)(4). Failure to remove Texas plates: Transp Code 502.451, 43 TAC 17.14. $150.00.

13-1282 ENF Home Depot USA Inc. DBA The Home Depot Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). Failure to display license: 43 TAC 215.140(14). Failure to comply with foreign dealer rule: 43 TAC 215.147. $300.00.

13-1283 ENF Home Depot USA Inc. DBA Home Depot USA Inc. Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). Failure to display license: 43 TAC 215.140(14). $200.00.

13-1285 ENF Tyler Car & Truck Center LLC DBA Tyler Car & Truck Center LLC Failure to display buyer’s guide: 16 C.F.R. 455.2, Occ Code 2301.651(a)(4).

Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). $200.00.

13-1286 ENF Crown Motor Company DBA Crown Motor Company Failure to display buyer’s guide: 16 C.F.R. 455.2, Occ Code 2301.651(a)(4). $100.00.

35

fines& violations 13-1287 ENF Russell Brothers LLC DBA Russell Brothers LLC Failure to display buyer’s guide: 16 C.F.R. 455.2, Occ Code 2301.651(a)(4). $100.00.

13-1289 ENF Jairo Lara DBA Connection Auto Sales Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). Failure to observe right of way: 43 TAC 215.140(11)(c). $200.00.

13-1291 ENF Auto Ranch LLC DBA Auto Ranch LLC Failure to have written consignment agreement: 43 TAC 215.144(g). $100.00.

13-1293 ENF Adriana Caballero DBA Pioneer Auto Sales Failure to observe right of way: 43 TAC 215.140(11)(c). $100.00.

36

13-1294 ENF Nami’s Enterprises DBA A Plus Auto Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). $100.00.

13-1295 ENF Reymundo Gonzalez DBA Gonzalez Auto Sales Failure to display buyer’s guide: 16 C.F.R. 455.2, Occ Code 2301.651(a)(4).

Failure to remove Texas plates: Transp Code 502.451, 43 TAC 17.14. $150.00.

13-1296 ENF Damron Wheels n Waves Inc. DBA Damron Wheels –n- Waves Misuse of temporary dealer tag(s): Transp Code 503.038(a)(12):43 TAC 215.141(a)(10). $100.00.

13-1298 ENF Dominion Carz LLC DBA Dominion Carz LLZ

Failure to display buyer’s guide: 16 C.F.R. 455.2, Occ Code 2301.651(a)(4).

Failure to remove Texas plates: Transp Code 502.451, 43 TAC 17.14. Failure to remove out of state license plates from a vehicle purchased by dealer: Transp Code 503.070 and 43 TAC 215.141(a)(9). $200.00.

13-1299 ENF Baldemar Barrera DBA Baldes Auto Sales Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). Failure to meet premises requirement(s): Transp Code 503.032 and 503.038(a)(14); 43 TAC 215.140(1) (B). No metal dealer plate record: 43 TAC 215.139(i) or (j). $300.00.

13-1306 ENF Heriberto Perez DBA United Motors Failure to display buyer’s guide: 16 C.F.R. 455.2, Occ Code 2301.651(a)(4).

T e x a s

D e a l e r

February 2014

Failure to remove Texas plates: Transp Code 502.451, 43 TAC 17.14. Failure to meet premises requirement(s): Transp Code 503.032 and 503.038(a)(14); 43 TAC 215.140(1)(B). $250.00.

13-1313 ENF Lonny King DBA King Motor Co. Failure to display buyer’s guide: 16 C.F.R. 455.2, Occ Code 2301.651(a)(4). $100.00.

14-0001 ENF Car One, LLC Failure to display buyer’s guide: 16 C.F.R. 455.2, Occ Code 2301.651(a)(4). Failure to remove Texas plates: Transp Code 502.451, 43 TAC 17.14. $150.00.

14-0008 ENF Martha S. Baker DBA Andy’s Auto Sales Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). $100.00.

14-0010 ENF Maria D. Rivera DBA El Rey Auto Sales Failure to display buyer’s guide: 16 C.F.R. 455.2, Occ Code 2301.651(a)(4). Failure to remove Texas plates: Transp Code 502.451, 43 TAC 17.14. Failure to meet premises requirement(s): Transp Code 503.032 and 503.038(a)(14); 43 TAC 215.140(1)(B). $150.00.

14-0042 ENF Francisco Javi Martin Deanda, Rolando Mata DBA North Tenth Auto Sales Failure to meet premises requirement(s): Transp Code 503.032 and 503.038(a) (14); 43 TAC 215.140(1)(B). $100.00.

