Texas Dealer February 2022

Also In this issue:

– Michael W. Dunagan on Privacy Rule Requirements (and Exceptions) for Car Creditors – A Modern Dealership’s Approach to Cybersecurity – Recruiting Automotive Technicians in 2022 – The Ultimate Guide for Automotive CRM – Five Ways Your Dealership Might Be Killing Your Employee Retention

Financing Made Simple.

ACV Capital offers short-term inventory financing for buyers to purchase vehicles on our digital marketplace. Our financing product includes straightforward pricing, allowing our customers to know their inventory costs upfront.

• Know your fees upfront; no hidden title, audit, curtailment or Fed-Ex fees • Fee is determined by the amount financed and the term selected • Up to 90-day terms available • Include financing for transportation costs

ACV DEALERS INTERESTED IN LEARNING MORE SHOULD VISIT: ACVAUTO.COM/ACV-CAPITAL

TIADA Board of Directors PRESIDENT Mark Jones/MCMC Corporate 264 Exchange Burleson, TX 76028 PRESIDENT ELECT Ryan Winkelmann/BJ’s Autohaus 5005 Telephone Road Houston, TX 77087 CHAIRMAN OF THE BOARD Robert Beck/Stop N’ Drive Motors 711 N. General McMullen San Antonio, TX 78228 SECRETARY Eddie Hale/Neighborhood Autos PO Box 1719 Decatur TX 76234 TREASURER Vicki Davis/A-OK Auto Sales 23980 FM 1314 Porter, TX 77365 ICE PRESIDENT, WEST TEXAS V (REGION 1) Cesar Stark/S&S Motors 7699 Alameda Ave. El Paso, TX 77915 ICE PRESIDENT, FORT WORTH V (REGION 2) Chad Lancaster/Chacon Autos 11800 E. Northwest Hwy Dallas TX 75218 ICE PRESIDENT, DALLAS V (REGION 3) Greg Reine/Auto Liquidators 39670 LBJ Freeway Dallas TX 75237 ICE PRESIDENT, HOUSTON V (REGION 4) Russell Moore/Top Notch Used Cars 900 East Davis Conroe, TX 77301 ICE PRESIDENT, CENTRAL TEXAS V (REGION 5) Robert Blankenship/Texas Auto Center 6809 Suite B S IH35 Austin, TX 78744 ICE PRESIDENT, SOUTH TEXAS V (REGION 6) Armando Villarreal/McAllen Auto Sales, LLC 4215 S. 23rd St McAllen, TX 78503 ICE PRESIDENT AT LARGE V Brad Kalivoda/Fiesta Motors 2599 74th Street Lubbock, TX 79423 ICE PRESIDENT AT LARGE V Greg Phea/Austin Rising Fast 8024 IH 35 North Austin TX 78753 TIADA EXECUTIVE DIRECTOR Jeff Martin 9951 Anderson Mill Rd., Suite 101 Austin, TX 78750 Office Hours M-F 8:30am – 4:30pm 512.244.6060 • Fax 512.244.6218 jeff.martin@txiada.org

Vo l u m e X X I I / I s s u e 2 / Fe b r u a r y 2 0 2 2

TexasDealer 4 Officers’ Message

contents

by Vicki Davis, TIADA Treasurer

8 TIADA Auction Directory 11 Legal Corner: A Review of Privacy Rule Requirements for Car Creditors: Including the All-Important Exceptions

by Michael W. Dunagan

13 Upcoming Events 15 A Modern Dealership’s Approach to Cybersecurity

by Erik Nachbahr

18 TIADA Membership Application 19 Membership Corner 19 Local Chapters 21 How Seasoned Dealers Are Navigating Auctions Today

by Stephen Pallas

24 2022 TIADA Conference & Expo 25 Legislator Spotlight 27 TIADA Scholarship Application 30 On The Cover: The FTC’s Final Rule on Consumer Safeguards Impacts Texas Dealers

by TIADA Staff

32 New Members 33 The Ultimate Guide for Automotive CRM

by Zach Klempf

36 How to Recruit Automotive Technicians Effectively in 2022

by Sara Kerwin

41 T xDMV Collaborates with Law Enforcement to Curtail Unlawful Use of Temporary Vehicle Tags

by Texas Department of Motor Vehicles

43 Stop the Bleeding: Five Ways Your Dealership Might be Killing Your Employee Retention

by Matt Wadiak

46 Behind the Wheel

by Jeff Martin

Did You Know? TIADA is now accepting applications for the Marvin Norwood Scholarship. It is an excellent opportunity for qualifying college students. Turn to page 27 for the application and more details.

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.

Editor: Stephen Pallas

Magazine Ad Sales: Patty Huber, 512-310-9795

officers’ message by

TIADA Steps Up Again

Vicki Davis

A-OK Auto Sales (Porter) TIADA TREASURER

I

t can certainly be frustrating for us dealers when the government creates new rules and regulations that get in the way of efficiently conducting our business. We work hard at our dealership to make sure we are protecting our customers’ information. But recently The Safeguards Rule published a confusing set of updates that dealers must comply with, and it’s bound to cost us time and money.

For starters, every dealer must review their Safeguards Policy and make any adjustments per the new rule. The updated rule also requires every dealer to provide training to employees who handle customer documents. TIADA is currently working on both training programs and manuals that will help lessen the time and energy members will have to spend to stay compliant.

I expect this may be news to most dealers. We would all much rather be selling vehicles than reviewing and

updating policies. In fact, most dealers I talk to are like me. We have sound practices, but we don’t always have a policy manual for every step we take at the dealership.

My point is, the privacy of our customers has always been a top priority at our dealership, and we have a

I am thrilled TIADA is launching a new online, on-demand Safeguards Rule course this month.

4

T e x a s

D e a l e r

February 2022

system in place to ensure that we protect our customers’ information. It’s frustrating to think I have to prove to the government by writing some document that I know my customers information is sensitive and I know how to protect it. But that is the world we live in today, so I will get off my soapbox and tell you a few things we do to protect our customers’ information: We have locking fireproof file

cabinets in a file room to keep our files secure, and only a limited number of employees have access to that room.

The door to the file room has a

locking doorknob, and it must stay closed and locked unless approved employees are in the room.

Physical files must be returned

to the file room if they are not being reviewed. They cannot be left on a desk or taken out of the office.

Employees have been trained

properly, and everyone knows who is authorized to answer questions about accounts on file and what information they can give out over the phone and in-person.

Our computer systems are up dated regularly, so we always have the latest firewalls and antivirus software.

All our employees are trained

in best practices for password creation and told never to share their passwords.

We do not allow employees

to take computers home or store electronic files on their desktop.

We train employees not to have

multiple files open on their computers at one time and never leave electronic file open on their computer screen if they are leaving their desk.

We have a compliance officer

who is responsible for all the ever-changing rules.

February 2022

T e x a s

D e a l e r

Our office manager is also our compliance manger. She regularly attends classes offered by Attorney Michael Dunagan, and she and I go to the compliance classes offered at the TIADA Convention each year.

As frustrated as I am that we have more regulations placed on our dealership, I am thrilled TIADA is launching a new online, on-demand Safeguards Rule Course this month. The new rule requires every dealer to ensure

they and their employees have adequate training on safeguarding customer information. This new course will cost less than 50 bucks and will include sample policies you can use to help you stay compliant.

We do everything we can at our dealership to stay on top of the ever-changing rules and regulations in our industry. I am glad we have TIADA to help us navigate the compliance confusion so we can go sell cars.

.

5

6

T e x a s

D e a l e r

February 2022

L e t Y ou r M emb e rship Pa y ffor or Its Memb ership It s e l f

Save Over $10,000!* Discounts on auctions and much more

Download the TIADA App

Step 1) Search for "TXIADA" Step 2) Download the App Step 3) Create Your Account Step 4) Save Big!

Over 45 45 Over Participating Participating

Auctions in in Texas!

Texas!

Auctions *Couponsrange rangefrom from$75 $75toto$500 $500each each *Coupons onbuy-sell buy-sellfees. fees. on

TIADA Auction Directory

Save thousands on buy or sell fees at these participating auctions! * VALID FOR SELL FEE ONLY AT INSURANCE AA LOCATIONS ** ONLINE AUCTION AVAILABLE

Abilene ALLIANCE AUTO AUCTION ABILENE

www.allianceautoauction.com 6657 US Highway 80 West, Abilene, TX 79605 325.698.4391, Fax 325.691.0263 GM: Brandon Denison Friday, 10:00 a.m.

$AVE : $200

C.M. COMPANY AUCTIONS, INC. www.cmauctions.com

2258 S. Treadaway, Abilene, TX 79602 325.677.3555, Fax 325.677.2209 GM: Gregory Chittum Thursday, 10:00 a.m. $AVE : $200

IAA ABILENE*

www.iaai.com 7700 US 277, Hawley, TX 79601 325.675.0699, Fax 325.675.5073 GM: Shawn Lemke Thursday, 9:30 a.m.

$AVE : up to $200 Sell Fee

Amarillo IAA AMARILLO*

www.iaai.com 11150 S. FM 1541, Amarillo, TX 79118 806.622.1322, Fax 806.622.2678 GM: Shawn Norris Monday, 9:30 a.m.

$AVE : up to $200 Sell Fee

Austin ADESA AUSTIN

www.adesa.com 2108 Ferguson Ln, Austin, TX 78754 512.873.4000, Fax 512.873.4022 GM: Michele Arguijo Tuesday, 9:00 a.m.

$AVE : $200

ALLIANCE AUTO AUCTION AUSTIN

www.iaai.com 2191 Highway 21 West, Dale, TX 78616 512.385.3126, Fax 512.385.1141 GM: Geoffrey Rabb Tuesday, 9:00 a.m.

$AVE : up to $200 Sell Fee

METRO AUTO AUCTION AUSTIN www.metroautoauction.com 8605 Cullen Ln., Austin, TX 78748 512.282.7900, Fax 512.282.8165 GM: Brent Rhodes 3rd Saturday, monthly

$AVE : $200

Corpus Christi CORPUS CHRISTI AUTO AUCTION

www.corpuschristiautoauction.com 2149 IH-69 Access Road, Corpus Christi, TX 78380 361.767.4100, Fax 361.767.9840 GM: Hunter Dunn Friday, 10:00 a.m.

$AVE : $200

IAA CORPUS CHRISTI*

www.iaai.com 4701 Agnes Street, Corpus Christi, TX 78405 361.881.9555, Fax 361.887.8880 GM: Patricia Kohlstrand Wednesday, 9:00 a.m.

$AVE : up to $200 Sell Fee

Dallas-Ft. Worth Metroplex ADESA DALLAS

www.adesa.com 3501 Lancaster-Hutchins Rd., Hutchins, TX 75141 972.225.6000, Fax 972.284.4799 GM: Allan Wilwayco Thursday, 9:30 a.m.

$AVE : $200

ALLIANCE AUTO AUCTION DALLAS

www.allianceautoauction.com 1550 CR 107, Hutto, TX 78634 737.300.6300 GM: Brad Wilson Wednesday, 9:45 a.m.

www.allianceautoauction.com 9426 Lakefield Blvd., Dallas, TX 75220 214.646.3136, Fax 469.828.8225 GM: Robert Kersh Wednesday, 1:30 p.m.

