Texas Dealer, May 2013

TxDMV’s Whitney Brewster on the Troubled System’s Issues... and Potential Solutions

In This Issue:

- Michael W. Dunagan on Changes to the Buyer’s Guide - The 21st Century Sales Manager - Down to the Wire: Texas Legislative Session Enters the Home Stretch

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2013 TIADA Board of Directors PRESIDENT Byron Riley/Uncle Buddy’s PreOwned Autos, LTD. 409 North Loop West Houston, TX 77008 Office: 713.869.3405 Email: byron@unclebuddyauto.com CHAIRMAN OF THE BOARD Scott Allen/Auto Land 5925 E. Belknap Haltom City, TX 76117 Office: 817.834.4222 Email: scotta@goodwheelsgooddeals.com PRESIDENT ELECT Michael Thomasson/Mike Carlson Motor Company 264 Exchange St. Burleson, TX 76028 Office: 817.366.9578 Email: mthomasson@mcmcauto.com SECRETARY Brent Rhodes/Fiesta Motors 5150 Industrial Way Drive Buda, TX 78610 Office: 512.312.2201 Email: brent@fiestamotors.net TREASURER HL Hensley/Automax of Lubbock P.O. Box 5627 Lubbock, TX 79452 Office: 806.744.3533 Email: hl@gospac.com 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 VICE PRESIDENT, FORT WORTH (REGION 2) Ahmed Belmeshkan/New Rio Grande Motors 2000 NE 28th Street Fort Worth, TX 76106 Office: 817.740.0801 Email: newriogrande@yahoo.com VICE PRESIDENT, DALLAS (REGION 3) Kathrine Tolsch/CICO Auto Sales 11050 Harry Hines Blvd.

Dallas, TX 75229 Office: 214.352.9282 Email: ktolsch@verizon.net 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) Sonny Paredez/Discount Auto Center 7203 NW Loop 410 San Antonio, TX 78245 Office: 210.680.5600 Email: sonnyparedez@yahoo.com 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 Tommy Gregory/Abilene Used Cars Sales Inc. 497 E.S. 11th Abilene, TX 79602 Office: 325.676.8000 Email: aucsinc@sbcglobal.net 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

Volume XIII

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Issue 5

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M a y 2 013

texasDealer contents

5 Officers’ Message

by Michael Thomasson, TIADA President-Elect

6 On The Cover: What’s Going On With eTags?

by Whitney Brewster

9 News & Notes 10 Upcoming Events 10 2013 Auto Auction Directory & Resource Guide 11 Local Chapters 12 Down to the Wire: Texas Legislative Session Enters the Home Stretch

by Mario Martinez

14 The 21st Century Sales Manager

by Jennifer Suzuki

16 Regulation Matters: What Goes Up...

Is Probably a Violation

by Danny Langfield

18 Six Essential Elements to Monitoring Lead Handling

by Joe Webb

27 New Members 29 Fines & Violations 33 Legal Corner: Is That Car For Sale?

by Michael W. Dunagan

38 Behind the Wheel On The Cover:

Portions of the Texas Dealer May cover include an image credited to M. Niebuhr / Shutterstock.com.

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

Actually, it’s happening at www.TiadaAnnualConference.com. Have a look at our Education page, where you can keep up with our breakout session presenters as they are added. And follow us on www.Facebook.com/TiadaAnnualConference to get all the conference updates first.

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, P.O. Box 127, Round Rock, TX 78680-0127.

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 Working to be Sure We Are Heard

H

B3071. A worker lien bill that would pass a mechanic’s rights to a finance company and then allow that finance company to get a mechanic’s lien. If you are a car creditor and your jaw isn’t dropping open right now, then I’m not explaining this bill very well. This thing is B-A-D business.

The Texas Legislative session is in full swing and TIADA is right in the thick of it all. A lot has been written about how the “political process” works and how an association like TIADA can affect positive results through the efforts of members, from attending lobby day to meeting with your local representatives for a coffee or fundraising events. And this legislative session is proving once again the grassroots efforts of TIADA are working. First kudos must be given to the TIADA staff; they must have been cloned because they are everywhere this session. Mario Martinez, our new legislative consultant, has become a tremendous asset. TIADA has made much progress in the legislative year, but there is much more work to be done.

Back to HB3071. The bill as proposed would allow a finance company to take a first lien position. Here is how it works: your customer takes his vehicle into a shop to get work done. The shop does the work and when your customer gets the bill he realizes he can’t afford the repairs.

The shop refers your customer to a finance company and the customer signs a finance contract for the repair costs with an APR north of 250%. When the customer quits paying that loan the finance company repossesses the car and files for a mechanic’s lien.

by Michael

Thomasson

Mike Carlson Motor Company (Burleson) TIADA PRESIDENT-ELECT

The finance company seeking this change is already operating this way in Texas. In my dealership we have had to sue them to get our vehicle back on several occasions. With the help of TIADA general counsel Mike Dunagan we have aggressively protected our liens.

HB3071 was assigned to the House Business and Industry committee and as luck would have it my state representative, Rob Orr, sits on that committee. I have developed a really good relationship with Representative Orr over the years by doing those coffees and fundraisers and golf outings I wrote about earlier. TIADA has built a keyman database that captures those relationships and links me to Rep. Orr. When the state office notified me that HB3071 was in his committee I called Rep. Orr and explained our serious concerns. He immediately understood and agreed with our position. I was not at the committee hearing but I understand Rep. Orr stepped up for lien holders and lead the questioning that at least slowed down the momentum of that bill. Simply put, he understood and championed our cause that day.

I am not sure what the final outcome of HB3071 will be but I feel good about the work we are doing as an association. If you have a close relationship with a legislator or key staff member, I can’t tell you how important it is to share that information with the state office. These relationships we cultivate can have a make-or-break impact on legislation that could cripple our business.

Having a seat at the table — that’s what it’s all about.

TIADA has made much progress in the legislative year, but there is much more work to be done.

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on the cover

by Whitney Brewster

TxDMV Executive Director

TxDMV’s Whitney Brewster on the Troubled System’s Issues... and Potential Solutions {Editor’s note: In response to numerous member calls to the association, TIADA staff asked for a meeting with TxDMV Executive Director Whitney Brewster to discuss how the agency planned to address the serious problems with the e-Tag system. In the meeting, Ms. Brewster offered to provide some details and insight into these issues as well as some immediate solutions and long term fixes in an article for this magazine, found below.}

T

he tools and services that the Texas Department of Motor Vehicles (TxDMV) provides to auto dealers across the state help promote the economic well-being and development of the industry. When those tools and services aren’t meeting your expectations and are affecting your ability to do business, as we’ve seen recently with the e-Tags system, I take it very seriously.

In keeping with my commitment to maintain an open and honest line of communication with stakeholders, I want to update you on the immediate steps we’ve taken to address the challenges with e-Tags. First, I want you to know that the proper operation of this system, as well as our future

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technology improvements, is a top priority for the TxDMV. Our technical teams investigating the cause of the e-Tags system slowdowns discovered issues related to the processing of transactions in the database and took immediate steps to mitigate these issues.

Programmers also changed the duration of time that a transaction is able to be left pending. This change will reduce slowdowns caused by having multiple transactions from the same user being processed at the same time.