14-0053 ENF SPI Mechanix Co. LLC DBA SPI Mechanix Co. LLC Failure to meet premises requirement(s): Transp Code 503.032 and 503.038(a)(14); 43 TAC 215.140(1) (B). $100.00.

Welcome Home.

14-0054 ENF Michael Gerald Powell DBA Love That Ride Auto Sale Failure to remove Texas plates: Transp Code 502.451, 43 TAC 17.14. $50.00.

14-0059 ENF Robert E. Fogle DBA Gene Fogle Motors Failure to display buyer’s guide: 16 C.F.R. 455.2, Occ Code 2301.651(a)(4).

Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). $200.00.

14-0066 ENF WEHBI Inc. DBA Royal Car Center Failure to remove Texas plates: Transp Code 502.451, 43 TAC 17.14. $50.00.

Welcome to EPI. We’re independent, connected and committed to serving you, the dealers of the TIADA. Join us for the region’s finest dealer and fleet/lease consignment every Wednesday at 10 AM.

7930 Artcraft Road | El Paso, TX, 79932 | 915.587.6700 | www.epiaa.com February 2014

T e x a s

D e a l e r

37

BHPH 2013 is In the Rearview Mirror; What’s Ahead? (cont’d from pg. 32)

9

Given this environment, operators who managed risk successfully adopted a “controlled growth” strategy. Increased “cash in deal” made trial and error mistakes very costly and expansion expensive.

What’s Ahead for 2014?

Last year was challenging for the BHPH industry, but unprecedented profit opportunities are ahead for operators positioned to capitalize on them.

Sales increases may start slowly in 2014 as tax refunds will again be delayed and because special finance companies will be aggressive during the tax season.

However, as the year progresses “silly loans” will decline as defaults increase and many deep subprime customers will likely return to the BHPH market, if BHPH operators maintain contact with them.

Although inventory availability will remain challenging, sourcing technology is available to find the desired vehicles. Operators who utilize these new tools will fare better than those who don’t.

Operators should broaden their inventory mix to meet varying customer financial needs.

Regulatory scrutiny will force non-compliant “bad apples” from the industry thereby eliminating some unwanted and unfair competition. The increased regulatory scrutiny on consumer relationships will force operators to rebuild their bond with customers.

Increased “cash in deal” should be reduced with higher down payments and larger repayments rather than with higher sales prices and longer financing terms.

Such strategy will reduce default risk and lower amounts being charged off.

38

Operators who embrace technology can increase their efficiency and market share. The technology, which is now available, has never been better for those who implement it properly.

Operators who control their risk and who avoid “matching underwriting stupidity” can avoid increased defaults from deep subprime customers who face the reality of unaffordable car payments.

Successful operators will rebuild customer bonds and regain market share. Capital availability will improve for operators with good management, systems, prudent underwriting, and good performance metrics.

Finally, operators who educate themselves to the latest industry developments, trends, new technology, and regulations through networking, reading, and training will succeed while others fail.

“Learn more and earn more.”

Education is the “Highway to Success”. Good luck!

Kenneth Shilson, CPA, is President of the National Alliance of Buy Here, Pay Here Dealers (NABD), which will host its 16th Annual National Conference for Buy Here, Pay Here and a Compliance Academy at the Wynn in Las Vegas, Nevada on May 18–22, 2014. For registration or for more information, visit www.bhphinfo.com or call 832-767-4759. Mr. Shilson is also President of Subprime Analytics (www.subanalytics.com), which performs electronic portfolio analysis and due diligence services for financial institutions that provide capital to the subprime automotive industry. NABD will be in Booth # 2711 at the NADA convention in New Orleans on January 24-27, 2014.

T e x a s

D e a l e r

February 2014

Manheim Manheim DFW Dallas Manheim Manheim El Paso San Antonio

The 2014

Manheim Manheim Houston Texas Hobby

TIADA VIP Auction Card

San Antonio Austin

Dallas Houston America’s America’s AA Austin/ AA Dallas San Antonio America’s AA North Houston Sparkling City AA - SA

TIADA members get a FREE buy/sell fee (up to $200) at each of the locations listed here.

That’s $8000 in FREE buy/sell fees.

Alliance AA Longview Alliance AA Waco Texas Lone Star AA Alliance AA Abilene Carrollton America Can! El Paso Cars for Kids Independent AA Arlington CM

USA AA Company Amarillo Auctions Heart of Texas Houston AA AA Waco Metro AA Dealers AA Austin of OKC

Only for our members, only from TIADA.