AMERICA’S AA AUSTIN / SAN ANTONIO

AMERICA’S AA DALLAS

$AVE : $200

www.americasautoauction.com 16611 S. IH-35, Buda, TX 78610 512.268.6600, Fax 512.295.6666 GM: Jamie McCollum Tuesday, 1:30 p.m. / Thursday, 2:00 p.m.

$AVE : $200 8

IAA AUSTIN*

$AVE : $200

www.americasautoauction.com 219 N. Loop 12, Irving, TX 75061 972.445.1044, Fax 972.591.2742 GM: Ruben Figueroa Tuesday, 1:00 p.m. / Thursday, 1:00 p.m.

$AVE : $200

IAA DALLAS*

www.iaai.com 204 Mars Rd., Wilmer, TX 75172 972.525.6401, Fax 972.525.6403 GM: Bob Bannister Wednesday, 9:00 a.m.

$AVE : up to $200 Sell Fee

IAA DFW*

www.iaai.com 4226 East Main St., Grand Prairie, TX 75050 972.522.5000, Fax 972.522.5090 GM: Julissa Reyes Tuesday, 9:00 a.m.

$AVE : up to $200 Sell Fee

IAA FORT WORTH NORTH*

www.iaai.com 3748 McPherson Dr., Justin, TX 76247 940.648.5541, Fax 940.648.5543 GM: Jack Panczyk Tuesday, 9:00 a.m.

$AVE : up to $200 Sell Fee

MANHEIM DALLAS**

www.manheim.com 5333 W. Kiest Blvd., Dallas, TX 75236 214.330.1800, Fax 214.339.6347 GM: Rich Curtis Wednesday, 9:00 a.m.

$AVE : $100

MANHEIM DALLAS FORT WORTH**

www.manheim.com 12101 Trinity Blvd., Fort Worth, TX 76040 817.399.4000, Fax 817.399.4251 GM: Nicole Graham-Ponce Thursday, 9:30 a.m.

$AVE : $100

METRO AUTO AUCTION DALLAS

www.metroaa.com 1836 Midway Road, Lewisville, TX 75056 972.492.0900, Fax 972.492.0944 GM: Scott Stalder Tuesday, 9:00 a.m.

$AVE : $200

El Paso EL PASO INDEPENDENT AUTO AUCTION www.epiaa.com 7930 Artcraft Rd, El Paso, TX 79932 915.587.6700, Fax 915.587.6700 GM: Luke Pidgeon Wednesday, 10:00 a.m.

$AVE : $200

IAA EL PASO*

www.iaai.com 14651 Gateway Blvd. W, El Paso, TX 79927 915.852.2489, Fax 915.852.2235 GM: Jorge Resendez Friday, 10:30 a.m.

$AVE : up to $200 Sell Fee T e x a s

D e a l e r

February 2022

MANHEIM EL PASO

www.manheim.com 485 Coates Drive, El Paso, TX 79932 915.833.9333, Fax 915.581.9645 GM: JD Guerrero Thursday, 10:00 a.m.

$AVE : $100

IAA MCALLEN*

www.iaai.com 900 N. Hutto Road, Donna, TX 78537 956.464.8393, Fax 956.464.8510 GM: Ydalia Sandoval Tuesday, 9:00 a.m.

$AVE : up to $200 Sell Fee

BIG VALLEY AUTO AUCTION**

www.bigvalleyaa.com 4315 N. Hutto Road, Donna, TX 78537 956.461.9000, Fax 956.461.9005 GM: Lisa Franz Thursday, 9:30 a.m.

$AVE : $200

Houston ADESA HOUSTON

www.adesa.com 4526 N. Sam Houston, Houston, TX 77086 281.580.1800, Fax 281.580.8030 GM: Brian Wetzel Wednesday, 9:00 a.m.

$AVE : $200

AMERICA’S AA HOUSTON

www.americasautoauction.com 1826 Almeda Genoa Rd, Houston, TX 77047 281.819.3600, Fax 281.819.3601 GM: Ben Nash Thursday, 2:00 p.m.

$AVE : $200

AMERICA’S AA NORTH HOUSTON www.americasautoauction.com 1440 FM 3083, Conroe, TX 77301 936.441.2882, Fax 936.788.2842 GM: Buddy Cheney Tuesday, 1:00 p.m.

$AVE : $200

AUTONATION AUTO AUCTION - HOUSTON www.autonationautoauction.com 608 W. Mitchell Road, Houston, TX 77037 822.905.2622, Fax 281.506.3866 GM: Juan Gallo Friday, 9:30 a.m.

$AVE : $200

HOUSTON AUTO AUCTION

www.houstonautoauction.com 2000 Cavalcade, Houston, TX 77009 713.644.5566, Fax 713.644.0889 President/GM: Tim Bowers Wednesday, 11:00 a.m.

$AVE : $200

IAA HOUSTON*

www.iaai.com 2535 West. Mt. Houston, Houston, TX 77038 281.847.4700, Fax 281.847.4799 GM: Alvin Banks Wednesday, 9:00 a.m.

$AVE : up to $200 Sell Fee

T e x a s

www.iaai.com 16602 East Hardy Rd., Houston-North, TX 77032 281.443.1300, Fax 281.443.4433 GM: Aracelia Palacios Thursday, 9:00 a.m.

$AVE : up to $200 Sell Fee

IAA HOUSTON SOUTH*

Harlingen/McAllen

February 2022

IAA HOUSTON NORTH*

D e a l e r

Midland Odessa IAA PERMIAN BASIN*

www.iaai.com 701 W. 81st Street, Odessa, TX 79764 432.550.7277, Fax 432.366.8725 Thursday, 11:00 a.m.

$AVE : up to $200 Sell Fee

www.iaai.com 2839 E. FM 1462, Rosharon, TX 77583 281.369.1010, Fax 833.595.8398 GM: Adriana Serrano Friday, 9:30 a.m.

ONLINE

MANHEIM HOUSTON

E-DEALERDIRECT**

$AVE : up to $200 Sell Fee

www.manheim.com 14450 West Road, Houston, TX 77041 281.924.5833, Fax 281.890.7953 GM: Brian Walker Tuesday, 9:00 a.m. / Thursday 6:30 p.m.

$AVE : $100

MANHEIM TEXAS HOBBY

www.manheim.com 8215 Kopman Road, Houston, TX 77061 713.649.8233, Fax 713.640.6330 GM: Darren Slack Thursday, 9:00 a.m.

$AVE : $100

Longview ALLIANCE AUTO AUCTION LONGVIEW www.allianceautoauction.com 6000 East Loop 281, Longview, TX 75602 903.212.2955, Fax 903.212.2556 GM: Chris Barille Friday, 10:00 a.m.

$AVE : $200

IAA LONGVIEW*

www.iaai.com 5577 Highway 80 East, Longview, TX 75605 903.553.9248, Fax 903.553.0210 GM: Edgar Chavez Thursday, 9:00 a.m.

$AVE : up to $200 Sell Fee

Lubbock IAA LUBBOCK*

www.iaai.com 5311 N. CR 2000, Lubbock, TX 79415 806.747.5458, Fax 806.747.5472 GM: Chris Foster Tuesday, 9:00 a.m.

$AVE : up to $200 Sell Fee

TEXAS LONE STAR AUTO AUCTION** www.lsaalubbock.com 2706 E. Slaton Road., Lubbock, TX 79404 806.745.6606 GM: Dale Martin Wednesday, 9:30 a.m

ACV AUCTIONS**

www.acvauctions.com 800.553.4070

$AVE : $250

www.e-dealerdirect.com chris@edealerdirect.com

$AVE : Up to $500/month

San Antonio ADESA SAN ANTONIO

www.adesa.com 200 S. Callaghan Rd., San Antonio, TX 78227 210.434.4999, Fax 210.431.0645 GM: Clifton Sprenger Thursday, 10:00 a.m.

$AVE : $200

IAA SAN ANTONIO*

www.iaai.com 11275 S. Zarzamora, San Antonio, TX 78224 210.628.6770, Fax 210.628.6778 GM: Paula Booker Monday, 9:00 a.m.

$AVE : up to $200 Sell Fee

MANHEIM SAN ANTONIO**

www.manheim.com 2042 Ackerman Road San Antonio, TX 78219 210.661.4200, Fax 210.662.3113 GM: Mike Browning Wednesday, 9:00 a.m.

$AVE : $100

SAN ANTONIO AUTO AUCTION**

www.sanantonioautoauction.com 13510 Toepperwein Rd. San Antonio, TX 78233 210.298.5477 GM: Brandon Walston Tuesday, 10:00 a.m. / Thursday, 1:30 p.m.

$AVE : $200

Tyler GREATER TYLER AUTO AUCTION www.greatertyleraa.com 11654 Hwy 64W, Tyler, TX 75704 903.597.2800, Fax 903.597.3848 GM: Wayne Cook Tuesday, 5:00 p.m.

$AVE : $200

$AVE : $75/Quarterly

Waco

Lufkin

ALLIANCE AUTO AUCTION WACO

LUFKIN DEALERS AUTO AUCTION

www.lufkindealers.com 2109 N. John Reddit Dr., Lufkin, TX 75904 936.632.4299, Fax 936.632.4218 GM: Wayne Cook Thursday, 6:00 p.m.

$AVE : $200

www.allianceautoauction.com 15735 I-35 Frontage Road Elm Mott, TX 76640 254.829.0123, Fax 254.829.1298 GM: Christina Thomas Friday, 10:00 a.m.

$AVE : $200

9

nce a r u n In”s o ti c te lution PIA Team o r P eral“The So y the C t a l l “CP Insurance Associates Co ub o y ht to has been providing Buy Here Pay Here Dealers g u o Br

TM

a Custom CPI Program for over 20 years!

INSURANCE MATTERS!!!”

“Now, more than ever, is the time for your Dealership to take control of your property insurance and be prepared for 2022!”

“The only way a BHPH Dealer can be sure there is Insurance that protects his vehicle is with Collateral Protection Insurance!”

Many of the most successful BHPH Dealers utilize the CP Insurance Associates Collateral Protection Program. Why don’t you?

Bill Murphy (512-799-2886)

Bob Burke (800-366-0036)

“Your Collateral Protection Solution”

10

Matt Ruckel (214-529-7624)

Ryan Driggers (214-289-3627)

Insurance Associates TM

T e x a s

Rodrigo Romo (832-928-1654)

(800-366-0036)

D e a l e r

February 2022

legal corner

A Review of Privacy Rule Requirements for Car Creditors: Including the All-Important Exceptions

W

e all get them from time to time. They come with our insurance premium notices, in our bank statements, and in our credit card bills. They are innocent-looking pieces of paper that most likely go right to the trash can. “They” are privacy notices, the formal notices from banks, insurance companies, and credit card companies, amongst others, informing us what the companies’ policies are with regard to exchanging our personal information with other companies.