Previously, if you re-started a transaction because the system was not responding, the initial transaction would remain pending for up to ten minutes.

That pending time has been reduced from ten minutes to two minutes. In addition, staff has assigned a dedicated network port for the e-Tags application to alleviate congestion.

The TxDMV’s long-term solution will be the updating of the Registration and Titling System (RTS) database to current standards which will result in a more direct interface between it and e-Tags. The procurement for this multiyear project is in progress.

I have directed our Motor Vehicle

Division to expedite any requests from dealers to increase your allocation of Internet Down tags. This is especially important if you are a new dealer since the current rule sets the allocation at what seems to be an unreasonably low number. I have asked staff to propose a change to this rule for presentation to our board as soon as possible.

In the meantime, if you would like to increase your allocation of Internet Down tags, please contact Bill Harbeson at Bill.Harbeson@TxDMV.gov, and he will take care of what you need. While we are working hard to avoid any prolonged e-Tag outages in the future, I still want to make sure the TxDMV is doing everything possible to minimize any disruption in your business.

It is the vision of the TxDMV to be the most efficient, effective and customer-driven agency in Texas, providing excellent service to all, including all Texas auto dealers.

Addressing our technology challenges is a critical step toward achieving that vision. Thank you for your patience, and please know you can always call on me or my staff with any questions or concerns.

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May 2013

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news & notes

Happenings in the Industry…

compiled by Texas Dealer staff

Recovery and Remarketing Associations Merge

A

merican Recovery Association (ARA) and National Finance Adjusters (NFA) announced that they have merged into one trade association. The new trade association will move forward under the name of the American Recovery Association (ARA). As part of the comprehensive agreement, American Recovery Management Solutions (ARMS) joined with Relliance, Inc. to form the largest industry-owned forwarding and facilitation cooperative in the United States. The co-op will be named National Finance Adjusters (NFA).

The new trade association, ARA, will focus on compliance training and monitoring, education and training through certification programs, legal representation and lobbying, promotion of member and lender direct relationships, networking, and a captive insurance program.

NFA, the co-op, will focus on offering the lenders a viable alternative to the standard forwarding model, while regaining market share lost to the national forwarding companies. In addition to a centralized assignment, communication and accounting, and risk mitigation, lenders will have the option of communicating directly with the agent if they choose.

The first order of business of this combined entity will be the announcement of a new compliance-monitoring platform that will serve the membership.

“Members of both associations, along with lending and recovery industry professionals, have long asked for this to happen and I am proud to be a part of this monumental and historic occasion,” said Jerry Wilson, president of NFA. “The history of these two associations are so intertwined that it makes the merger seamless. In addition, the merger of ARMS and Relliance into one co-op is a very important part of this agreement.”

“We are proud to take this step to create an organization that will concentrate on education, training and compliance monitoring, which is badly needed in today’s challenging environment,” said Mary Jane Hogan, president of ARA. “ARMS was created to offer clients a single contract and billing source, so ARA members could receive the maximum amount of revenue on an

May 2013

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assignment. As we move forward, the new NFA will continue to fulfill this.”

The home office of the newly formed ARA will remain in Dallas and the corporate office of the co-op will be located in Scottsdale, AZ. Membership into ARA will be required to join the NFA co-op.

New Board Member Appointed to TxDMV

G

ov. Rick Perry has appointed three members to the Texas Department of Motor Vehicles Board for terms to expire Feb. 1, 2019. The board administers and enforces statutes relating to certificates of title and registration of vehicles, identifying markings on commercial motor vehicles, motor carrier registration, single state registration, motor transportation brokers, foreign commercial motor transportation, sale or lease of motor vehicles, and salvage vehicle dealers.

Luanne Caraway of Kyle is the Hays County tax assessor-collector. She will assume the position formerly held by Cheryl Johnson, Galveston County tax assessorcollector. Luanne is a member and past president of the Tax Assessor-Collector Association of Texas, a member of the Texas Association of Appraisal Districts and Texas Association of Assessing Officers, a board member of the Texas Association of Counties, and a past member of the Texas School Assessor Association. She is also a member of the Calvary Baptist Church Finance Committee, a past board member of Hays County Crime Stoppers and Central Texas Life Care Center, and past co-chair of Hays High School Project Graduation.

Luanne has also been a speaker at the Austin IADA’s local chapter meetings.

Robert “Barney” Barnwell III of Magnolia (public member) and Raymond Palacios Jr. of El Paso (franchise dealer member) were both reappointed to the board.

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Upcoming Events TIADA DEALER ACADEMY May 2013 6 Keeping Your Dealership

Legal & Compliant Norris Conference Center Sundance Square 304 Houston Street Fort Worth, TX 76102 817.289.2400 Online registration available at www.txiada.com

June 2013 17 Dealer 101: Nobody Told Me That!

DoubleTree Dallas Market Center 2015 Market Center Blvd.

Dallas, TX 75207 214.741.7481 Online registration available at www.txiada.com

OTHER TIADA EVENTS July 2013 28-31 TIADA Annual

Conference & Expo Hyatt Hill Country Resort & Spa 9800 Hyatt Resort Drive San Antonio, TX 78251 210.647.1234 Online registration available at www.TiadaAnnualConference.com

28 TIADA Board of Directors Meeting San Antonio, TX (In conjunction with the Annual Conference & Expo)

30 TIADA House of Delegates Meeting San Antonio, TX (In conjunction with the Annual Conference & Expo)

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2 013 T I A D A a u t o a u c t i o n ABILENE CM Company Auctions 2258 S. Treadaway / 79602 325.677.3555 / 866.310.3555 www.cmauctions.com Gregory Chittum, Owner Thursday: 10:00 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 Beaumont Dealers Auction, Inc. 12151 Highway 90 / 77713 409.866.5677 www.beaumontdealers.com Laura Miller-Sattler, Owner Tuesday: 7 PM 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

CORPUS CHRISTI Big Valley Auto Auction 5661 Agnes St / 78405 361.356.2020 www.bigvalleyaa.com Bernard Watson, Owner Billy Kratz, GM Tuesday: 10 AM

DALLAS / FT. WORTH METROPLEX 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

HOUSTON America’s Auto Auction – North Houston 1440 FM 3083 / Conroe / 77301 / 936.441.2882 www.americasautoauction.com Buddy Cheney, GM Ben Nash, Sales Manager Mondays: 6:30 PM

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

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directory & resource guide 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: 7:00 PM

TYLER Greater Tyler Auto Auction 11654 State Highway 64 W / 75704 903.597.2800 Tuesday: 5 PM - Repo Lane Tuesday: 6 PM - Consignment

WACO Heart of Texas Auto Auction (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. IH-35 (exit 346) / 76715 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 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: 10:00 AM - GM Sponsored Factory Sale May 2013

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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

Local Chapters VICTORIA Alan Wilkinson • AW Motors 361.570.2400 alan@awmotors.com 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 ktolsch@verizon.net Meetings every other month HOUSTON Greg Zak • Dixon Motors 281.931.1300 houstoniada@gmail.com Meeting - 2nd Monday (Monthly) WACO-HEART OF TEXAS Bill Miller • Bill Miller Used Cars 254.753.4161 bmillercars@hot.rr.com 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 BEAUMONT Laura Miller-Sattler Sattler Automotive Group 409.866.2987 lsattler@sattlerautomotive.com Meetings quarterly 11

feature Down to the Wire: Texas Legislative Session Enters the Home Stretch

by Jeff Martin

TIADA Executive Director

A

s the Texas legislative session enters its final month, there is much uncertainty as to the fate of dozens of bills of interest to the association and the industry. The following is an update on a few key pieces of legislation and TIADA’s efforts at the Capitol over the last several weeks.