Greater Tyler Lufkin AA Dealers AA

Big Valley Big Valley Corpus AA Christi Donna

Lubbock El Paso

(You’re welcome!)

San Antonio Houston

Permian Basin Dallas Houston North Longview

Austin Corpus Christi

* valid for sell fee only at Insurance AA locations.

legal corner

Options for Dealing With the Voluntary Return of Collateral

by Michael

Dealer Question: I’ve recently

had a number of my BHPH customers drop off their cars. I’m told that they have purchased a newer (or new) car and been advised to simply return the old car to me instead of trading it in. They have apparently been told that there will be no repercussions if they do so. What are my options in these cases?

Answer: In the days be-

In the days before credit became cheap… the voluntary return was considered to be a good thing.

fore credit became cheap and second-chance lenders and credit sellers began financing deeper into the sub-prime pool, the voluntary return of a vehicle was usually the result of a job loss or financial problem that prevented the debtor from making car payments. The voluntary return was considered to be a good thing, since it eliminated the need to repossess the car and the attendant risks and costs associated with the repossession process. Further, if the debtor signed a voluntary waiver of rights, the creditor’s obligation to send repossession notices, to hold the car during the waiting period, and to account for the resale proceeds, were eliminated.

And when a BHPH customer traded the car to another dealer, and the original dealer got a pay-off check, at least the principal balance was paid off, generating more operating capital.

The problem comes, however, when the customer has no intention of trading in the car, and instead returns the car to the lien holder with the expectation that the lien holder will simply write the balance off the books. And February 2014

T e x a s

it’s especially galling when it appears the debtor was counseled to do so.

In this scenario, the lien holder does have options and should analyze the legal implications of the debtor’s action. First, the return of the vehicle and the expressed intention to no longer make payments is a default on the

D e a l e r

contract. The return of the vehicle does not automatically extinguish the debtor’s obligations. Second, the return of the vehicle is a repossession, even if the return is voluntary. Third, the creditor must choose among the various options available for handling disposition of the collateral as any secured creditor would after a repossession.

Forth, depending on the type of disposition method chosen, the creditor may be able to proceed with an attempt to collect any resulting deficiency remaining after applying

W. Dunagan

TIADA general counsel

the proceeds of resale of the collateral against the balance owed.

In my book, Texas Automobile Repossession: A Lien Holder’s Legal Guide, I outline in detail the options a creditor has for disposing of collateral. The rules of repossession and post-repossession procedures come from the Uniform Commercial Code, which has been adopted in Texas as the Texas Business and Commerce Code. There’s not enough space here to cover all the options, but a quick summary of the disposition choices is offered:

1. The Signed Waiver. By

signing a post-default agreement to waive notice and agree to the

The problem comes, however, when the customer has no intention of trading in the car, and instead returns the car to the leinholder...

41

creditor’s acceptance of the collateral in satisfaction of the indebtedness, the debtor consents to the creditor’s immediate reclamation of the vehicle in exchange for the creditor’s forgiveness of the balance owed. Many BHPH dealers seek these agreements after repossessions as a way to speed up the process of placing vehicles into inventory and eliminating sending notices.

2. Strict Foreclosure. The use of strict foreclosure

(or acceptance of collateral in satisfaction of the indebtedness) is initiated by sending the appropriate notice to the debtor and waiting 20 days. If no written objection is received from the debtor, the strict foreclosure becomes final and the collateral reverts to the ownership of the creditor. Again, the balance owed is forgiven.

(There are some limitations to the use of strict foreclosure based on the amount the debtor has already paid on the account. See Texas Automobile Repossession: A Lien Holder’s Legal Guide for details.)

3. Private Sale. If the creditor wishes to preserve any

deficiency that exists after the disposition of the collateral, he or she must use the private sale method of disposition. (There is a procedure for a Public Sale, but it is generally unsuitable for use by dealers and most other car

Texas law makes it extremely hard to collect civil judgments.

But obtaining a judgment and reporting bad credit may give the creditor some leverage in collection attempts. creditors.) Use of a private sale requires sending a lengthy notice containing a list of information mandated by the Uniform Commercial Code. It is also necessary to dispose of the collateral in a “commercially reasonable” manner, and to account to the debtor for any surplus or deficiency that remains after the resale. There are limitations on how the collateral can be sold and to whom it can be sold in meeting the “commercially reasonable” requirement.

If, after going through the necessary steps, there is a deficiency, the creditor can report the deficiency to credit reporting agencies and can seek to collect the deficiency through the civil legal process that is available to all creditors. But, if the resale results in a surplus over the amount owed, the secured creditor has to pay the surplus to the debtor.