And when we sign up online for an app or service, we get an e-copy of the notice. In some cases, we are given the opportunity to “opt out” of some of the company’s sharing practices by filling out a portion of the form and returning it to the issuing company or checking the appropriate boxes on the on-line form.

One thing all these companies have in common is they fall within the definition of “financial institution” that appears in the Gramm-LeachBliley Act (GLBA) and the FTC’s Privacy Rule. And, at least one thing that many car dealers have in common with the big boys of the financial world is that they too are often deemed to be “financial institutions” under the very expansive definition.

There are both substantive prohibitions on release of certain personal information about customers to third parties and disclosure requirements for advising consumers of information-sharing practices in the rule.

The Privacy Rule applies to car dealers who (1) extend credit in

February 2022

T e x a s

D e a l e r

Michael W. Dunagan by

TIADA COUNSEL

There are two occasions when privacy notices are generally required to be given: (1) no later than when a retail installment contract is signed, and (2) annual follow-up notices to customers whose accounts are active. A 2015 amendment to the Privacy Act exempts many BHPH dealers from having to send annual follow-up notices. connection with the purchase of a car for personal, family, or household use (typically a BHPH transaction), or (2) arrange for someone to finance or lease a car for personal, family, or household use (typically an indirect lender transaction).

There are two occasions when privacy notices are generally required to be given: (1) no later than when a retail installment contract is signed, and (2) annual follow-up notices to customers whose accounts are active. A 2015 amendment to the Privacy Act, as explained below, exempts many BHPH dealers from having to send annual follow-up notices.

Here’s how the rule applies to

disclosure of information practices by different types of dealer sales:

Cash Sales. The Privacy Rule does not apply on a cash sale or sale in which the buyer arranges financing on his or her own directly through a lender. No privacy statement has to be given by the dealer in these situations.

Buy-Here-Pay-Here Transactions. While they techni-

cally fall under the requirements of the GLBA and the Privacy Rule, BHPH dealers are not the main target of the rule’s requirements. The central thrust of GLBA and Privacy Rule is to limit sharing of personal information (name, address, phone number, 11

driver’s license number, and social security number, for instance) with unaffiliated third parties. BHPH dealers (unlike banks, insurance companies, and credit card companies, and maybe franchised dealers) typically don’t sell customer lists or otherwise share customer information with third parties. When they do share personal information with third parties, the sharing most often falls under one of the exceptions to the Privacy Rule (as explained below).

Pre-sale. A BHPH dealer who does not share personal information with third parties, except under the exceptions discussed below, would not be obligated to give a privacy notice to a potential buyer until the person actually entered into a contract. If the dealer intends to share personal information with third parties beyond the allowed exceptions, it would be necessary to give a privacy notice with an optout provision upon the receipt of personal information.

Post-sale. If a BHPH transaction is completed, the dealer would have to give the appropriate privacy notice, no later than the time of the signing of the retail installment contract. And, prior to the 2015 amendments, BHPH dealers were required to send annual follow-ups of privacy policies to each customer with an open account. As will be explained below, many BHPH dealers are now exempt from sending the annual follow-up.

Retail or Indirect Transactions. Because at the time

of signing the dealer is listed on the retail installment contract as the seller and creditor, the same rules as those that apply to the BHPH dealer would apply here. That is, a privacy notice would have to be given no later than the time of the signing of the retail installment contract, even though the dealer intends to assign 12

the contract immediately afterward to a third party.

After the assignment to the third party takes place, any responsibility for sending the annual notices shifts to the assignee of the contract, and the dealer is relieved of that duty.

However, the dealer must continue to honor the terms of the privacy policy with regard to protecting the personal information of the debtor.

Third-Party Lenders. Once a third-party lender takes assignment of a retail installment contract, the third-party lender must deliver its privacy notice to the customer within a reasonable time after assignment. The third-party lender can, however, arrange to have the dealer deliver the third-party lender’s privacy notice at the same time the dealer gives its notice. And, as mentioned above, the third-party lender, as the owner and holder of the obligation, must comply with the annual notice requirements.

Turn-downs. If the dealer denies the extension of credit to an applicant, and has no intention of sharing this person’s information, then no privacy notice is required.

(However, an Adverse Action Notice under the Equal Credit Opportunity Act and Regulation B is probably required, but that’s a topic for another article).

The Opt-Out Notice

Most financial institutions give their customers the long-form privacy notices that disclose to whom, under what circumstances, and which types of personal information might be shared with unaffiliated third parties. If they intend to share personal information that is not exempt under the exceptions to the Privacy Rule, they must give their customers the opportunity to opt out of having certain types of information shared. The opt-out is usually exercised by sending in a tear off coupon and returning it or

calling a toll-free number.

Since most BHPH dealers don’t share personal information outside the allowable exceptions, the giving of an opt-out is usually not required, since there is nothing for the customer to opt out from. Therefore, the BHPH dealer (and other “financial institutions” that don’t share personal information with unaffiliated third parties) can use simplified short-from privacy policy forms that don’t have opt-out language.

The Exceptions

Much has been said to this point about the exceptions to the Privacy Rule and how exchange of personal information under an exception doesn’t constitute a violation of the Privacy Rule or trigger the requirement of giving an opt-out opportunity. What are the exceptions that allow the sharing of information?

The most common type of sharing

of information by BHPH dealers is the information given to collectors and repossession agents to locate debtors and repossess vehicles when a debtor is in default.

This information can be shared under an exception to the opt-out rules for third-party vendors, as long as only information necessary to carry out the purpose of the sharing is given, and as long as the third-party vendor agrees in writing (1) not to pass the information along to a third party and (2) to protect the information and properly dispose of it when it is no longer needed.

Another common exception is the

“secondary market sales” exception that allows the holder of a car receivable to pass on personal information to a third party in conjunction with the sale or assignment of the receivable to a third party without violating the Privacy Rule or triggering the opt-out requirement.

Credit information given to credit

reporting agencies is also exempt.

That is, a creditor who routinely T e x a s

D e a l e r

February 2022

reports credit information to a credit bureau is not considered to be sharing or trading personal information.

Personal information can also le gally be given to law enforcement officers, or otherwise to comply with federal, state, or local laws.

Some due diligence should be exercised to verify that the person requesting the information is in fact a law enforcement officer.

Information can be shared at the

request of and with the permission of the debtor (such as payoff information requested by a bank or dealer taking a vehicle in trade), or to comply with a subpoena, or a civil, criminal, or regulatory investigation.

The Short-Form Privacy Notice

Dealers who don’t share customers’ personal information with third parties, other than under the exceptions described above, can use a simplified, short-form notice form. The simplified notice describes the categories of nonpublic personal information collected; states the fact that the creditor does not share nonpublic personal information about customers to third parties, except as authorized by law; and describes the steps taken to protect the privacy and security of the information. No opt-out provision is necessary. A form that meets this requirement is available from Burrell Printing Company (800-531-5234). The Burrell short form comes in duplicate with a signature line to acknowledge receipt.

One copy is given to the debtor at the time of closing and the other should be kept in the dealer’s file.

Some dealer management software programs also have short forms available.

Many BHPH dealers use the long form privacy notice with a customer opt-out provision, even though they don’t share information outside of the allowable exceptions.

February 2022

T e x a s

D e a l e r

While there is nothing improper with doing so, use of the long-form notice triggers the need to send annual follow-up notices.

The Annual Follow-Up

Under the law and rules that existed prior to the 2015 amendments, all “financial institutions” were required to send annual follow-up notices (often just a copy of the original privacy notice given at closing) to customers with open accounts. After that date, those creditors who qualify for the short-form notice, and who don’t change their privacy policy during the year, are now exempt from sending the annual follow-up. Creditors who don’t qualify for the short-form notice and must use a “long-form” notice that has an opt-out option are still required to send annual follow-ups.

Here’s the bottom line for BHPH dealers after the Privacy Act was amended: Dealers who only share custom ers’ personal information under the allowable exceptions to the Privacy Act can use a short-form privacy disclosure statement at closing.

Those dealers who qualify for the

short-form statement, and who do not change their privacy policies during the course of the year, have no obligation to send annual follow-ups.

Dealers who share customers’ per sonal information beyond the exceptions with third parties, and are thus required to use the long-form disclosure statement with an optout, are still required to send annual follow-ups to customers who have open accounts with the dealer.

Michael W. Dunagan is an attorney in Dallas, Texas who has represented the Texas Independent Automobile Dealers Association for over 40 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.

Upcoming Events 2022

TIADA DEALER ACADEMY Online registration available. www.txiada.org

February 7 Keeping Your BHPH Dealership Legal and Compliant Houston, TX

April 4 From Inventory Acquisition to

Tracking Service Department Metrics – Getting and Selling the Right Vehicle is the Bottom Line Arlington, TX

OTHER TIADA EVENTS

January 24 Board of Directors Meeting Austin, TX

April 25 Board of Directors Meeting Austin, TX

July 24 Board of Directors Meeting Round Rock, TX

24–26 TIADA Conference and Expo Round Rock, TX

13

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 2015 or earlier, it is recommended that you upgrade to the current editions.

Texas Automobile Repossession: A Lien Holder’s Legal Guide

TIADA Member Price: $125 non-members $175

Everything you need to know about repossessions is addressed in this book, including Notification Requirements, Post-Repo Procedures, Private Sale vs. Strict Foreclosure, Bankruptcy, PostDisposition Accounting, Tracking and Shut-off Devices, the 60% Rule and more. PLUS – includes all required forms.

Dealer Financing of Used Car Sales

TIADA Member Price: $125 non-members $175

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 texas independent automobile dealers association

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 40 years.

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

TIADA texas independent automobile dealers association

Available for purchase online at www.txiada.org under “Resources, Legal and Compliance” or call 512.244.6060 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.

feature

A Modern Dealership’s Approach to Cybersecurity

by Erik Nachbahr

Founder and President of Helion Technologies

S

o much has changed for dealers in recent years. COVID-19 and a variety of other circumstances have brought about a shift in the cybersecurity approach dealers need to take to protect their data, finances, and reputation. In this article, we’ll discuss 3 key shifts taking place that are driving dealers to adopting a more modern cybersecurity posture.

Additionally, we’ll provide an overview of what it means for dealers to implement a modern dealership’s approach to cybersecurity.

Auto and truck dealers need to evaluate their approach to cybersecurity and the weapons they have on hand to

February 2022

T e x a s

D e a l e r

Consumers are fed up with businesses who fail to properly secure the information they have entrusted to the business.

defend their business. Three key shifts are taking place that should accelerate an evolution in dealership IT.

1

n Increasing Attack A Landscape

Recent events serve to demonstrate the adaptive, opportunistic, and nimble nature of the cybercriminal. Since 2020, we have seen the cybercriminal taking advantage of the pandemic— and the new remote work environment it has created—to unleash a wave of new spam, malware, phishing scams, coronavirus-related business email compromise attempts, SMS phishing, and credential theft attacks.

15

Additionally, with millions of people working from home, businesses are forced to protect an exponentially larger attack surface. We now have risks associated with always-on VPNs, more mobile accessibility, and the trend for more people to use personal devices for business purposes.