Mechanic’s Liens (HB 3071 – Pitts)

This bill raises very serious concerns for all Texas car creditors. As currently written, it would allow a third party company to finance vehicle repairs, and would allow a mechanic’s lien to be assignable to that third party. It would allow the third party to repossess the vehicle in the event of a default on the repair contract, and to foreclose on the mechanic’s lien without a release of lien from the original lienholder. TIADA vehemently opposes this bill. It was laid out before the House Business & Industry committee on April 9, where Phil Lathrop (VP Auto Sales – Garland), among others, testified against it. Many dealer members also contacted their representatives by phone and email to express their opposition to this legislation.

Representative Patricia Harless has met with Rep. Pitts’ staff, as have representatives of the Independent Bankers Association of Texas and various other stakeholders, to express concern over this bill and to work toward resolution. At press time this bill was still pending in committee.

Curbstoning (HB 2690 – Elkins)

This is TIADA’s bill aimed at giving law enforcement effective new tools to fight curbstoning. It was laid out before the House Licensing & Administration committee on April 9 and passed out of committee on April 16. At the hearing on April 9 Byron Riley (Uncle Buddy’s PreOwned Autos – Houston) testified in favor of the bill. Additionally, numerous dealers came to the hearing in person to sign cards in favor. The next stop for this bill will be the Calendars committee, where it will need to be assigned a date to be heard before the full House. If the bill is passed out of the House, it will then be taken up by the Senate.

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Limited Insurance Policies (HB 1773 – Thompson; HB 1880 – Lucio III; SB 1567 – Davis; HB 949 - Smithee) The bills above all attempt to address the issues surrounding named-driver, excluded driver and limited policies. Each of these bills has either been laid out before or referred to the respective insurance committee in the House or Senate. Brent Rhodes (Fiesta Motors – Buda), Robert Beck (Stop and Drive – San Antonio) and Jeff Martin (TIADA) have testified in favor of these bills.

HB 1773, which is co-authored by Rep. Harless, passed out of committee on April 16 on a 5-4 vote. Other than HB 949, these bills continue to face stiff opposition and an uphill battle for passage.

VTR-136 County of Title Issuance (HB 2947 – Harper-Brown)

This TIADA bill proposes the elimination of the VTR136 form as a required document in the deal jacket. The bill was considered at a public hearing in the House Transportation committee on April 16, where Scott Allen (Auto Land – Haltom City) testified in favor. At press time that bill was also left pending in committee.

Special thanks to the 186 dealers who sent emails to their legislators on various bills, as well as the following dealers who appeared at the Capitol in person to register in support of or opposition to various bills: Trey Crouch (Wheels on Credit – McAllen); Robert Blankenship (Texas Auto Center – Austin); Mark Fish (Dynamic Motors – Austin); Byron Riley (Uncle Buddy’s PreOwned Autos – Houston); Phil Lathrop (VP Auto Sales – Garland); Nathan Castro, Greg Chapman, Steve Chapman, Wendy Chapman (Bill Chapman Auto Sales - Austin); Kanton Labaj (Third Coast Auto Group – Austin); and Margie Villela (Kyle Chapman Motor Sales – Austin).

There are a number of other bills that will continue to be tracked and worked by the association; please visit the Legislative Action Center at www.txiada.com for the most up-to-date information.

As always, we will continue to work on behalf of our members and the industry to ensure that your voice is being heard.

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feature The 21st Century Sales Manager

by Jennifer Suzuki Founder & President, e-Dealer Solutions, Inc.

{Editor’s Note: Jennifer will be a featured presenter at the 2013 TIADA Annual Conference & Expo}

A

s I return home from three, week long trips to various dealerships, I can’t help but reflect on the similarities. There is something so serene about being on a plane; maybe it’s because I can avoid all the day-to-day, hour-by-hour, distractions and focus on a few topics rather than fifteen! I have seen 9 different dealerships this month and I am in each dealership for the same reason – to consult and provide sales team training.

I beg the question, how can 9 different dealerships suffer from the exact same setbacks?

The internet prospects and incoming phone calls have been escalating for years now. The floor traffic seems to diminish year over year. With these basic observations, you must ask yourself, how is my dealership changing with these statistics? In other words, are you more focused on sales training for walk-ins or for incoming phone calls and internet prospects? Are there sales processes for all aspects or just mainly one?

I continue to see the focus, if there is a focus, on walk in traffic. I understand. There is nothing better than a prospect in your showroom! But why the lack of focus on processes for the other two lead sources? Combined, you have majorly more sales opportunities, in most dealerships!

The most complicated part of what I am about to say will be recognizing your areas of opportunity and implementing changes… ‘execution’ IS the most difficult aspect of change.

The first thing that I generally recommend is that the managers get more involved. It’s that simple. Yesterday’s managers are a thing of the past; it’s time to get some energetic, get out of their seats kinda people… ready to show a salesperson how it’s done- kinda attitude! We need managers that aren’t afraid of the phone, they love, capital ‘L’- LOVE the phone! They can hold a quick sales team meeting on the fly and huddle the group together and take a ‘live’ incoming sales call and follow the process that has been road-mapped out for the dealership!

This sales manager is no old-school, “sales, how can I help you?” kinda guy or gal… he/she is modern with fresh ideas and approaches! At best, this sales manager can be a team leader AND coach!

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Sounds too good to be true?

I believe. I believe you can hire, groom and develop this kind of talent! You want it? You want it bad enough? You will focus on it and you will work towards it and you will achieve it! Like anything, this requires focus and dedication.

Today’s sales managers have to be able to rock the phone! They have to be able to send emails to prospects and not just a template that says, “Hey, I’m the manager and I am here to help you buy a car.” This manager can personalize any email template and make it a valuebased, obligation established, professional and engaging kinda email! This manager can show his/her team how to make it happen, day after day!

Today’s sales manager must be able to train and to hold a team accountable hour-by-hour… with a “dowhatever-it-takes” kinda attitude!!! He/she’s picking up the phone and calling each salesperson when a lead has been sitting there for 3 minutes! You feel what I’m saying?

The sales manager is as well versed on the CRM as anybody could be! In fact, this manager could be a trainer for the CRM company he/she knows it so well!

That’s what I’m talking about! This manager is buzzing around the CRM all day looking for tasks – both completed and incomplete. Calling a salesperson out when tasks aren’t being completed!

See something missing in your formula for leading a great team to the highest level? It’s time to refocus on hiring a new wave of sales managers. New skill sets not just deal makers but a jack of all trades.

The CRM is a critical component to your success and everyone needs to know how to use it. Yet, why are most dealerships falling short here?

Are your sales managers in the 21st Century?

Jennifer Suzuki is the Founder and President of e-Dealer Solutions, Inc., an award-winning training company that focuses on improving salespeople’s phone skills and email compositions, as well as daily operating processes. She is an active writer and blogger and can be reached at Jennifer@edealersolution.com / 800.625.1590.