Realistically, a car creditor should not carry high hopes of collecting a deficiency judgment from a subprime customer.

Texas law makes it extremely hard to collect civil judgments.

But obtaining a judgment and reporting bad credit may give the creditor some leverage in collection attempts.

The private sale procedure involves more work for the car creditor. That’s one of the reasons that strict foreclosure has become so popular in the last decade or two, especially among BHPH dealers. But the extra work may be justified if a car creditor wants to make a point to a defaulting debtor who wants to be able to simply walk away from the obligation. And the other dealer who recommended that the customer return the vehicle with an assurance that there would be no negative consequences may have an angry buyer on his hands.

Michael W. Dunagan is an attorney in Dallas, Texas who has represented the Texas Independent Automobile Dealers Association for over 35 years. He has written a number of books and hundreds of articles for trade journals and law reviews. His clientele includes dealers, banks, finance companies, auto auctions and credit unions.

42

T e x a s

D e a l e r

February 2014

MOTOR

VEHICL

E RETAIL

INSTAL

LMENT

SALES

RED ITOR SELL ER/C : ADD RESS ZIP: CITY, ST,

CONTRA

CT DAT E:

:

ge. ce Char vehicle of the Finan ase the motor ding ve a part BUYER: PHONE: e to purch ents accor to recei R: act, I choos to make paym its right CO-B UYE and retain By signing this contr act. I agree not. “your.” contr : . contract s do “you” or es in this the other ADD RESS assign this is also shown below red to as other charg ment even if r is refer The Seller may ZIP: Price” agree e, and any CITY, ST, ” The Selle Selle r. .” The “CashFinance Charg promises in this Purchased “I” or “me. tiated with the the ced, l Sales Price red to as Use For Which nego PHONE: to keep all the “Tota the Amount Finan be refer as ld is agree I may , r(s) below r ❒ New Family or Househo The Buye Percentage Rate t price is shown I agree to pay youn signs as a buyer respects. ❒ Personal, Commercial al License Numbe in all perso ble) ❒ Demonstrator ber The Annu TO PAY: The credi of this contract. than one ss or r vehicle(s) (if applica ion Num xe. ❒ Busine act. If more ved the moto to the terms Identificat PROMISE Vehicle t according ule in this contr ted, and appro ❒ Factory Official/E ❒ Agricultural on credi accep ent Sched Model to the Paym ughly inspected, ❒ Used CAT ION IDENTIFI I have thoro Make VEH ICLE OR No.: Year MOT License Stock No. No.: License

Trade-in( Year : Year :

s):

Make: Make:

ANNUAL TAGEmy of PERCEN The cost RATEt as a yearly rate. credi

VIN: VIN:

Model: Model:

Financed Amountof credit provided nt

f.

RGEt The amou on my behal E CHA to me or the credi FINANC r amount me.

The dolla will cost

Price

ents

of Paymhave paid Total nt I will The amouI have made all uled. after as sched payments

on Total Sale purchaseof ent cost of my The totalwith down paym credit $

$

$

$ % $

purchased. vehicle being the motor interest in NT(S ) a security NPA YME Due I give you Date ED DOW owe you, DEF ERR or in the future charge of owe you Amount a late debt I now I will pay any other it is due, ses in it and days after my promi ct and all within 15 payment Charge. on this contra ce sts, owe entire I Finan all intere ve my of the p this To secure security d of part do not recei default, Security: (1)Kee writing. get a refun t nonpayment, ge: If you ises in payment. so, I can NO.: Late Char n abou $ all prom scheduled . If I do ds.

STOC K put ...... informatio % of the er to........

I owe early yment refun ment for ................ the deal and prepa pay all that refer to this docu ................ rce. Ask nt: I can uled date, I will ................

DATE: to enfo Prepayme l Information: e the sched cult........

REDI TOR: diffi........ full befor are........

SELL ER/C ises........

Additiona repayment in .$ D ................ : ER red ken prom ................

FINA NCE : Spo ces) ........

VIN NUMB ADD RESS any requi servi ANT ................

AMO UNT ... $ ORT s, and IMP ................ sorie ION OF , ST, ZIP: ................ ........ acces CITY IZAT ........

ITEM ................ uding any ................ form. ........ER: $YEAR e) ........ ........BUY PHONE: price: (Incl Color: ................

(2) R:abov box 1. Cash ................

UYE L ................ ment follow ing: CO-B(s) ment ....$ ................

MODE........ fied, the Downpay ................

2. Downpay ........: ........ .....$ RESS tions speci l:(3) Deferred ......... $ ........

ADD payment ........ ................ r to the and condi Mode ................