It’s also important to keep in mind that most cybercriminals don’t get caught—and, as it turns out, this line of work is quite lucrative. So, it makes sense that such a profession would attract others to get into the game. This means there is an increasing number of cybercriminals that we all need to worry about. Dealers now have a larger attack landscape than ever before to defend against.

2

Privacy Concern & Compliance

Increasingly, consumers demand that their buying experience be personalized to their needs. Consumers expect that those they do business with know them and can cater to their needs. To meet consumer expectations, businesses must collect, use, and store more consumer data.

At the same time, consumers are fed up with businesses who fail to properly secure the information they have entrusted to the business. Consequently, consumers are demanding that legislators do something to drive businesses to take reasonable measures to secure their data. As you are surely aware, the FTC has strengthened security safeguards for consumer financial information.

Moreover, consumer privacy legislation is spreading across the country and is now in 24 states.

3

Data Reliance & Distribution

To meet consumer expectations, dealers must increasingly rely on data to personalize the consumer’s interaction with the dealership. In addition, as cloud and mobile computing become more prominent in the business of selling and servicing cars and trucks, data doesn’t just reside within the dealership’s secure perimeter anymore. Data now travels outside of this perimeter and must be protected wherever it exists.

Modern Dealership Cybersecurity

The shifts impacting dealers mentioned above all contribute to the emergence of a new and modern way for dealers to protect their businesses from the cybercriminal. Education, technology, and people comprise the three essential elements of a modern dealership’s approach to cybersecurity.

Education

91% of cybersecurity breaches begin with a successful phishing attack. This means that an employee clicked a malicious link in an email. The best way to mitigate this 16

risk it to turn your employees into a human firewall.

Solutions are available that make training employees to spot and avoid a phishing scam easy. This is a great way to decrease your dealership’s “phishability.”

Technology

There are some essential technologies that modern dealerships are adopting as the cybersecurity and data compliance landscape shifts. These include SIEM, IAM, and DLP. •S IEM – Security Information Event Management (SIEM) is a software solution that enables the detection of cyber-attack incidents that would otherwise go unnoticed and it empowers your IT team to quickly take measures to protect your dealership.

• I AM – Identity and Access Management (IAM) is about defining and managing the roles and access privileges of individuals along with the circumstances in which these users are granted or denied those privileges. IAM systems make it possible for administrators to change a user’s role, track user activities, generate reports, and enforce policies.

•D LP – Data Loss Prevention (DLP) solutions ensure that sensitive data isn’t accessed by unauthorized users or that this data isn’t misused.

SIEM, IAM, and DLP can all work in concert. DLP protects sensitive data as it makes its way to endpoint devices. IAM complements DLP by connecting different authentication services together so that when users need access to information, they make a request through a single service. SIEM aggregates, correlates, and assists in analyzing the event logs from a variety of different sources to identify suspicious behavior.

People

To implement and maintain a modern dealership cybersecurity approach, you must have a team of trained, skilled, and knowledgeable IT professionals on hand to configure, manage, and complement the technologies mentioned above. If, for instance, your SIEM “sounds the alarm” that your dealership has been breached, you must act quickly. Your IT team can’t hesitate to first think about what they should do. Your IT team must have a well-scripted plan in place for how to respond and every member of your IT team needs to know exactly what to do to protect your dealership.

Since only about 30% of dealers employ a network engineer with computer security certifications or training, IT staffing is something dealers need to give more attention. Things are much different today. Dealership IT staffs need to be more than just someone who can periodically reset a router and assist employees who are having difficulty printing. A dealership’s IT team is mission critical for implementing a modern approach to cybersecurity and thriving in the new normal.

T e x a s

D e a l e r

February 2022

I’M ACQUIRING INVENTORY WITHOUT USING MY OWN MONEY AND I’M MORE SUCCESSFUL THAN EVER. MONIQUE BELGRAVE CONSUMER 1ST AUTO GROUP HASBROUCK HEIGHTS, NJ

NextGear Capital is so much more than a floor plan company or just a source of funding. They guide me away from bad purchases, educate me on new trends and let me know what inventory to go after.

I continue to take their advice because they’ve never steered me wrong.

Discover where we can take you. Visit nextgearcapital.com. *This testimonial was received via interview, audio and/or video submission. This testimonial is based on this dealer’s individual experiences, reflecting real life experiences of a NextGear Capital dealer. NextGear Capital does not claim they are typical results that dealers generally will achieve. This dealer’s experiences may not be indicative of future performance or success of any other dealers. Some of the testimonial has been shortened so the whole message is not displayed due to length and/or relevance.

18

T e x a s

D e a l e r

February 2022

membership corner

T

“

his winter, the TIADA membership team has been receiving an increased number of calls from members about new industry updates, legislation, and compliance, among other important issues. Several of you have also shared with us that sales have started out strong in 2022, which is great news! This month, we decided to compile just a few of the questions members have been asking about recently. Of course, please do not hesitate to reach out to TIADA at anytime with your questions.

Q: I used to receive industry email updates from TIADA, but I haven’t received them recently. What should I do?

TIADA sends its industry email on the first and third Thursday of every month. Updating your member profile helps to ensure your team receives critical industry news impacting your business, including the latest legislative updates. If you have not been receiving TIADA email communications recently to your inbox, this is a good time to log in to your membership account and make sure your info is current. Once logged in, you can update your contact details, revamp your business description for the online member directory and even add members to your team.

Log in to get started: www.txiada.org/login.asp.

Q: I have a question about a TxDMV investigation. Can you help me prepare for this?

Local Chapters CORPUS CHRISTI G.R. Moore The Car Shack (dates announced at

www.txiada.org)

EL PASO Cesar Stark S & S Motors Meeting – 3rd Friday (Monthly)

FORT WORTH Jerry Smith

You’re in luck. TIADA’s Compliance Consultation Service can help you prepare for a TxDMV investigation or OCCC exam, and we are also experts in repossessions, bankruptcy, and many other problems that dealers may face in the course of doing business. Just keep in mind that the information provided through this service is given for informational purposes only and does not constitute legal advice.

Members are encouraged to call the office or complete the form at: https://www.txiada.org/compliance_consult_svc

H J Smith Automobiles

Q: How can I find products and services for my business?

April Hanson

TIADA’s online member directory is a great tool when searching for resources. Whether you’re looking for accounting, insurance, GPS services or to connect with another independent dealer, there are several ways to do so. Search for members by category or enter a keyword or phrase. Narrow your search to find services or other dealers in your area using the U.S. Radius options. The directory will produce a list of results with contact information.

TIADA members can log in to access the online member directory available here: https://www.txiada.org/AF_MemberDirectory.asp

Stay Connected:

Have Questions?

@TXIADA February 2022

T e x a s

D e a l e r

membership@txiada.org 512.244.6060

(dates announced at

www.txiada.org)

HOUSTON Coast to Coast Motors Meeting – 2nd Tuesday (Monthly)

SAN ANTONIO Jose Engler Irving Motors Corp (dates announced at

www.txiada.org) 19

Auto Dealer Solutions

DEALER SOFTWARE , WEBSITES & MARKETING

feature

How Seasoned Dealers Are Navigating Auctions Today

by Stephen Pallas

TIADA Director of Marketing and Communications

W

e released the results of our dealer member Online auctions offer greater anonymity. But anyone

survey in the January issue of Texas Dealer. can take advantage of this, as this is as true for your We reported that the percentage of dealers acdealership as it is for your competitors’ businesses. quiring inventory from online auctions has nearly tripled In-person auctions allow you to see the vehicle in-per since 2017. Conversely, the percentage of dealers acquirson, which means you can inspect the car for yourself, ing inventory from in-person auctions has dropped by rather than relying on condition reports. about 20 percentage points in the same timeframe. While In-person auctions have fewer buyers, which usually

the auction landscape has shifted dramakes the competition pool a bit matically in recent years, a lot of that smaller. could be attributed to the conditions of In-person auctions give you better Whether you head

the COVID-19 pandemic. Regardless opportunities to build strong relaof the causes of the shifting preference to the lanes or tionships with auction staff, regular to online auctions, there are clearly sellers, and other dealers. purchase your benefits and disadvantages to both models.

Auction fees are a big issue for dealinventory online, The people who run and operate iners, so knowing what to expect from person auctions have worked diligentboth online and in-person auctions it’s important to ly with health authorities to ensure is an important part of maintaining a that their locations comply with local, stay nimble and successful dealership. Most auctions state, and federal safety standards. will set their fees on a sliding scale. to adjust to a Many dealers in Texas still greatly Expect to pay between $100 and $500 favor buying their automobiles in the in buyer’s fees, depending on the vechanging market. lanes, even while others have made the hicle purchase amount. switch. A large portion of dealers are also using a hybrid acquisitions model by purchasing vehicles both ways.

Through our conversations with dealers, we’ve noticed three important distinctions in the experience of attending in-person and online auctions. These key differences have benefits and disadvantages. Here’s how online auctions differ from in-person auctions: Online auctions increase the number of cars avail able to you. The caveat, here, is that you may have to travel further to retrieve the vehicles and incur higher transportation costs in the process than with in-person auctions in your local city or county. It also increases the number of dealers bidding and, therefore, the competition you face.

Online auctions are updated regularly and offer deal ers a flexible bidding schedule. This can be beneficial if you have a plan for notifications filtered to your specific needs, which can be a bit of a tricky process.

Dealers who are digital can more easily take advantage of automated bidding tools that some auctions offer.

February 2022

T e x a s

D e a l e r

21

Regardless of auction type, it is critical that you know the strengths and weaknesses of your inventory, that you have a strategy, that you plan ahead, and that you know how much you are willing to spend (including transportation and make-ready costs). It is important not to become overinvested emotionally in any vehicle. It’s easier than you might think to spend above your limit when you fall in love with a particular car. It is also essential to know the rules of any auction, even if you’re a seasoned dealer.

Seasoned Dealers Offer Their Experience with Online and In-Person Auctions

It is impossible to overstate the impact recent events have had on inventory for dealers. They are doing their best to find opportunities to make the best of a difficult situation. Donny Cuevas has been an independent automobile dealer in Texas for twenty years. He owns two lots: Cuevas Auto Sales in San Benito and Cuevas Auto Mall in Harlingen. In 2018, 90 percent of Donny’s inventory was sourced at in-person auctions and 10 percent was acquired online. Now, the reverse is true. He sees many benefits to purchasing his vehicles online, especially considering recent disruptions in the supply chain.

“Inventory is scarce,” he says, but he emphasizes that the auctions themselves haven’t dramatically changed,

even considering the pandemic. “When you go to auctions, whether in person or online, the processes are largely the same as they were in the past.”

What changed for Donny has little to do with recent events and more to do with the conditions of being a busy businessowner. He believes the primary benefits of online auctions are their flexible schedules and better opportunities for bargain hunting. The alerts on his phone are set so he knows when new inventory becomes available, and he is ready to purchase at a moment’s notice.