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TIADA DeAler AcADemy 2013

Dealer 101: Nobody Told Me That!

This class is designed for those dealers new to the business, those considering opening their own dealership, new employees, family members or anyone else needing a refresher on the basics. We’ll cover everything you need to know to run a clean, compliant used car dealership in Texas. Topics include:

Transferring Titles Inspections, Emissions, Green Slip Garage Liability & Dealer Bond Odometers Title & Registration Fees Acquiring Inventory Temp Tags & Metal Dealer Plates Requirements for Maintaining Dealer License The Buyer’s Guide - As Is

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8:30am - 5:00pm $149 Per Registrant

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SOLD! The Deal Jacket Record Keeping Motor Vehicle Sales Tax Vehicle Inventory Tax Consignment Online Sales Out of State / Out of Country OCCC: the MVSF License Advertising Rules Federal Requirements Forms Review Resources

We will build a deal jacket from scratch... we will role-play an actual of transfer of title at the tax office... we will do a simulation of VIT calculation, with real numbers over multiple years... and much more.

TIADA teaches you the business from an experienced, practical point of view.

Presenters will include:

Dorothy Starr, Motor Vehicle Manager, Tarrant County Tax Assessor-Collector Danny Langfield, Deputy Director, TIADA Michael W. Dunagan, attorney, Jameson & Dunagan, TIADA General Counsel

Monday, June 17, 2013

Sponsored by:

Dallas, Texas DoubletTree Dallas Market Center 2015 Market Center Blvd. | Dallas, TX 75207 214.741.7481

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.carsplussoftware.com

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regulation matters

H

What Goes Up...

Is Probably a Violation (and Other Thoughts)

by Danny

Langfield

ere at the TIADA state office, we had a couple of calls around the beginning of April that got me to thinking, “Maybe I ought to put something in Regulation Matters about cash price vs. credit price.”

With the names changed to protect the innocent, the calls went something like this: Skippy’s Used Cars: “Hello, Danny? Want to make sure we are okay on something here...”

Me: “I do not like the sound of that. Stop speaking at once and go throw yourself at the mercy of the nearest state regulator you can find.”

Skippy: “What?”

Me: “Nevermind. What is your question?”

Skippy: “Well, it’s like this, see... I have this FRIEND, and he wanted to make sure if he advertised a cash price for a car, but a customer came in and wanted to finance that car, that my FRIEND was okay raising the price... cause now it’s a finance deal, see..?”

Me: “Yes, I see.”

TIADA DEPUTY DIRECTOR

At that point it was necessary to share with “Skippy” that the pricing elevator only has one acceptable button: down.

Skippy: “So we’re all... I mean, HE’S all good then?”

Me: “No.” Skippy: (crestfallen): “No?” Me: “No.” Skippy: (wailing): “But why? WHY WHY WHY??”

At that point it was necessary to share with “Skippy” that the pricing elevator only has one acceptable button: down. For example, it is permissible to offer a vehicle for sale at $12,995 and then offer a customer a discount for paying cash; however, it is NOT acceptable to offer a vehicle for sale for $10,995 and then increase the price as a condition of financing. That is a very big no-no that can get you in hot water with the OCCC.

Other Thoughts

Finance Company “Buy” Fees

In some instances a third party finance entity will charge the dealer a fee to buy a contract. The OCCC 16

takes the position that this is a cost to the dealer and this fee may not be passed on to the customer.

Just When We Got it All Figured Out

Some readers may recall that last legislative session a bill was passed requiring fresh registration to be issued on every vehicle sold by a dealer. This caused some grumblings amongst BHPH dealers, but did have the effect of simplifying the title and registration fee calculation process, which had for years been very confusing. Now that this simplification has occurred, it appears there may be another change coming. As explained by TxDMV, HB 2875 would essentially have the effect of requiring fresh inspection on most vehicles sold by dealers. Only vehicles which had been inspected in the 90 day period preceding the title application date would not require a new inspection. As we currently understand it, half the inspection fee would be paid at the inspection station, and half would be T e x a s

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May 2013

remitted with the title application. As is currently the case, the entire inspection fee would be an allowable pass-through to the buyer.

This bill was heard in the House Transportation committee on April 2nd and was left pending in committee at press time. Keep tabs on this bill and all the legislation we are tracking through the Legislative Action Center at www.txiada.com.

in the last several months. We recently contacted the Comptroller’s office to see if they would be willing to present a session at our upcoming Annual Conference (July 28-31). They welcomed the opportunity and agreed to help give our dealer members out there a little bit better idea of what they are looking for, the taxability issues dealers face, and what dealers can do to stay compliant.

Contacting your Customers Via Text and Email

The rumor mill has been working overtime on this question, with dealers claiming they heard “this” and they heard “that” attributable to every “reliable source” from a national conference speaker to the curbstoner on the corner. So, under what circumstances may you text your customer without a written consent? How about email?

We are out to the biggest-brained lawyers and regulators we can find to get a clear answer to these questions.

When we do, you’ll be the first to know.

Comptroller Audits

Based on the large volume of calls we’ve had on comptroller auditors in dealerships, it appears this agency has been out in force

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feature Six Essential Elements to

Monitoring Lead Handling

by Joe Webb Founder, DealerKnows

{Editor’s Note: Joe will be a featured presenter at the 2013 TIADA Annual Conference & Expo}

T

he old adage “You can lead a horse to water, but you can’t make them drink” is never more prevalent than when it comes to training.

We at DealerKnows see salespeople and Internet specialists given many resources to improve their performance, from the best technology to continuous training.

However, even with all of the tools provided, that does not guarantee that people will do everything that is being asked of them. Most need ongoing reinforcement.

Ongoing reinforcement doesn’t mean more training or more tools, but, instead, more (read: better) management.

One area we see dealers falling short: handling their Internet leads.

The reason management doesn’t know how to improve lead management is because few know what they should be looking for.

How quick your prospects are contacted back is one of the most statistically critical elements to handling leads.

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Since much of our time is spent monitoring and coaching lead handling as it is one of our primary

services, we’ve identified six segments necessary to ensure quality lead management is being conducted by dealership staff. Here are six key elements you should be reviewing on every lead to ensure a consistent follow-up approach.

Timing

How quick your prospects are contacted back is one of the most statistically critical elements to handling leads. How fast does your team respond on-hours?

By phone? By email? If four hours is industry average and most dedicated dealers obtain a one-hour response time, is it possible to have your team execute the same response back in 15 minutes?

Recognize that the time intervals of follow-up, initially and ongoing, are imperative to Internet success.

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Content

What message are they sending to their prospects? Are their emails answering the customers’ questions? Does it include requested pricing and information regarding availability and incentives as it should? What about multiple pricing options or alternative vehicles? Know what your team is sending out.

Value

scheduled to truly contact a high percentage of interested shoppers.

Results

Is your team setting appointments at a reasonable rate? At what percentage do those customers show for their appointments? Of those that show, how many of them are converting to a sale? Without measuring the results, there is little way to adjust strategies to improve the outcome. You must know what

Is your Internet team clearly defining what separates you from the dealer down the street? Are you explaining to customers why they should choose you over your competitors? Ensure your staff is sending out some semblance of a value proposition so prospects can weigh the benefits of your store in comparison to the others.