MAKE ZIP: Cash down ent (Refe VEHICLE ................ ................ the terms $ ................

E under CITY, ST, ................ ................ downpaym ................ you,........ ................ase from........

VEHICL $ Deferred ................ ) ................ ................ y purch ........ belowE: -in...........

PRICE Make: hereb 4.A.PHON ................ : I/We........ ................

(Optional) (St. & No.): Gross trade see Line to License NUMBER ........ ........ ........

G:SOLD........Year: ICLE “0” and by seller STOCK VEHBEIN ................ amounts.): - payoff tive, enter DEALER ........ ........ ........ THIS VEH ICLE........ . $ ge: ........Milea ........ TIES FOR -in (if nega ................ part of these ........

No.: ........ trade ........ keep Stock er may = net ................ .$ ................ WARsRAN ................ lf (Sell ................ payment ................ minu 2) my beha price (1 ................ ................

Total down others on of cash ............$ ................ ................ paid to .: balance ss ................ ................ V.I.Nany.................. amounts 3. Unpaid y) ........ regardle company.. including ance ance comp Services tive equit repairs charges insurs, r and insur to any (nega to Othe $ ff 4. ... y for paid payo ance paid Accessorie insur trade-in onsibilit insurance Options,or comp anies damage A. Net $ no resp damage ...mes physical company TOTAL of physical er assu $ rages with CE $ insurance B. Cost ... nal cove . The deal paid to CASH PRI of optio REPAIRS t insur ance C. Cost $ nal credi Gross FOR ANY cle. e $ ................ of optio Phone: COSTS vehi Allowanc ................

D. Cost $ L PAY ALL nts about the ........................

Trade-in .............

Life any YOU WIL comp ................ eme ........ .$ ff $ ance ................ oral stat ........................

-in Payo ................ insur any Disability ................

Net Trade to theof ........

To: ................ $ ........ ........Lien ance paid Show nt agencies.. ................ .............. ................ insur r rnme ........ ........ gove Bala nce $ E. Othe $ ................ ................ paid to ................ ...........

Unp aid Pric e ial fees ................ ................ ................ ................ ling s for F. Offic ess: ................ of Cash ................ tory tax... hand Addr ................ .......... $ ........ the part the nt: rs for ................ er’s inven % of Amou ................ ................ ................ to buye _ired by law.

Lienged y of G. Deal ................

Dealer's $ copal ................ ________ ................ a ada ..........$ requ tration fees. berchar and forcarg er's ntory Tax r taxes........ may er ................ ................ notice is ................ : ser labo deal but $ e and/or regis deal ........ dad ........

H. Othe Inve This se ........ the the law, pued the ........ of parties. Ask canti licen Dated and % the pero ired by by ................ ................ ns,una rnment of title fee... usioer not requ por la ley, ________ e exced period. ................ ................ is pay Tax e rights.

I. Gove $ ed to antyerido , excl certificate no pued ary rage will nt agre fees......... requNo.: cove ................ erfee even mor State Sales ment rnment no esStock the warr e amoungación By:A docu dealnabl mentación Color: inspection ................ Quoted anty The J. Gove give you docu duri ment rario vehicle ial fee.TY. ofdewarr faildocu d a reaso r.............. es" may rnment and that de an offic RAN to deale hono ONion............. anat not exceeems rario is not ATI License Fees $ K. Gove . Un $ anti expl TED WAR fee mayred l.syst ce fee paid Un honofor full ORM ........ lied warr ary feeLIMI a venta on INF ........"imp ty servi mentary cove Model: N: oficia ume con INuna FULL ........ document (St. & No.): os nt therario Registrati e law, ley.

L. Depu ionadDEstat laer Fee: A the sale. A docu License doc TRA relac e es un hono DURATIO anty Und to mentary erida. por mentos : ons requ $ Certificat ación no de docuwarr es Make M. Documents relating gati $ (4) ón ment ...

Fee icaciir obli docu de manejo docu Mileage: repa of Title s rario de Esta notif Year: purpo se) (5) ... $ Un hono r como gasto las partes. ........ $ describe mentary $ ........

D: and Docu e: ........ compradoe acordada por paid ERE ** is (6) ................ Phon............... $ S COV for Fee ify who razonabl identTEM ................ ........

V.I.N.: SYS (7) $ (Seller must ................ ................ for ............... r charges ................ ................

N. Othe ................ $ sed ........ sed ........ asses ff To: ................ ............... ge isPayo ge is asses to ce Char inspection, ce Char ................ ................ $ state Finan ........