He acknowledges that, for many dealers, it is incredibly difficult to purchase a car without seeing it up close or turning the motor on. And that’s a fair assessment of what many other dealers believe. Dealers know what they’re getting at traditional auctions. Having seen their purchased vehicles up close and in person, there are few surprises at pick-up time.

For many, it can take quite the leap of faith to believe in the accuracy of online condition reports listed by online auctions. Iraj Afghani, owner of Chase Auto Finance in Houston, believes there are several benefits dealers experience with in-person auctions. “When you’re in the lanes,” he says, “you can see anything that might have been missed in the condition report.” As a business model, therefore, online auctions are inherently riskier.

SUPERIOR SERVICE STARTS WITH SUPERIOR PARTNERS QUALITY PARTS Replacement Parts

Sell with confidence and reduce comebacks.

Backed by our parts and labor guarantee with 48-hour reimbursement.

Dedicated Services

We prioritize NIADA members’ needs and offer 30 minutes or less delivery on extended import and late model OE and OES parts.

Special Member Pricing

Take advantage of bulk discounts to make the most out of every sale.

REPAIR INFORMATION ALLDATA Repair®

Whether reconditioning for resale or servicing customers’ vehicles, save time and get the job done right with OE-accurate repair data.

ALLDATA Diagnostics®

EXCLUSIVE DISCOUNTS FOR TIADA AutoZone Parts & Services ALLDATA Software Solutions ©2021 AutoZone IP LLC. ALLDATA LLC. All rights reserved. AutoZone is a registered trademark of AutoZone Parts, Inc. ALLDATA, ALLDATA Repair, ALLDATA Diagnostics and ALLDATA Tech-Assist are registered trademarks of ALLDATA LLC. All other marks are the property of their respective holders.

22

TIADA half page.indd 1

Your affordable scan tool solution, the only one with ALLDATA’s industry-leading repair information built-in.

ALLDATA Tech-Assist®

Call our hotline staffed with ASE-Certified Master Techs. Available Monday through Saturday to help diagnose and repair tough problems.

T e x a s

D e a l e r

12/17/20 2:30 PM

February 2022

Considering his own practices, Iraj adds that, “while the pandemic was a catalyst for many of us switching to online auctions, a lot of it just has to do with your own preferences and availability.”

Many dealers still prefer in-person auctions because of the relationships they develop with auctioneers and staff, and they can assess their auction competitors more accurately. “Auctioneers take care of you when you’re in the lanes. You can also see with your own eyes which dealers are bidding on which vehicles. That’s an experience the online auctions just can’t replicate.”

Iraj has been a dealer since 1998. He used to wake up early to make the auction rounds between Houston, Austin, Buda, and San Antonio. Like many dealers, he used to source most of his inventory in the lanes. Now, he says, he purchases 90 to 95 percent online. In addition to reducing his travel and affording him a more flexible schedule, he says there are more opportunities for higher quality vehicles at online auctions. And Donny agrees that adapting to this buying climate is a matter of survival. “By switching to online auctions, I spend a bit more on transportation, but I am also able to buy a higher volume of cars,” he says.

Traditionally, dealers who rely on in-person auctions tend to stay as local as possible. Yet Donny also acknowledges that dealers who primarily source their vehicles in the lanes are still able to find exceptional deals without having to worry about spending the time and capital on extended transportation hauls to bring their

purchases back to their lots. Both he and Iraj say there’s a give and take, that there are benefits and disadvantages to both models.

Advice for New Dealers

For new dealers, it’s a challenging landscape to be walking into. Iraj notes that the pandemic has changed so much, and it is difficult to predict how auctions will change or how dealers engage in them. He also sees that these new dealers are contributing to the way the industry is transforming. “They are definitely changing the market,” he says. “Their experience is primarily online. They are less experienced at assessing value and more likely just to accept that vehicles are worth what the market determines.” He suggests these dealers might also be more likely to accept condition reports at face value. “It can be a risky way to do business,” he says.

“But that doesn’t mean it can’t be lucrative.”

Dealers will do best to adjust to their specific needs and set of resources. No matter what type of auction you prefer, have the larger framework of your business strategy in mind, never overspend on a vehicle, and know the rules of every auction inside and out. In-person auctions require relationship-building and a keen eye for vehicle quality and price assessment, while online auctions demand technical savvy and a greater tolerance for risk. Whether you head to the lanes or purchase your inventory online, it’s important to stay nimble and to adjust to a changing market.

DRIVING GROWTH KEEP YOUR CUSTOMERS. KEEP YOUR PROFITS.

Fast, No-Hassle Lending.

CALL NOW TO REACH YOUR FULL POTENTIAL!

972-239-6668

February 2022

T e x a s

D e a l e r

23

SAVE THE DATE

July 24-26,

2022

legislator spotlight Representative Armando Walle

S

tate Representative Armando Walle is serving his seventh term in the Texas House of Representatives. Representative Walle is currently a member of the House Committee on Appropriations, serving as Chair of the Appropriations Subcommittee on Articles VI, VII, VIII (natural resources, business & industry, and regulatory entities). He also serves as a member of the House Committees on Natural Resources and House Administration. Additionally, he serves on the Joint Advisory Committee for the Texas Infrastructure Resiliency Fund.

He represents Texas House District 140, which includes northern portions of unincorporated Harris County and the City of Houston. A practicing attorney, State Representative Walle enjoys spending his free time with his family-- his wife Debbie and their two young sons — frequently celebrating and lamenting the ups and downs of his beloved University of Houston Cougars, Houston Astros, Houston Texans, and Houston Rockets.

Texas Dealer: What inspired you to run for public office?

Armando Walle: Honestly, I didn’t even think about politics in general until I got an opportunity to do the Texas Legislative Internship Program when I was in college. I was placed in Houston City Council member Carol Mims Galloway’s office, and I got hooked. I went on to work in the district offices of Congresswoman Sheila Jackson Lee then the former Congressman Gene Green. Even while working for all those elected officials, I still did not really entertain the thought of running for office, until I was approached and asked in 2007 to run for my current State Representative seat.

Texas Dealer: What skills do you utilize most

frequently at the Capitol?

Rep. Walle: Working with my colleagues, staff, agencies, advocates, and lobbyists involves a lot of February 2022

T e x a s

D e a l e r

different skills, but I feel the ability to connect and try to understand what different people really need is the most important. It’s surprising how often people who think they are on opposite sides of an issue actually have lots of common ground to work from.

I do think my law degree is helpful for navigating complex topics, but I think hustle is as important, if not more so, than any other talent or skill I may take to Austin.

Texas Dealer: What do you think makes Texas House

District 140 so unique?

Rep. Walle: HD140 is a little wedge of Houston, in between I-45 and I-69, north of 610, south of the Beltway. Folks in Houston may be familiar just because they are used to driving past it on their commutes to and from the suburbs north of Houston.

But it’s a very down to earth, hard-working area with some folks who have been around long enough to 25

remember when it was the outskirts of Houston, to the scores of immigrants and young families who recently made our area home.

I know folks may traditionally think of the east side for the best Mexican food in the Houston-area, but you’d be sleeping on all the Aldine and Northside spots in my area.

Texas Dealer: What problem or policy do you think deserves more attention?

Rep. Walle: There are lots of policies and problems that have public attention, but one I think is kind of all over the place is water policy.

Living near the coast or in east Texas, it’s easy to not realize we’re in the middle of a drought. But between continued population growth, increased development, along with unpredictable weather, the future of enormous swaths of Texas will depend on how we approach water use and water conservation.

The quality of Texas’ future growth will depend on if we ensure an adequate, highquality, sustainable, properly distributed water supply.

Texas Dealer: What is the

biggest challenge facing small business owners today?

Rep. Walle: I think currently, uncertainty with revenue and costs related to the pandemic, whether it’s getting people to do the work, or getting customers to spend money on goods or services, all of it is making extremely difficult to plan and operate a small business.

Dealing with constantly changing regulatory conditions in the midst of all this can make it virtually impossible to stay afloat.

Texas Dealer: What is the Texas House Appropriations

Committee working on currently and in the near future?

Rep. Walle: We’re doing this interview just before the new year, so I can tell you we are now seeing dust settle from the past session. I know a lot of our work will be monitoring the continued impact of the pandemic on state agencies, especially with regard to public education and health care, and we will be closely watching how the federal ARPA funds we just disbursed in the fall are being utilized.

Texas Dealer: Why is serving on this committee so

Rep. Walle: Budgets are moral documents. They reveal the priorities and values of a society.

To me, I look at each funding decision we make with that kind of scrutiny. In a $250 billion plus budget, we make mistakes sometimes. But we do very well most of the time. And since 181 legislators have a say in this budget process, I can assure you we all don’t always agree on all aspects of it.

Being able to be a part of the budget process from the committee level up gives me an outsized opportunity versus my colleagues not on the committee to make impactful adjustments to the budget.

Texas Dealer: What was

the first vehicle you owned?

Rep. Walle: Back in 1996, my mom bought me an ’83 Buick Riviera for $700 in payments from a neighbor.

Gray with leather seats. Not too flashy or cool or anything, but I was so thrilled to have my own vehicle.

Texas Dealer: Do you have

any final thoughts for our readers?

Rep. Walle: I always recommend folks to become familiar with their elected officials — not just those that clock in on Capitol Hill. I’m talking about your state representatives, city councilmen, county officials, school board, etc. State and local government is where decisions really affect your day-to-day life.

These more local offices often mean the elected officials have (or need) to be more accessible because they usually represent a smaller constituency and have more incentive to know about and work on individual constituent issues. In getting to know and working with your elected officials, it’s a two-way street in which both an elected official and a constituent will gain something out of that civic engagement. The elected gets to know that much more about what’s going on his/her backyard, and the constituent will understand more about how to engage in the civic process and can help his/her neighbors on getting help too.

Want to share your story in an upcoming issue of Texas Dealer?

info@txiada.org

important to you?

26

T e x a s

D e a l e r

February 2022

ATTENTION STUDENTS!!!

$1,000

Marvin Norwood Scholarship DEADLINE

May 13, 2022 {Applications and/or any required documents received after May 13, 2022 will NOT be accepted.}

SCHOLARSHIP APPLICATION Date: Name:

DOB:

Address: City:

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.

State:

Email: (You will receive an email confirmation of receipt.)

Telephone Number: High School Last Attended:

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

Address:

3. Each applicant must complete the application form.

Date of Graduation:

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

Other High Schools Attended (Names and Addresses):

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 2022

T e x a s

D e a l e r

Zip:

City:

State:

Zip:

Dates of Attendance:

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 512.244.6060. Please return the completed application with all required documents to: TIADA Attention: Scholarship Applications 9951 Anderson Mill Rd. Suite 101, Austin, TX 78750

27

Please fill out the form on the next page to help our efforts out at the Capitol!

Thank you to all those who have contrubuted to INDEPAC!

Dear TIADA Community, We want to take a moment to thank all of those who have made a contribution to INDEPAC. Due to your generous efforts, we collected over $47,000 in donations in 2021.

Because of these contributions, INDEPAC can continue to protect the rights and interests of independent automobile dealers across the state of Texas. There are many issues confronting the industry right now, and we appreciate your dedication to ensuring we continue to have a strong voice at the Capitol.