Engagement

Are Internet prospects responding back to your email templates and calls?

Is your Internet Sales Manager engaging them in conversation? Are they asking questions to create a dialogue or is every outbound email in monologue form? No great relationship can be built without a conversation.

Effort

How much effort is your team exerting to contact a customer? Are they following up multiple times ongoing? We have found that dealer staff traditionally spend no more than the first four days attempting to reach a customer before ceasing phone efforts. You must have ongoing phone and email follow-up May 2013

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metrics you are achieving to pinpoint what weaknesses need to be addressed in your follow-up tactics.

To truly “manage” your team, you must hold them accountable and monitor their daily duties. These are the six key elements that your management team (or Internet Director) should be actively reviewing on leads to ensure that your Internet prospects are receiving the attention and communication they deserve.

If they can’t do it, find someone else who can do this for you. Otherwise, you’re simply wasting opportunities to sell a car.

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Registration available at www.TiadaAnnualConference.com www.facebook.com/TiadaAnnualConference

KEYNOTE SPEAKERS THE CAR BUSINESS: 10 THINGS IT TOOK ME 20 YEARS TO LEARN Ingram Walters • You made it through the recession; stand up and holler!

• The Hybrid Model: Subprime meets BHPH • Regulation…don’t get me started • The Three I’s: Insurance, Immigration & ID’s

INVISIBLE: HOW TO SELL, SERVE & STAND OUT IN A DIGITAL WORLD T. Scott Gross • How the ‘Millennial Mantra’: My way. Right away.

Why pay? will impact your business • Why you might be thinking too big when it comes to building your brand • What you can do to turn your customer service into positively outrageous service

EDUCATION SESSIONS TO INCLUDE …

Selling in the 21st Century Jennifer Suzuki, E-DealerSolutions

Do you and your people have the ROCKIN’ sales skill set energy and humor, Jennifer will show you what that skill set looks like and how to hire the people that have it. Plus: training your current team with ROCKIN’ phone, email and social media sales skills that will help you close more deals.

Structuring Your Business to Protect Your Assets Larry Oxenham, American Society for Asset Protection

and the IRS are long since over. Lawsuit protection, tax reduction and estate planning are key to your dealership’s suit protection and prevention; reduce liability insurance costs; minimize taxes; and create a successful estate and business succession plan.

Turning Prospects Into Customers: Joe Webb, DealerKnows

A Conference Destination for the Whole Family Education & networking for you, and a great family vacation for them. TIADA has arranged a discounted rate of $159/ night for attendees at the spectacular Hyatt Regency Hill Country Resort & Spa. Call 888.421.1442 for reservations.

Five Acre Waterpark River, or get in on the adrenaline action with two brand-new attractions debuting this year: a 22 foot Tower Slide and the incredible FlowRider Wave Machine.

World-Class Golf*

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to maximize the opportunities that present themselves dealership through your correspondence with your prospects, as well as how to improve the quality of initial engagement and follow-up. Best of all, you will learn how to manage your people to do the same.

Here Comes the Judge How to Handle a Notice of Hearing from TxDMV Bill Harbeson, TxDMV

TxDMV Enforcement Director Bill Harbeson will walk

10 most common dealer compliance issues and what you can do to avoid them.

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Located right across the road from the Hyatt, SeaWorld now features Aquatica, an awesome new waterpark.

Rejuvenate your body and refresh your soul at this beautiful spa located on the grounds of the Hyatt. * Conference registrants and their guests receive a 25% discount on golf and spa services.

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Alliance Inspection Management n Auction123.com n AUL Corp. n Automotive Finance Corporation (AFC) AutoRevo n AutoZone n AutoZoom n Berkshire Risk Services n Cadence Insurance n CARFAX n CARS Protection Plus Centrus Auto Finance n Chase Auto Finance n Copart Auto Auction n DealersLink Inc. n Excel Finance Co. n Floorplan Xpress LLC GO Financial n ION-GPS n Lane Gorman Trubitt PLLC n McNutt Automotive Logistics n Mullen Insurance Agency, Inc. n NCM Associates PassTime n Protective Asset Protection n Shilson, Goldberg, Cheung & Associates, LLP n Sigma Payment Processing Strategic Dealer Services

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Specialty Sponsors ACE Morning News: Collateral Protection Insurance Agency Hotel Key Card: ADESA, Inc. n Lanyard: AutoStar Solutions, Inc.

Sponsorship & Exhibiting Opportunities Are Still Available. CONTACT: Patty Huber patty.huber@txiada.com / 512.310.9795 May 2013

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2013 TIADA ANNUAL CONFERENCE & EXPO July 28-31 San Antonio, Texas ANNUAL CONFERENCE REGISTRATION

{ Online Registration NOW AVAILABLE at www.tiadaannualconference.com } Please complete this form and return it with payment in full to: TIADA / P.O. Box 127 / Round Rock, TX 78680-0127.

If paying by credit card, please fax this form to 512.244.6218.

PLEASE PRINT OR TYPE NAME

NAME ON BADGE

COMPANY NAME

PHONE

EMAIL

FAX

MAILING ADDRESS CITY

STATE

ZIP

SPOUSE / GUEST / CHILD NAME

SPOUSE / GUEST / CHILD NAME

SPOUSE / GUEST / CHILD NAME

SPOUSE / GUEST / CHILD NAME

Dealer Member Pricing

Payment Information

EARLY BIRD MEMBER REGISTRATION (on or before 6/28) 1st Registrant $495 = $______

CHECK APPROPRIATE PAYMENT METHOD: Enclosed is my check for $________ made payable to TIADA.

2nd Registrant

TIADA is hereby authorized to execute payment to the following credit card:

3rd & additional Registrants

$395

= $______

______ x $295

= $______

STANDARD MEMBER REGISTRATION (after 6/28) 1st Registrant

$595

= $______

2nd Registrant

$495

= $______

3rd & additional Registrants

______ x $395

= $______

OTHER Non-member Registration Family Members / Guests

______ x $795 ______ x $75

= $______ = $______

______ x $0 SUB-TOTAL

= $______ = $______

(include children 10 and older)

Children Under 10

Ticketed Events Presidential Awards Dinner ______ x $0 Presidential Awards Dinner(under 10) ______ x $0 Farewell Breakfast (Wed. 7/31) ______ x $0 GRAND TOTAL

= $______ = $______ = $______ = $ __________

r FIRST TIME ATTENDEE Due to contractual obligations, no refunds will be given for any reason after July 13, 2012.

For special meal requirements, please contact TIADA.

r AmEx r Discover

r Visa

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NAME ON CARD BILLING ADDRESS CITY

STATE

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SIGNATURE CREDIT CARD NUMBER

EXP DATE

HOtEL AccOmmOdAtIONs:

The Hyatt Regency Hill Country Resort has discounted rooms available at $159/night/tax for TIADA Conference attendees. Please contact the hotel directly for room reservations:

Hyatt Regency Hill Country Resort 9800 Hyatt Resort Drive / San Antonio, TX 78251 Room Reservations: 888.421.1442

Rooms must be reserved on or before June 28 in order to secure the special rate.

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Ron Janbash Before we started our line of credit with Spartan Financial, we would have to go to a completely different company when we wanted to sell our contracts. We had to start from scratch with diligence and they would want to call every customer to inspect the deal. Not only did it take a long time, but it spooked our customers.