Finan .... ........ the ........ ........ performs and other charges. which the ................ which the to ................ ................

If the Seller cts, ges Upon ges Upon ................ ................ nmentagency. nce, service contra ssed) ess: ................ zed Char zed Char . ge is Asse Addr ........................ ................ or gover insura Plus Itemi Total Itemi ce Char ................ Seller to a third party retain parts of the ........

Balance $ TAL h No Finan Unpaid ................ ................ insurer SUB -TO paid by may also than $ 5. Total By: (Upon Whic ................ tion fee will be have. The or loss. ................ and the Seller nt not more Quoted I already damage been Sales Tax ................ ................ d by Seller state inspec ctible amou of has not insurance 6. Total (5 + 6) of in: Sales Tax) agencies. Any e fee will be retaine eventand with a dedu de proof OF Cash Tendered $ in the time Financed nment trade servic : ssed Upon provi or to any nt I owe, the policy ATION not ing at this 7. Amount wantrd and deputy (Not Asse paid by Seller to gover e Irega Good Until in the amou anyon paid under entary fee has TO eter is workTHE ITEMIZ andSED Charge with will be n to be odom ge or loss nce from ants CAU 8. Financefee, and license fee inspection fee. Docum insura company warr the perso st dama DUE $ rtyand asstated above. The LUDED IN insurance AGE you propets each ED ed again ge.

DAM as an TOTAL name esen obtain insur is INC Taxes, title retain $7.00 of by dama TY ge must le may repr I IS teral r PER ed to flood airab will act. hase nce. I l milea ❒ FINANC ed the colla PRO or unrep Purc the Seller this contr expos rty insuraand actua INSURANCEtotal loss law, You byfigur I must keep Rate. ired of prope a URY AND not been owe under ct to 1. The true BIL H SALE red ntage not INJ subje RANCE: not requ fee CAS and has all that I to give you proof ced. ITY been ILY rende Perce is ce may al ❒ paid title, repla fee LIA INSU balan ct as TY I have red or ipal ary the Annuary docu FOR has notBODreconditioned ce subje . I agree PROPER nce until details RGErepai sameAasdocument A princmentipal balanfor GEleFOR of the The vehic 2. ERA ess in Texas sale. al fee. rebuilt/or this insura law.

A CHA not be the porti theon no esof sale, id princ idto COV cle. Ask salvage, ing unpaby ired unpa acióntime I must keep rized to do busin rate not an offici vehi is may Thethis actfee s relat to the issued a : UNLESS e is requ the URANCEbeen contr autho uled. mentIos ary ment document Code of docu am notic contract, de days Thisment ge on rario CT. must be %.docu as asched de URANCE BILITY INS lingcedocu made char jo k s Finan es. This 90 ose. spaces.able date of this in mane parti Fee: Aby for hand Un hono were thersTexa LIA ITY INS the dad razonition s an extr l. trac s de blan t with S CONTRA rate from the particular purp eter ents by is mentary at buye ed canti to lable gasto days oficia any THI to d paym 90 a una LIABIL T FINANCED, Docu ed n defin cond IN con act all rarioicerador como agree as s for r odom withi ED nt as if od charg hono exceder conteains t is avaies un The contr ** certain TED methbe amou Price a serv contract bility or of fitnesthe mileage and/oprior owner trac ngs may Salecon al comp no puedand und er buyda it or if it AMOUN IS NOT INCLUDNCE CHARGE: llment earnibut Totalnable a service es.aciónIfno youcarga sing ice hanta a reaso E INSPEC dand I read ment ied by the charg owe serv ICL ts. mentación ents, ns. excee In disclo e ser A enters into antie s of merc docu righ de docu deexcl por laI ley. usio pued befo ered.

CT. S VEH alre of Paym ned check anty, or ed CT vehicle suppl provide.

OTHERS FIGURE THE FINAthe scheduled insta all that rario warr AND rario pero ract TRAUn reture, ition Total ts.E THI hono or hono requerida en warr no impli and rer may reading of the le was last regist cont la ley, ing CON Un n es ance . add HAV Charge, es, lYrigh factu por this you s a writt in adv pric CON TRA sales tax, eter YOU officació S be erido sign MA the vehic le manu ge by apply the Finance una venta HOW YOU notif SERVICE r odomor my lega CT, pay requ THIwill notos uctible, seller make congive charg may Esta YOU r vehic ect and there ce Char in which TRA willionad ge and/o maj ER. es" prot:IF righs.t to - Irelac Unless the MSle,OF the moto anti de the laterage, ded er toLER r vehic the Finan Charge. You based las parte the milea S CON by the state e the thatTHI of some tolist TER por ract ER'S ORD asa DEA hav not inclu to cove to the buy the moto RANTIESed, .on Iada lied warrlaw, vehicle inform ationg was issued THE thisERcont a Finance ce Charge does se.