We are looking forward to representing the interests of all independent dealers along the road ahead.

Thank you for your support!

Sincerely, INDEPAC

Yes, I would like to help with TIADA’s grassroots effort!

______________________________________________________________________________________

Please list me as a sustaining donor. I would like to support my industry by making a monthly credit card donation of

$______________

Add me to the KEY-PERSON list! I know (Name of Legislator) _______________________________________________ as a ____ Acquaintance

____ Personal Friend

____ Professional Contact

I would like to attend political fundraisers in my area I would like to support my industry by pledging a one-time donation of ___$1,000

___$500

___$250

___$100

Other $________

______________________________________________________________________________________

____ Personal Check Payable to INDEPAC

_____Personal Credit Card

Name_______________________________________________________________________________ Company ___________________________________________________________________________ Home Address_______________________________________________________________________ Email ______________________________________________________________________________

** Personal Check or Personal Credit Card only. Corporate contributions are prohibited by state law.

Contributions are not tax deductible as charitable contributions for federal income tax purposes. ** Charge my Credit Card V MC D AM __________________________________________________ Exp: _____/_____ CVV: _____ Name on Card: ____________________________________________________________________________ Card Billing Address (if different):

______________________________________________________

______________________________________________________________________________________

Or donate online at www.txiada.org >> Resources >> Advocacy >> Political Action Committee ______________________________________________________________________________________ Referred by:

c/o TIADA 9951 Anderson Mill Rd Suite 101 Austin Texas 78750 PHONE

February 2022

T e x a s

D e a l e r

512.244.6060 FAX 512.244.6218 EMAIL accounting@txiada.org

29

on the cover

by TIADA Staff

T

he Gramm-Leach-Bliley Act (GLBA) requires financial institutions—companies that offer consumers financial products or services like loans, financial or investment advice, or insurance—to explain their information-sharing practices to their customers and to safeguard sensitive data. The definition of financial institution is extensive and includes automobile dealers, since they collect a large volume of information from their customers and much of that information is categorized under federal law as highly sensitive non-public personal information (NPPI).

30

Dealers will need to update and maintain their policies in line with the new consumer safeguards now and in the foreseeable future.

Title 5 of the GLBA created an affirmative and continuing obligation for each financial institution to respect and protect the security and confidentiality of customer’s nonpublic personal information. The Federal Trade Commission (FTC) at the direction of Congress developed two main rules related to implementing Title 5. They are the Privacy Rule and the Safeguards Rule. The Privacy Rule limits the disclosure of NPPI to third parties and the Safeguards Rule addresses safeguarding the customer’s NPPI.

The Final Rule

The FTC published its Final Rule to

T e x a s

D e a l e r

February 2022

amend the Safeguards Rule in the Federal Register on December 9, 2021. These changes went into effect on January 10 of this year. The changes to the Safeguards Rule include five primary modifications that change how dealers must contend with cybersecurity immediately and in an ongoing basis: It adds provisions designed to

provide covered financial institutions with more guidance on how to develop and implement specific aspects of an overall information security program, such as access controls, authentication, and encryption.

It adds provisions designed to

improve the accountability of financial institutions’ information security programs, such as by requiring periodic reports to boards of directors or governing bodies.

It exempts financial institutions

that collect less customer information from certain requirements.

It expands the definition of ‘‘fi nancial institution’’ to include entities engaged in activities the Federal Reserve Board determines to be incidental to financial activities. This change adds ‘‘finders’’—companies that bring together buyers and sellers of a product or service—within the scope of the Rule.

It defines several terms and pro vides related examples in the Rule itself rather than incorporating them from the Privacy of Consumer Financial Information Rule (‘‘Privacy Rule’’).

FTC Chair Lina M. Khan, joined

by Commissioner Rebecca Kelly Slaughter, released a statement on October 27, 2021. She writes, “the harms stemming from the types of security vulnerabilities that this Rule addresses are all too real.

Victims of breaches have their most sensitive information exposed, making them more vulnerable to identity theft, phishing attacks, and other forms of fraud.” The February 2022

T e x a s

D e a l e r

commission’s ruling seeks to mitigate these risks with more detailed requirements for all kinds of financial institutions, including dealers.

In their dissent, however, Commissioners Noah Joshua Phillips and Christine S. Wilson believe the new rules “require more justification.

Such rules make companies liable for penalties and could focus efforts on compliance to address penalty deterrence rather than risk.” There has been a fair amount of public criticism of the Final Rule, as well.

“It’s going to affect a lot of us, in terms of added expense and work. Even for the smaller dealers, this Final Rule is going to have a big impact on our day-to-day operations.”

Erika Blankenship, Texas Auto Center – Austin, TX

The National Automobile Dealers Association (NADA) has stated, for example, that dealers will incur “enormous compliance costs” and that the measures “fail to account for business size, risk and sensitivity of the data collected by entities required to comply with the rule.”

Industry Reactions to the Final Rule

TIADA’s Legislative Committee is comprised of dealers whose

businesses will be impacted by the new measures. Independent automobile dealer and Committee Chairperson, Erika Blankenship— of Texas Auto Center in Austin— believes the amendments are going to create a lot more work for dealers. “It’s going to affect a lot of us, in terms of added expense and work.

Even for the smaller dealers, this Final Rule is going to have a big impact on our day-to-day operations.”

Committee member Chris Knox, owner of Auto Center in Terrell, makes similar observations. He guides the staff at his dealership to protect all consumer records. “We already offer a ton of training at our business and make sure we are doing everything we can to be compliant and protect our customers,” he says.

“It’s obviously in our best interests to keep this information secure, but this seems like unnecessary government overreach that will ultimately make vehicles more expensive.”

Dealers like Blankenship and Knox have rightly been concerned about the updates to the Safeguards Rule, which requires financial institutions under FTC jurisdiction to have measures in place to keep customer information secure. In addition to developing their own safeguards, companies covered by the Rule are responsible for taking steps to ensure that their affiliates and service providers safeguard customer information in their care.

Cyberthreats have and continue to evolve. The partners at law firm Arnold & Porter note that the Rule’s “issuance is indicative of an increasingly volatile cyber threat landscape and the concerns such an environment raises for financial institutions [including dealers] in particular.” It remains unclear, however, whether the new Safeguards Rule amendments will be effective or if they will simply cause more obstacles for dealers.

Blankenship’s dealership takes all the precautionary measures necessary to make sure her business is 31

compliant. She even suggests that the provision about service providers is not new in terms of her dealership’s existing safeguards policy. “We have all of our vendor contracts reviewed by our compliance attorney,” she says. “We make sure we are responsible for what our vendors do. That should have already been part of your best practices.” In other words, she does not take safeguarding consumer information lightly. “Obviously we need to take this seriously as an industry,” she says. But dealers like Blankenship are apprehensive about the proposed changes and the additional time and money it will cost dealers who may already be financially strained with the rising costs of doing business.

What Does the FTC Consider a Small Business?

Part of the stated goals of the Final Rule are to avoid hindering small businesses or placing undue burden on their resources. The FTC states that, in “recognizing the impact of the additional requirements on small businesses … [the Rule] exempts financial institutions that collect information on fewer than 5,000 consumers from the requirements of a written risk assessment, incident response plan, and annual reporting to the Board of Directors.” So, the rule has specific parameters in mind, and it is important to know how many consumers a dealer maintains information for, and how long they are keeping this information.

If, for example, a dealer keeps retail installment contracts for 10 years and finance an average of 40 cars a month, they would be retaining the information of 4,800 consumers, which is under the limit, if all applicants were approved.

However, it is very unlikely that every applicant was approved. Since dealers must also keep applications for denied credit for 25 months, they would have to add those into 32

the number. If the dealer averaged just 10 denied applications per month, they would have information on a total of 5,050 consumers and be over the limit.

Blankenship emphasizes that this is a “very low number that is going to impact a lot of dealers in Texas.

5,000 consumers encompass a lot of smaller and medium-sized dealers.” There seems to be a wide gap between what the FTC considers a small business and what dealers consider a small business, in terms of how the changes to official policy will affect the operations of many dealerships in the state.

The Bottom Line

The amendments to the Safeguards Rule are complicated in theory and in practice. This article only takes a bird’s-eye view of the Final Rule and what automobile dealers need to know about the consumer safeguards it requires. To give dealers a more complete understanding of the Safeguards Rule, This month TIADA is launching a new online on-demand safeguards course though it’s

Dealer Education Portal. This course meets all the FTC training requirements and includes sample policies and forms. It’s designed specifically for dealers and their employees.

TIADA intends to make the course available nationwide.

James Dempsey, Executive Director of the Berkeley Center for Law & Technology, writes for the International Association of Privacy Professionals that the “degree of uncertainty” in cybersecurity laws might be “unavoidable, given the complexity of our cyber systems and the inventiveness of the bad guys, but it sure must be frustrating on the front lines.” Yet automobile dealerships will need to do their best to understand these amendments to the Safeguards Rule and act as soon as possible to protect themselves from enforcement actions and potentially expensive lawsuits for failing to comply. Dealers will need to update and maintain their policies in line with the new consumer safeguards now and in the foreseeable future.

Please Welcome Our Newest TIADA Members DEALER MEMBERS CM AutoGroup

Sheridan Morgan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22426 Theodoli Dr, Katy, TX 77449

Del Rio Motors

Art Mendez . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 616 E. Main St., Fredericksburg, TX 78624

DriveSimple

Jacob Maude . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200 S Edmond St, Taylor, TX 76574

Ejs Tire Shop

Edgar Castillo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1138 Freeport St, Houston, TX 77015

Htown Automotive Group LLC DBA Drive Max

Irfan Siddiqui . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3907 Irvington Blvd, Houston, TX 77009

Kevin’s Classic Cars

Thomas Yankovoy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 620 Wayside Drive, Wimberley, TX 78676

Olmos Auto Sales LLC

Raquel Olmos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11513 Confederate Rd, El Paso, TX 79936 Ucarguy, LLC Raul Velez . . . . . . . . . . . . . . . . . . 5025 Addison Circle Dr., Unit 3426, Addison, TX 75001

ASSOCIATE MEMBERS CarDog, Inc.

Rick McLey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 W Jefferson, Suite 201, Pheonix, AZ 85131

Customized Dealership Financial Solutions

Richard Tucker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5415 Maple Ave, Suite 351, Dallas, TX 75235 T e x a s

D e a l e r

February 2022

feature

The Ultimate Guide for Automotive CRM

by Zach Klempf

CEO of Selly Automotive

E

very aspect of the auto industry has changed in the last decade. Inventory, sales, compliance, financing, and even service departments have been turned upside-down. Most importantly, the customer buying journey has changed. That means your toolbox needs to change, too.

Customer relationship management platforms, or CRMs, are absolutely essential in today’s highly competitive dealership industry. But not just any CRM will do. You need to use the right CRM for your dealership.

That’s what this article is all about.

Small and mid-size dealerships, in particular, often struggle with choosing the right CRM. That’s because they don’t think they need one. “I’m too small to use a CRM,” they say, “I can handle it myself.” Are you sure about that?