Spartan Financial is totally different. They do our line of credit and buy our contracts, so when I get ready to sell, they have all the information in house. No hassle. No waiting.

I have quick and easy access to cash in days, not weeks. And best of all, they treat my customers as great as I do.

They have a deep understanding of the BHPH business and can relate to the dealers. That comes through in everything they do. I would call them a friend as well as a great company.

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Please Welcome Our Newest TIADA Members NEW DEALER MEMBERS 210 Auto Center Julia Arguello PO Box 241357 San Antonio, TX 78224 Affordable Auto Sales Nabil Issa 421 Valley Hi Dr San Antonio, TX 78227 Budget Autos Foy Campbell PO Box 1391 Marble Falls, TX 78654 BZ Motors Matt Burt 2133 Westfalian Trl Austin, TX 78732

Linares Auto Center Jorge Aldape 2019 W. Hwy 83 McAllen, TX 78501 Midway Auto Group Sean Amir 15300 Midway Road Addison, TX 75001 No Credit Auto Guys John Patton PO Box 260154 Plano, TX 75026 North Texas Truck Stop Kevin McCary 8321 Rendon Bloodworth Rd Mansfield, TX 76063 R T R Motors Randy Ransom 308 S Moody Victoria, TX 77901

Cartac Omar Alaour 732 E. Hwy 121 Lewisville, TX 75057

Dallas Pre-Owned Auto Group Ray Chorfi 3404 Wiley Post Road Carrolton, TX 75006 G-Town Motors, LLC Ismail Ghamrawi PO Box 262706 Plano, TX 75026

AutoZone Wendy Ragle 123 S. Front Street Memphis, TN 38103 Belton Auto Auction Aaron Tucker 212 E Loop 121 Belton, TX 76513

Pattillo, Brown & Hill, LLP Cody Sulak 401 West Hwy 6 Waco, TX 76710 Sigma Payment Processing Susan Perlmutter 1300 Summit Ave., Suite 800 Ft Worth, TX 76102

Cornwell Jackson Derek Northup 4975 Preston Park Blvd #400 Plano, TX 75093

Real Auto Sales Mark Walker 4150 Second Avenue Dallas, TX 75210 Rev2 Keith Askew 618 Blythe Rd Van Alstyne, TX 75495

Hills Auto Ranch Rick Hill 1410 S First Street Lufkin, TX 75901

South Park Sales Mario Hernandez 1901 San Dario Ave. PO Box 440602 Laredo, TX 78040

Hodges Auto Sales Robert Hodges 1400 E Wise Bowie, TX 76230

Texacar Mohammed Rizwan 4045 Forest Lane Garland, TX 75042

Jackson Motors Used Cars Clay Jackson 2035 Rigsby Ave. San Antonio, TX 78210

Triple R Motors Inc Tony Rohan PO Box 614 Yoakum, TX 77995

L & E Enterprises John Gaston P.O. Box 828 203 W. Royall Blvd.

Malakoff, TX 75148

Young’s Enterprise Stephen Young 2307 SH 249 Houston, TX 77038

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Alliance Inspection Management Ryan Degner 330 Golden Shore #400 Long Beach, CA 90802

Dealerslink Santos Goicoechea 11001 West 120th Ave., Suite 400 Broomfield, CO 80021

RD Affordable Foreign Auto Repair Rodney Ware 11005 Bissonnet Houston, TX 77099

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fines& violations

FINAL ORDERS for January 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.

11-1298 ENF Sturgeon Auto Mart Inc. DBA Sturgeon Auto Mart Inc. Misuse of buyer temporary E-tag. Failure to remain actively engaged in business as a motor vehicle dealer by failing to sell at least five (5) vehicles in a 12 month period.

Failure to maintain complete records by licensed dealer or auction. $1,000.00 and attend a Dealer Training Seminar.

12-1043 ENF Nicholas Lusk DBA Executive Auto Broker/Dealers Sold or offered to sell a motor vehicle at an unlicensed location. Failure to timely transfer title and pay sales tax. Failure to timely transfer title to out of state purchaser. Sold a motor vehicle without certificate of title or title receipt. $750.00 and attend a Dealer Training Seminar.

11-1357 ENF Giles Motors Inc., DBA Giles Motors Inc. Failure to comply with a Final Order. Cease and desist.

12-1117 ENF Bruce Heydarian, DBA Jefferson Auto Sales Misuse of buyer temporary E-tag. Attend a Dealer Training Seminar.

13-0006 ENF I Tow Services, Inc., DBA I Tow Services Failed to take assignment of evidence of ownership for all vehicles acquired by dealer. Defrauded purchaser. Failure to timely transfer title and pay sales tax. $500.00 and attend a Dealer Training Seminar.

12-0181 ENF Champion Autoplex LLC DBA Champion Autoplex LLC Failure to remove Texas plates. Failure to timely transfer title and pay sales tax. $500.00.

12-1369 ENF Cuarzo Co Inc., DBA Super Auto Plus Failure to display buyer’s guide. Failure to remove Texas plates. Failure to maintain complete records by licensed dealer or auction.

Failure to observe right of way. $1,000.00 and attend a Dealer Training Seminar.

13-0017 ENF Teus, LLC, DBA Teus Failure to display buyer’s guide. Failure to maintain complete records by licensed dealer or auction. Failure to timely transfer title and pay sales tax. $250.00 and attend a Dealer Training Seminar.

12-1547 ENF PBR, Inc., DBA Buckner-Chariot Auto Sales Failure to timely transfer title and pay sales tax. Sold a motor vehicle without certificate of title or title receipt. $500.00.

13-0053 ENF Charlene M. Connolly, DBA Cash Cars Failure to timely transfer title and pay sales tax. Attend a Dealer Training Seminar.

12-1689 ENF Rollston - Banks LLC, DBA Car Biz Failure to timely transfer title and pay sales tax. Failure to allow purchaser to select county for registration. $1,000.00.

13-0068 ENF HBG Enterprises, Inc. DBA Garcia Motors, Garcia Motors #2 Failure to timely transfer title and pay sales tax. $500.00.

12-0289 ENF Jordan Car Wash, Inc., DBA Jordan Auto Sales Failure to maintain complete records by licensed dealer or auction. Failure to allow purchaser to select county for registration. $500.00 and attend a Dealer Training Seminar.

12-0608 ENF Emilio Garcia, DBA Broudes Auto Sales Failure to display buyer’s guide. Filed a false title and tax document. Failure to timely transfer title and pay sales tax. $750.00 and attend a Dealer Training Seminar.

12-1709 ENF David Haroun Nichols, DBA Apex Auto Sales Misuse of buyer temporary E-tag. Failure to timely transfer title and pay sales tax. Failure to allow purchaser to select county for registration. $500.00.

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fines& violations 13-0082 ENF Autobahn Imports LP DBA Autobahn Motorcars Failure to timely transfer title and pay sales tax. $500.00.

13-0116 ENF Kevin R. Godsey, DBA Godsey Autoplex Misuse of buyer temporary E-tag. Failure to maintain complete records by licensed dealer or auction. Failure to timely transfer title and pay sales tax. $4,000.00.