OF WAR ss or TO THE LOT THIS BUY n udin the acord ASK the moto I rSIGNED le which Noteicelaw "imp EEimpli keep N:LAIM THE TH ON NG: stat will TIO AGR . Under on the rever s covering ORE on writte, inclthe vehic s, expre to a Finan

be: ents dule will ent Sche unt of Paym My Paym Payments Amo of Number

ents When Paym

Are Due

IDE R'S GU ORDER BUYE BUYER'S

Y RRANT NO WA AS IS NTY WARRA

I tion I DISC on RNI antie T BEF antie PEC ge. good faith icate of I sign T: OFF rma in info SET FOR warr INS EIPOR char Arbitrati 1-800 SELLER’S ER WA reliedal s noON ONS154 title certif t any warr M THA -252-9 nceSE has contract the fina REC HER Date: ition ement to CO., CON rs on the notI affec CTmake EIT INC. DITI CONFIR CONSUM a copy of the , the add ICseller the does of PURCHA CON TRA ntseller AND sion IT. ndPRE ge that appea the buyer TING : by the Agre TER orta to MS OF provi le to imp Ythis MECHANThisCOP vehic ELL PRINDate IT.ent of milea s. n is coveredCALL entitled in a partial refu BY THE M for BURR ENTROF g ofFOR IEW TO a statem vehtrans TED GMYOU readin S Date: REV and/or mot or this icleactio DER EE AGR THI CE. REOR vehicle may obta ACK NOW LED OF A COMPLE 54 AND ITtheAND K OF E of TANDTO LER'S OFFI (800) 252-91 in useisd checked, S EIPT TO TAK ❒ ur THE BAC Date: THE DEA REORDER CALL Buyer: If this box READ, UNDERS SEE BUY ER’ LEDGE REC WA S FREEthat may occ TO LER, AT I 999 HAV THE DEA r: E 4/20/1 OF · I/WE ACKNOWTO ME, AND defects Buye CER : rred s Guide AN OFFI Co-Buyer OVED BYSale 501 · Buyer s Tax Defe GAVE IT 52-91 54 bpc #24-5 APPR ings · DER CALL 800-2 r: uyer: D: Earn UNTIL Selle EPTE REOR ent LER ACC TO Co-B DEA allm d Inst ING ON Inc. dule g Co., NOTeBIND Seller: - Sche l Printin 1· Burrel er:I SIGN IT. ER ISPag Offic ORD 2009 ANDCONTRACT YOU THIS hed09 · © Copyright Attac · 9/1/20 UNTIL rate 35 Arbit#24-43 VALID By: ement To bpc IS NOT ❒ Agreg Co., Inc. TRACT Attached l Printin THIS CON ❒

Burrel 2009 · Addendum Copyr ight Insurance 09 · © · 9/1/20

316 bpc #24-4

TIADA Membership Application

2014

Business Name: ____________________________________________ Select one:

Dealer Member

Associate Member

Contact Person: ____________________________________________ Address: __________________________________________________ City: _________________________________________

2014 TIADA Membership Dues:

State: _______

Zip: __________________ County: _____________________________

$425 (Dues include NIADA membership)

E-mail address: _____________________________________________ Phone: _______________________ Fax: ________________________ Dealer P Number: ___________________________________________ Who referred you to TIADA? __________________________________ Mailing Address (if different from above): __________________________________________________________ City: _________________________ State: _______ Zip: ___________

PLEASE INDICATE PAYMENT METHOD: Check or Money Order payable to TIADA Check # __________ Credit Card Card Number: __________________________________________________ Expiration Date: ____________ Monthly Payments - $100 initial payment & $29.50 per month Via Credit Card (Please enter card information above. Authorization Agreement required - contact state office) Via Bank Draft (Authorization Agreement & voided check required - contact state office)

Mail or Fax Application To: TIADA Membership Services, P.O. Box 127 FAX 512.244.6218

www.txiada.com

512.244.6060

Round Rock, TX 78680-0127 800.442.5944

Dues are not deductible as charitable contributions for income tax purposes but may be deductible as miscellaneous itemized deductions, subject to IRS restrictions. It is estimated that 20 percent of your dues dollars is used for lobbying activities and is therefore not deductible.