Here’s the problem: Customers don’t care whether you’re a national dealer group or a small independent.

They expect an exceptional sales experience no matter what. And to deliver that experience consistently, you need a CRM. In this article, we’ll explain why every dealership needs a CRM. Then we’ll show you what to look for when choosing the right CRM for you.

CRMs do more than store contact information. They are the central nervous system of every successful sales program. If you’re ready to transform your dealership, let’s get started.

What’s an Automotive CRM?

There are hundreds of CRMs on the market today, but dealerships should use a CRM built specifically for the automotive industry.

An automotive CRM is a customer service, sales, and marketing platform designed for the unique buying journey of car customers. Most automotive CRMs integrate with existing Dealer Management Systems (DMS) to eliminate the need for duplicate entry of customer data.

There are four primary benefits of an automotive CRM (and many others we’ll list later on):

Lead Management – Keep track of sales leads

no matter where they come from: online, over the phone, third-parties, or walk-ins.

Lead Nurturing and Generation – CRMs let you

be the first to respond to new leads with features like Auto Responder or Auto Reply.

February 2022

T e x a s

D e a l e r

Improved Communication – CRMs help you keep

track of all customer touchpoints, whether by phone call, text, or email.

Transparency and Reporting – Follow every deal

from beginning to end to optimize your sales process. View and record each sales conversation, track KPIs, and measure the ROI of individual marketing channels.

With an automotive CRM, dealerships can automate and organize their sales, marketing, and customer service processes—and ultimately, sell more cars.

Benefits of Automotive CRMs

The largest dealer groups already understand the value of using a CRM. However, small and mid-sized dealerships don’t always see it. The truth is, no dealership can thrive today without a CRM to manage their business.

Using an automotive CRM can mean the difference between a record sales month and going out of business.

Here are some key benefits that a good CRM solution provides.

Organize Contacts and Leads

Dealerships get leads from numerous sources: website forms, third-party lead providers, their OEMs, online ads, offline ads, and old-fashioned walk-ins. CRMs let you store all your contacts in one place, and also track where the leads came from. Over time, you can see which channels produce the best results.

CRMs also help you track conversations over the course of days, weeks, and even years. You’ll have an entire conversation history for each contact, right at your fingertips.

Act Fast on New Leads

According to a study by the Harvard Business Review, salespeople who contacted a lead within one hour were seven times more likely to qualify them, and 60 times more likely than those who waited over 24 hours. Some CRMs have auto-reply features so that no contact goes unacknowledged while you are busy with other tasks.

Organize Your Sales Team

You need to know how many cars are being sold and who on the team is generating those sales. CRMs generate reporting that can help your sales team with 33

forecasting, setting quotas, and tracking performance.

Streamline Communications

CRM platforms with text, email, and call management features let you document every interaction with your lead, whether they call, email, text, or walk-in. You don’t have to try to recall conversation details when you can pull the record from the CRM.

Maintain Compliance

Keeping dealership/customer communications TCPA-complaint can be time-consuming, but not doing so could be even more costly.

TCPA—the Telephone Consumer Protection Act—is a 1991 law that prohibits companies from sending any form of unsolicited communication to customers via telephone technology. That means you must get the customer’s consent to continue communicating via phone calls, text messages, or email. You

must also honor their request to cease contact (opt-out), too.

Offer Credit and Financing Options

Some CRMs let you pre-approve customers with soft credit pulls.

With credit information in hand, salespeople can quickly put customers in the right vehicle. Soft pulls have no impact on a customer’s credit score, so they’re an easy sell.

Optimize Your Marketing Spend

Do you know which marketing channels are most effective? In a tightening economy and increased competition, dealerships large and small must make every marketing and advertising dollar count.

By tracking the source of new leads, CRMs help dealers figure out their highest- and lowest-performing marketing channels. Some CRMs even let you run custom reports to share with your team.

Key Features of an Automotive CRM

.

Every dealership is a little bit different, and so is every CRM. You don’t just want to copy the guy down the street. You need to choose the tool that’s best for you.

That said, we’ve used a lot of CRMs in our day. We know what works and what doesn’t. The best CRMs have a core set of features that make you more efficient, productive, transparent, and consistent.

Here are the key features to look for when evaluating automotive CRMs: Easy Onboarding and Training

DMS Integrations

Voice and Text Management

Automated Email Replies

Appointment/Task

Management

Easy Onboarding and Training

If an automotive CRM is cumbersome, clunky, and difficult to 34

T e x a s

D e a l e r

February 2022

learn, your sales team won’t use it. They have enough on their plate apart from navigating a complicated new tool. It’s critical that your automotive CRM is easy-to-use and comes with a robust onboarding/ training resources.

First, look for a CRM that has a modern, intuitive user interface. It should feel familiar to your salespeople, whether they’re young rookies or industry vets.

Second, the CRM vendor should offer comprehensive onboarding and training. The best CRMs will walk you through the onboarding process to ensure you’re setup for success. You and your team should have access to help guides and learning libraries for ongoing training.

Choosing a CRM without a strong training program could spell disaster for your team. This is a critical, but often overlooked feature of a good automotive CRM.

DMS Integrations

CRMs track sales opportunities and processes, while DMS systems are used for desking, accounting, and inventory management. Dealerships need to seamlessly move opportunities from their CRM to their DMS when they are ready to close deals. Ideally, your CRM of choice will integrate with your DMS. But what if a CRM doesn’t integrate with your DMS? It’s not the end of the world, especially for small and mid-sized dealerships. The benefits of a CRM far outweigh the occasional chore of transferring data over to your DMS.

Voice and Text Message Management

Whether you’re a one-man show or you run a team of salespeople, your sales process needs to be systemized. CRMs with built-in voice and text messaging management go a long way toward that goal. They help dealerships maintain transparency, consistency, and accountability on their sales teams.

When evaluating CRMs, make sure the platform can: Track and record phone calls made through

the platform Assign follow-up tasks

Route incoming calls directly to the sales rep

handling the deal Keep the dealership TCPA-compliant with opt in/opt-out messaging consent Enable customers to text the dealership direct ly from your website Automate messages

Create templates for common customer

messages Store recorded phone calls for use in sales training

February 2022

T e x a s

D e a l e r

No more looking for pieces of papers or rifling through file cabinets. Keep all customer communication in one place: your CRM.

Automated Email Replies

Email replies will help you streamline customer communication even further. Setting up automated email replies will allow your team to respond quickly when leads make contact—a critical factor in winning the sale.

Mobile and Desktop Platforms

You don’t run your dealership from your desk.

You’re on the sales floor, out on the lot, and at auctions buying the best inventory. That’s why dealerships should invest in automotive CRM that has both mobile and desktop platforms.

You need a CRM that can be accessed from anywhere—on a Mac or Windows computer (desktop or laptop), tablet, or mobile phone. Cloud-based CRMs with mobile and desktop apps ensure your information is saved across all devices. No data reentry necessary.

Market channel analytics

If your dealership has multiple lead generation sources (Dealer.com, AutoTrader, etc.), you can’t afford to guess how these sources are performing.

Choose a CRM with a marketing channel analytics dashboard, so you have a complete picture of all of the dealership’s lead sources.

Look for a CRM that produces clear, concise, and easy-to-understand marketing analytics. It should include these specific features: Compare marketing channels by the quality and

cost of leads Customizable dashboard to your fit your

business View sales trends on a monthly and yearly basis.

Monitor sales team performance (individually

and as a dealership)

Appointment and Task Management

Find a CRM that allows you to manage all meetings and tasks associated with the deal in one place. Sales staff can track the status of the deals they’re working on, and sales managers can review the status of every deal in the shop on the feature dashboard.

CRMs keep your team on track with every deal, ensuring follow-ups and lead information never fall through the cracks.

A more detailed version of this ultimate guide appears at www.sellyautomotive.com/guides.

35

feature

How to Recruit Automotive Technicians Effectively in 2022

by Sara Kerwin

Director of Marketing, WrenchWay

D

ealerships are having a heck of a time trying to find technicians to hire. Not only are we working against a national technician shortage, but less than 5% of technicians are actively looking for jobs.

As shortages will likely continue as the year goes on, it is important to stay ahead of the curve and try implementing new strategies for hiring automotive technicians.

WrenchWay has three critical recommendations for keeping your business competitive in recruiting these professionals:

Get More Applicants by Recruiting Passive Candidates

For many of the dealerships we talk to, the bulk of their recruiting strategy revolves around posting on job boards. Let’s think about that for a second. Who is on job boards? People who are actively looking for a new 36

job. That means the bulk of dealership recruiting efforts are missing out on 95% of technicians.

Before we get into how dealerships can get in front of technicians who aren’t actively looking for jobs, let’s first get a better understanding of who these techs are.

What are Passive Candidates?

The bulk of technicians out there are what we consider “passive candidates.” Passive candidates are not actively looking for a new job. However, research shows 85% of employed professionals are open to switching jobs.

Obviously, it takes more work and time to recruit passive candidates, as these technicians are not hanging out on job boards. However, with the right recruiting strategy, dealerships can start to get in front of these technicians and be top of mind when these candidates are looking to make the switch.

T e x a s

D e a l e r

February 2022

How to Use Passive Recruiting to Recruit Mechanics Don’t Focus So Much on Hiring

Since finding a job is not a top priority for passive candidates, seeing that you’re hiring isn’t going to catch their attention. Instead, focus on the cool things that make your dealership unique and a great place to work. Some ideas could include: Sharing pictures of new equip ment and tools on social media Posting videos of technicians

working on fun repairs Highlighting unique perks or

benefits your dealership offers (i.e., no weekends, catered lunches, etc.)

Leverage Social Media

Of course, most of your social posts are targeted at your customers. However, you should be sharing content showing technicians (and your customers) that your dealership is a great place to work.

Posting video content (more on that later) is a great way to highlight what makes your dealership unique. In fact, video content on social media gets 1200% more shares than text and image content. Plus, if you’re creating videos featuring your employees, they will be more likely to share it with their social network—which brings us to our next point:

Video for Recruiting is Easy—Get Started Guide

Video has become an incredibly important part of recruiting in every industry, and the automotive and diesel industries are no exception. In fact, in a recent WrenchWay Insiders poll question, 85% of technicians say they think video helps them to determine if a shop is a good fit for them.

Unfortunately, the automotive industry isn’t exactly leading the way when it comes to its recruiting strategies. Before we dive into some of the easy ways dealers can recruit with video, let’s first look at why dealerships are slow to adapt to video recruiting.

Why is Video Intimidating?

Twenty years ago, incorporating video into your business strategies was a lot more complicated.

Thankfully, technology has made this a lot easier to accomplish.

Unfortunately, many people are still hanging onto those old ideas that it takes a lot of time, money, and

February 2022

T e x a s

D e a l e r

Myth #1 — You need fancy equipment to create videos.

Wrong! Smartphones today are all equipped with some of the best cameras around, and this is all you need to create any sort of video for recruiting.

Myth #2 — You need video editing software.