13-0123 ENF Live Oak RV Sales, LLC DBA Live Oak RV Sales, LLC Sold a motor vehicle without certificate of title or title receipt. $500.00 and attend a Dealer Training Seminar.

13-0141 ENF Randall William Ellis, DBA Car King Misuse of buyer temporary E-tag. Failure to maintain complete records by licensed dealer or auction. Failure to timely transfer title and pay sales tax. $1,000.00 and attend a Dealer Training Seminar.

13-0142 ENF Sonterra Auto Group LLC DBA sonterraauto.com Advertised the amount of down payment in connection with a credit transaction without including the terms of repayment. $500.00 and attend a Dealer Training Seminar.

13-0144 ENF South Credit Motors, Inc. DBA South Credit Motors, Inc. Failure to timely transfer title and pay sales tax. Failure to maintain complete records by licensed dealer or auction. $500.00 and attend a Dealer Training Seminar.

13-0146 ENF Zachary Neal Grier, DBA A-Affordable Autos Misuse of buyer temporary E-tag. Failure to timely transfer title and pay sales tax. $500.00 and attend a Dealer Training Seminar.

13-0167 ENF Alma Castilla, DBA Three Brothers Auto Sales Failure to timely transfer title and pay sales tax. $250.00 and attend a Dealer Training Seminar.

13-0178 ENF Devon Nicholas Luna DBA Pioneer Auto Finance Failure to maintain complete records by licensed dealer or auction. Sold or offered

to sell motor vehicles without the appropriate license for that type of motor vehicle.

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

13-0189 ENF Incite Dealer Services, Inc. DBA The Republic Auto Group Failure to maintain complete records by licensed dealer or auction. Failure to timely transfer title and pay sales tax. $500.00 and attend a Dealer Training Seminar.

13-0192 ENF Tytal USA, Inc., DBA Tytal USA, Inc. Sold or offered to sell a motor vehicle at an unlicensed location. $1,000.00 and attend a Dealer Training Seminar.

13-0193 ENF Michael Manuel Damm, DBA Damm Cars Failure to timely transfer title and pay sales tax. $750.00 and attend a Dealer Training Seminar.

13-0194 ENF A & A Motors, Inc., DBA A & A Motors, Inc. Failure to produce records within (15) days. Failure to timely transfer title and pay sales tax. $500.00 and attend a Dealer Training Seminar.

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

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D e a l e r

May 2013

13-0215 ENF Framsco, Inc., DBA Wildcat Motors Advertised the amount of down payment in connection with a credit transaction without including the terms of repayment. $500.00 and attend a Dealer Training Seminar.

13-0291 ENF Art Castanon, DBA A & R Motors Failure to maintain complete records by licensed dealer or auction. Failure to timely transfer title and pay sales tax. $500.00 and attend a Dealer Training Seminar.

13-0183 ENF Dionicio Gomez, DBA D G Motors Sold or offered to sell a motor vehicle at an unlicensed location. $200.00.

13-0229 ENF Auto Plex Auto Sales & Financing Inc. DBA Auto Plex USA Failure to display buyer’s guide. Failure to remove Texas plates. Failure to maintain complete records by licensed dealer or auction. $250.00.

13-0230 ENF Business 83 Auto Sales LLC DBA Business 83 Auto Sales LLC Failure to display buyer’s guide. $100.00.

May 2013

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13-0237 ENF Lithia DMID DBA All American Chrysler Jeep Dodge Failure to remove Texas plates. $50.00.

13-0238 ENF Abdolhamid Vatankhah DBA Unlimited Auto Sales Failure to display buyer’s guide. Failure to remove Texas plates. $150.00.

13-0263 ENF Armando Padron / Erika Padron DBA A & V Motors Failure to display buyer’s guide. Failure to meet premises requirement(s). $200.00.

13-0264 ENF Oscar Rios, DBA E-Z Motors Failure to remove Texas plates. Failure to meet premises requirement(s). $150.00.

13-0265 ENF Cesar Cepeda, DBA C & I Auto Sales Failure to remove Texas plates. Failure to observe right of way. $150.00.

13-0297 ENF Massey Automotive LP DBA Mack Massey Chrysler Jeep Dodge Failure to remove Texas plates. Failure to maintain complete records by licensed dealer or auction. $150.00.

13-0299 ENF Luciano Tamayo, DBA El Mexicano Auto Sales Failure to remove Texas plates. No metal dealer plate record. $150.00.

13-0300 ENF Retama Enterprises Inc., DBA Auto Credit Failure to remove Texas plates. $50.00.

13-0303 ENF Virgilio Lozada DBA Francia Motors Failure to remove Texas plates. $50.00.

13-0327 ENF Maria Perea Rivera DBA Isaac’s Motors Failure to display buyer’s guide. Failure to remove Texas plates. $150.00.

13-0266 ENF R. Garza Motors II Inc. DBA R. Garza Motors II Inc. Failure to remove Texas plates. Failure to observe right of way. No metal dealer plate record. $250.00.

31

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legal corner Is That Car For Sale?

by Michael

T

o most dealers, the answer to the question “is that car for sale?” is quite simple. “Every car here is for sale” is the most obvious response, and the response that may lead to a significant fine.

Several years ago, a salesman for a Dallas dealer gave that answer and it cost the dealer a $20,000 fine and ultimately put him out of business.

Unfortunately for the Dallas dealer, the question was posed by an agent of the Federal Trade Commission.

The agent had noticed several cars without the required FTC Buyers Guides, and, pretending to be an interested buyer, asked the nearest available employee of the dealer whether he could buy a particular car.

Eager to make a sale, the salesman proceeded to preach about the virtues of that vehicle, even though it didn’t display the FTC sticker. That was enough to trigger prosecution for violation of the FTC Used Car Rule.

The dealer later protested that the car in question was among several that had just been brought onto his lot, but had not

yet received the customary prep work, which included filling out the disclosure statement. Most dealers have trade-ins, repossessions, and recent purchases sitting on the lot

“Every car here is for sale” is the most obvious response, and the response that may lead to a significant fine.

May 2013

T e x a s

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at any given time that haven’t been properly prepared for sale. But this argument fell on deaf ears of federal

W. Dunagan

TIADA GENERAL COUNSEL

regulators who used the salesman’s simple response that all cars on the lot were for sale to deny the dealer’s defense.

More recently, the FTC’s Southwest Region performed a well-publicized survey of compliance with the Buyers Guide requirements in the Jonesboro, Arkansas area. Ten dealers were found to be properly displaying the guides on “all or nearly all” of the used cars offered for sale on their lots. Eight dealers surveyed didn’t have Buyers Guides on most or all of their cars, and three dealers failed to have Buyers Guides on “a significant number” of their cars. As a result of 33

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the survey, the FTC sent warning letters to 11 dealers requiring them to come into compliance by properly displaying guides in clear and conspicuous locations on all used cars offered for sale.

The lesson here is straight-forward. If a dealer offers used vehicles for sale to non-dealers, the dealer must display FTC disclosure forms on all vehicles offered for sale. Dealers who are primarily wholesalers, but who are happy to make a retail sale to anyone who offers the right price, are prime candidates for prosecution if they fail to post guides on all vehicles on their lots. To qualify for a wholesale exemption from the FTC requirement, a dealer must make it clear that sales will only be made to other dealers, and retail purchasers would be turned away.