44

T e x a s

D e a l e r

February 2014

THINK FASTER Take advantage of our special introductory rate of

$30 A MONTH

for the first six months, when you sign up for a year.

WWW.BLACKBOOKAUTO.COM/THINK CAL L 8 55- 371-7534 T O LEA R N M O R E PROMO CODE 11802

Black Book速 is a registered trademark of Hearst Business Media Corporation.

behind the wheel

Martin

When One Door Closes, Another Opens

T

IADA is closing! On February 11th 2014 TIADA will close its doors in Round Rock, Texas for the last time. The next day TIADA will hang a shingle at 9951 Anderson Mill Road in Austin, Texas.

The new location will more than triple the size of the TIADA headquarters and is designed to accommodate future growth. It’s an exciting time for the association and much of the credit goes to the current and past officers and the many volunteers who set their sights on aggressively growing the influence of the association.

The new building will assist TIADA as we continue striving toward our long-term goals, spelled out in our five-year strategic plan. Being in Austin puts us closer to the Capitol as well as the various agencies that regulate our industry.

This new location has inherent strategic advantages, but it will also make us more efficient. With a conference room, we will be able to invite legislators and policymakers to the office, a positive step for the association toward building the strong, stable and professional image you deserve.

But what exactly does a new building mean to the more than 1300 members of the association? It means we can increase our staff to better serve and represent you. Below are just a few of our goals: More efficiently answer incoming member calls.

Conduct an annual member survey that will be made available to TIADA members documenting industry trends.

by Jeff

tiada executive director

Build a better website designed to assist our members 24/7.

Improve our services and discounts program with a focus on helping members be more successful dealers.

Expand our legal consultation program to better assist you with business-related legal questions.

Develop online, on-demand training programs that will help you be compliant.

These are some of the enhancements you’ll be seeing in the near future that will build momentum for your association to continue to gain influence and create more value for you, the member.

In addition to all of the exciting changes listed above, I hope this new office creates a sense of pride. As a member-owned, member-governed association, you own this office. It represents the image of our industry and profession. With that in mind, we designed the space to have a very professional, yet roll-up-yoursleeves, workman-like feel. We tried to create an environment that captures the entrepreneurial spirit we see in our members every day.

Over the next few weeks I expect we will be working out the kinks and bugs that come along with change, but very soon we will be settled in. I want to personally invite you to stop by and visit anytime you are in Austin.

After all, it’s your office. Congratulations.

As a member-owned, member-governed association, you own this office. It represents the image of our industry and profession.

46

T e x a s

D e a l e r

February 2014

NOT ALL PROGRAMS ARE CREATED EQUAL Debt Cancellation Coverage Voluntary Debt Cancellation Coverage (DCC) is an alternative to requiring Comprehensive and Collision Insurance.

DCC provides debt forgiveness in the event of a Total Loss and is offered at the point of sale.

See what our clients are saying: “Our Debt Cancellation Program, serviced through AVP, was one of the best financial decisions our company has ever made in its 21 year history.”

Benefits NEW PROFIT CENTER REDUCES EXPENSES COLLATERAL PROTECTED INCREASED CASH IN DEAL INCREASED CSI

Michael Brill, President B&B Automotive Inc.

FINANCED WITH CONTRACT FORMS REVIEWED BY OCCC

AVP DEALERS MAKE MORE MONEY PERIOD! www.avpadmin.com

816.756.5430

*Substantial Discounts for TIADA Members

Texas Independent Automobile Dealers Association P.O. Box 127 Round Rock, TX 78680-0127

PRSRT STD

U.S. Postage

PA I D Jefferson City, MO

Permit No. 210

ONE BIG STATE

Manheim Dallas-Fort Worth

Manheim San Antonio

Manheim Dallas

Manheim Houston

Manheim Texas Hobby

12101 Trinity Blvd Euless, TX 76040 817.399.4000

2042 Ackerman Rd San Antonio, TX 78219 210.661.4200

5333 W Kiest Blvd Dallas, TX 75236 214.330.1800

14450 West Rd Houston, TX 77041 281.890.4300

8215 Kopman Rd Houston, TX 77061 713.649.8233

SALES WEDNESDAY, and every other FRIDAY

SALES MONDAY, TUESDAY, WEDNESDAY, and FRIDAY

SALES TUESDAY

SALES THURSDAY and every other WEDNESDAY

SALES MONDAY, WEDNESDAY, THURSDAY, and FRIDAY

WIN BIG WITH MANHEIM IN TEXAS Visit all Manheim locations on the web at Manheim.com

manheim.com | 866 • Manheim