The idea behind the Buyers Guide is that a potential used car buyer would be informed of whether or not a warranty would be given, and if so, what the warranty covers. The posting requirement is intended to give a shopper the information before the purchase decision is made.

(As a historical aside, the originally proposed rule would have required the checking of “OK” or “Not OK” on a lengthy list of vehicle

components that appeared on the proposed guide. An extensive lobbying campaign by dealer associations, including TIADA, that went all the way to the halls of Congress resulted in the less-constrictive current disclosure requirement.)

There have been rumors floating

Dealers should not be lulled into thinking that they are no longer required to display Buyers Guides just because other dealers around them are not in compliance.

FOUND IT.

around that the Buyers Guides are no longer required. These rumors have been possibly reinforced by a perceived lack of enforcement in the past and the fact that the rule is currently being revisited to determine, among other things, if it really offers protection to consumers. Dealers should not be lulled into thinking that they are no longer required to display Buyers Guides just because other dealers around them are not in compliance. Dealers should also

not fall into the “nobody does it” trap, falsely relying on the lack of compliance by other dealers to justify not following the law.

As if to help dispel such rumors, the Director of the FTC’s Southwest region issued a statement about the Jonesboro inspections, declaring that “we believe these rule requirements are important to consumers in determining to purchase a used car.” And, in fact, the FTC has issued proposed changes to the rule which would retain the Buyers Guide requirement. The proposed amendments have been under consideration, while comments were sought from interested parties, and should be finalized in the near future.

According to FTC statistics, about 80 actions have been taken against dealers since 1985, with more than $1 million in civil penalties being assessed. In addition to the FTC, local and state governments have been jumping on the enforcement bandwagon. The Texas Motor Vehicle Division, as part of its dealer audits, routinely writes up violations of the rule. The failure to display Buyers Guides has been one of the highest ranking categories of violation in terms of numbers. A review of the MVD violation reports that appeared in the March, 2013 edition of this magazine reflected that 13 of the 49 violations reports

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May 2013

T e x a s

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35

involved failure to display Buyers Guides.

When I perform on-premise compliance audits for dealers, I find that most dealers are attempting to comply, but usually fall short of 100 percent compliance simply because of the difficulty of keeping up with all vehicles that arrive on the lot (keep in mind that the dealers who go to the expense of such audits are usually the ones that are already at the top of the compliance heap). I have recommended to those having a hard time achieving 100 per cent compliance that they designate a “not for sale” area in which newlyarrived vehicles are placed before Buyers Guides are affixed, and where repossessed units are kept pending disposition.

To recap the requirements of the current rule, dealers are required to post properly filled-out Buyers Guides on all cars offered for sale to consumers. The original version of the rule required posting the guides on a side window (thus, the “FTC window sticker” name that was so common for many years). The rule has been liberalized to now require that guides be displayed in a “clear and conspicuous” location on vehicles without specifying a particular place. The rule also requires that all consumer retail contracts contain specific language that makes the disclosures on Buyers Guides part of the contract between the parties.

A copy of the Buyers Guide must be given to the retail buyer prior to consummation of the sale.

If negotiations for the sale take place in Spanish, a Spanish language version of the Buyers Guide must be given. The FTC has recently changed the wording of the Spanish translation language to make it more understandable and has made use of the new forms mandatory as soon as current inventories are used up. The new Spanish translations are available on Buyers Guides from Burrell Printing.

Simply posting a Buyers Guide 36

is not enough if the form is not properly filled out. The primary information is a statement of whether a warranty is being offered, or the vehicle is being sold “as is.” If a warranty is given, a summary of the provisions of what is covered, and what is excluded should be given.

Detailed guidance on how to fill out the disclosure portions of the Buyers Guide, with examples, can be found at http://business.ftc.gov/ documents/bus13-dealers-guideused-car-rule. Dealers who violate the FTC rule are subject to penalties of up to $16,000 per violation. Each car without a buyer’s guide or with a buyer’s guide that is not properly filled out is considered to be a separate violation.

An important consideration in complying with the FTC rule is the training and education of staff, with proper emphasis placed on the importance of the use of the Buyers Guide. Also, employees should be instructed on the proper way to answer the question: “Is that vehicle for sale?”

Michael W. Dunagan is an attorney in Dallas, Texas who has represented the Texas Independent Automobile Dealers Association for over 36 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.

T e x a s

D e a l e r

May 2013

behind the wheel TxDMV Chairman Leaves a Legacy of Success & Respect

A

bout seven years ago I met a man that changed your life — Victor Vandergriff. He was not only the Chair of the Texas Department of Motor Vehicles Board for the last four years, he was the catalyst in forming the agency from its inception.

Most dealers are familiar with House Bill 3097 that passed in the 81st legislative session and was signed into law by Governor Rick Perry creating TxDMV. What most dealers may not know is the many twists, turns, trials and tribulations that had to be overcome to get us where we are today. There was Sunset for the Texas Department of Transportation (TxDOT). Sunset is a complete review of a state agency by legislators. All the stakeholders were involved in the process, including TIADA, but Mr. Vandergriff was clearly the champion for needed change.

On the heels of Sunset came a work group appointed by the Governor to study the idea of creating an agency by carving various industries out of TxDOT. Mr. Vandergriff was asked to pull in all the stakeholders and chair that workgroup. After several months of meetings the workgroup produced a report calling for a new agency. Then came the 81st legislative session, HB 3097 and all the negotiating that created TxDMV. After the bill passed the arduous task of creating a new agency was laid before Texas. The bill called for a nine member board to oversee this project and it was no surprise when he was appointed to the board and that the Governor promptly made him Chairman Vandergriff.

From the outset Chairman Vandergriff led with a clear mission that called for a more customer-driven TxDMV. An agency that would work more closely with the industries they regulate and be more responsive to the customers they serve. He and other board members

38

by Jeff

Martin

TIADA EXECUTIVE DIRECTOR

traveled around the state asking for stakeholder input and working to address consumer concerns. Changing the culture of a state agency is difficult, and it doesn’t happen overnight. To do it, you must show a steady hand of leadership. That leadership includes surrounding yourself with a great team of talented individuals that support your vision as well as constantly asking for input and encouraging stakeholders to be involved.

But it can happen, and it has happened. I can’t think of a better way to show my respect to Chairman Vandergriff than to share an email that was forwarded to me from one of our members after dealing with TxDMV. Our dealer member contacted the agency to inquire about an amendment application. I won’t bore you with the details but the dealer forwarded the email exchange to me with a message that said, “See the email below. This is a dream come true. Wow, what customer service.”

Our friend Victor Vandergriff has now been called on by the Governor to serve as a TxDOT Commissioner and has stepped down as the first TxDMV Chairman.

However, he has created a foundation that we as stakeholders can build on and he has set an example of leadership that proves state agencies and Texas industry can — and should — work together.

I am proud to call Chairman Vandergriff my friend and have had the privilege of introducing him on a few occasions over the past couple years. I always use the same line: When it comes to HB 3097 and the creation of TxDMV, as well as the positive changes, many people take credit, many people get credit but one person actually deserves credit – Victor Vandergriff.

On behalf of the independent dealers across Texas, good luck and thanks for your leadership.

T e x a s

D e a l e r

May 2013

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