According to our WrenchWay Insiders, 97% of technicians prefer unscripted, authentic videos versus corporate recruiting videos. This means editing should be kept to a minimum, and any editing that does need to be done, can probably be accomplished with free editing tools on your phone or computer (i.e., Windows Video Editor or iMovie).

Myth #3 — You need to hire someone to create videos.

Again, because smartphones have made it so easy to create and edit videos, there’s really no reason to hire someone outside of your

600+ EVERY THURSDAY 9AM 5 LANES DAAOKC.COM 1028 S PORTLAND OKC 405/947/2886

Give Technicians ALL the Information About Your Dealership Before They Apply

Technicians who are only passively looking for a job are not going to put the time and effort into applying and interviewing for a job just to find out if the job is a good fit for them. They want to be confident the dealership is a good fit before they apply, which means dealerships need to make all the information techs want to know available somewhere online.

resources to create videos.

Here’s a quick list of some of the myths about video creation:

Buy Online at EdgePipeline.com

RE MO Y !!

N MA ORS N G SI CON

GSA RUNNING ONCE A MONTH GOTO DAAOKC.COM FOR SALE DATES

37

dealership to create recruiting videos for you. Recruiting videos don’t need to be TV commercial-quality. They just need to be authentic.

Myth #4 – Creating videos is too time-consuming.

More great news about video... People prefer short videos! It should take no more than 10 minutes to record a quick 2–3-minute video. (And that’s assuming there are some outtakes!)

Easy Videos to Create to Recruit Technicians

The most important thing to remember is that only about 5% of technicians are actively looking for a job. This means that a standard “Come work for us!” video is probably not going to catch the attention of most technicians. So, what videos can your dealership create to get in front of the 95% of technicians that are only passively looking at new opportunities?

Try thinking of non-recruiting videos that technicians would just be interested in watching. Here are some examples: Show off cool equipment or tools

Have technicians show fun projects they’re working on

Give a shout out to one of your technicians and share

a story of something they did recently to go above and beyond Give a quick tour of your dealership’s shop

In summary, don’t TELL technicians why they should work for you. SHOW them why they should work for you.

And, like anything else, the hardest part is getting started— you just need to take the first step!

Why Dealerships Should Put Salary in Technician Job Postings Writing an automotive technician job posting that entices candidates to apply is no easy task. Often, one of the biggest sticking points for many dealerships wanting to hire technicians is, “Should I include salary in technician job postings?”

The quick answer: Absolutely.

Dealerships Not Posting Salary Range are Missing Out on Qualified Techs

Recently, we were working with an independent shop to recruit for an automotive technician position. When we wrote the initial job posting, the shop did not want us to include the salary range in the job details, so the job went up without it.

When techs started reaching out to us about the open position, they asked about the salary range (like they always do). When we couldn’t provide them with an answer, more than half of the techs stopped talking to our recruiters. And 38

that’s just the techs that made the effort to reach out and ask.

Think of how many didn’t reach out in the first place.

We estimate that by not including salary range in your job posting, you’re decreasing your pool of applicants by approximately 75%.

We reached out to the shop and let them know what was going on. By not including the pay range in their job posting, they were significantly decreasing their applicant pool and missing out on qualified techs. The shop agreed to give it a shot and add the salary range into the job posting.

As a result, we received several qualified applicants within a few weeks that we were able to pass onto the shop to interview.

We’d love to say that this is an isolated occurrence but, really, this is the norm.

Techs Want to Know Salary Before They Apply

LinkedIn recently did a survey in which they asked 450 users to look over an example job posting. They created a heat map to show which parts of the job posting captivated them the most. Pay and benefits information topped the list, attracting most respondents immediately.

This should come as no surprise. In fact, 61% of candidates say salary range is the most important part of a job posting.

Pay transparency has become increasingly important to job seekers, and why shouldn’t it? Why waste time applying for a position you aren’t sure can meet your financial demands? We have found that the main reason dealerships don’t want to post salary range is because they aren’t sure if the salary they are offering is high enough, so we wanted to share some tips for how to determine how much to pay your technicians.

Tips for Determining Salary Range for Your Technicians

When we work with shops and dealerships to recruit technicians, we look at a number of factors to help them determine the salary range to offer techs that is both competitive and doesn’t blow their budget.

Here’s what we recommend: Evaluate the local competition, and make sure your sal ary range falls into the top half of what you’re seeing Know what the tech needs to produce, at the agreed

upon salary, to pay for themselves Don’t base pay off of what other techs in your dealership

make Ultimately, what it comes down to is the majority of shops and dealerships are feeling the effects of the technician shortage and need to take advantage of every competitive advantage they can get. If including a salary range in your job postings is all it takes to more than double your number of qualified applicants, isn’t it worth it?

T e x a s

D e a l e r

February 2022

From Inventory Acquisition to Tracking Service Department Metrics – Getting and Selling the Right Vehicle is the Bottom Line

Dealer Academy Presenter

This workshop is uniquely designed to cover the service department essentials that will increase your bottom line. You will also find out how these practices are being implemented in various dealerships around the state.

Brent Carmichael,

Executive Conference Moderator, 20 Groups.

NCM Associates, Inc. (with a Dealer Panel)

Time

9:00am - 4:00pm

Cost

$249 Members, Each Additional $199

(must be from same dealership)

Crowd favorite Brent Carmichael with NCM Associates will share his service knowledge covering points that include: • Inventory acquisition • Finding/Hiring/ Training Technicians • Reconditioning – Step-by-step • Tracking Metrics process • Best practices from – Internal vs. service department subletting 20 groups Wrap up the day with an interactive Q & A session with a panel of top dealers in Texas that will share how these practices are being implemented at their dealerships and will walk you through their process of getting vehicles from the auction to the frontline.

$499 Non-members

Sponsored by:

Monday, April 4, 2022 Arlington, Texas Crowne Plaza Arlington 700 Avenue H East | Arlington, TX 76011 817.394.5000

Contact

patty.huber@txiada.org

for educational seminar sponsorship opportunities February 2022

T e x a s

D e a l e r

To register visit

Txiada.org or by phone at 512.244.6060.

39

EPI-TIADAhalf FEB2022.pdf

1

1/10/22

3:18 PM

C

M

Y

CM

MY

CY

CMY

K

40

T e x a s

D e a l e r

February 2022

feature

TxDMV Collaborates with Law Enforcement to Curtail Unlawful Use of Temporary Vehicle Tags

by Texas Department of Motor Vehicles

S

topping the fraudulent production and use of working with local law enforcement to embed TxDMV temporary tags is the top priority of the Texas investigators in operations around the state to help Department of Motor Vehicles (TxDMV). identify the illegal sale and use of temporary tags as Addressing this serious issue requires the ongoing colpart of criminal investigations. TxDMV welcomes any laboration of law enforcement, TxDMV staff, and state opportunity to work with law enforcement at all levels and local leadership. of government across the state as they pursue investigaCriminals are obtaining vehicle tions into motor vehicle crimes. dealer licenses to fraudulently issue “The Texas Department of Motor “The Texas temporary tags to vehicles used in Vehicles is grateful for the ongoing illegal activities in Texas and across cooperation and engagement of law Department of the country. Some use the fraudulent enforcement agencies across the state tags themselves, while others sell tags to combat the fraudulent use of temMotor Vehicles through social media or in-person porary tags,” said TxDMV Executive is grateful for deals.

Director Whitney Brewster. “My staff TxDMV is pursuing initiatives on and I are committed to working with the ongoing multiple fronts to combat this illegal law enforcement in every way we can cooperation and behavior. The most significant of to end this illegal activity.” which is the continuing considerBeginning in calendar year 2021, engagement of ation and adoption of administraTxDMV dealer licensing and entive rules necessary to implement forcement staff began reviewing law enforcement the provisions of House Bill 3927, licensing application records to agencies across passed during the 87th Regular verify existing licensed dealers and Legislative Session. The bill provides refer specific concerns to local law the state to the authority for TxDMV to limit the enforcement for potential criminal number of temporary tags available investigations. TxDMV staff is also combat the to licensed dealers and terminate able to use the information collected fraudulent use of access to temporary tags when the from these reviews to take admindepartment identifies licensed dealistrative action to reduce access to temporary tags. ers are involved in fraudulent activitemporary tag systems when approMy staff and I are ties. The TxDMV Board will consider priate and allowed by law. these rules for immediate adoption Many of these joint law enforcecommitted to at its upcoming special meeting on ment operations are funded by the January 27.

Motor Vehicle Crime Prevention working with law As part of regular department opAuthority (MVCPA), a division of enforcement in erations, TxDMV works closely with TxDMV governed by a separate local, state, and federal law enforceboard. MVCPA awards grants to emevery way we can ment to stop criminal activity related power local law enforcement agento temporary tags. Collaboration cies and multi-agency taskforces to to end this illegal with the Texas Department of Public combat and prevent motor vehicle activity.”

Safety and the Montgomery County crimes. MVCPA taskforces work in Sheriff ’s Office recently resulted in local communities to stop criminal Whitney Brewster, numerous arrests in Montgomery activities and educate citizens on auTxDMV Executive Director tomotive crime prevention.

County. The department is also

February 2022

T e x a s

D e a l e r

41

23 LOCATIONS

We Love Doing Business With You! Atlanta, GA

Chicago, IL

Interstate 94, MI

Pittsburgh, PA

Austin, TX

Dallas, TX

Jacksonville, FL

St Louis, MO

Baton Rouge, LA

Detroit Toledo, OH

Kansas City, KS

Tulsa, OK

Birmingham, AL

Greenville, SC

Lancaster, PA

Virginia Beach, VA

Boston, MA

Harrisburg, PA

North Houston, TX

West Michigan, MI

Bowling Green, KY

Houston, TX

Pensacola, FL

4

Austin

LOCATIONS IN TEXAS

Dallas

TUESDAYS & THURSDAYS AT 1PM 219 N. Loop 12 Irving, Texas 75601 Phone: 972.445.1044

TUESDAYS & THURSDAYS AT 1PM

16611 South IH 35, Buda, Texas 78610 Phone: 512.268.6600 Houston

THURSDAYS AT 1:30PM

1826 Almeda Genoa Rd, Houston, Texas 77047 Phone: 281.819.3600

Auction Credit is located within each of our Texas facilities for all of your auction financing needs. www.auctioncredit.com

North Houston

TUESDAYS AT 1PM

1440 FM 3083 Conroe, Texas 77301 Phone: 936.441.2882

feature

Stop the Bleeding: Five Ways Your Dealership Might be Killing Your Employee Retention

by Matt Wadiak

President and CEO of AutoStaff

D

ealership sales can be a rewarding—and profitable—career path, but it’s not an easy one, and finding great sales professionals can be difficult in a tight job market. Worse, once many dealerships make the hire, they wonder why their employee turnover is out of control as they start the search yet again for a new batch of salespeople.

I’ve spoken with hundreds of dealers and GMs across the nation, and I’ve found that there are five areas where dealerships are chasing away employees and not even realizing it. When their sales teams come up against these obstacles, they’ll often look for easier ways to make a living in other fields.

While any of these practices can be deadly to employee retention, some dealerships bundle them all together and wonder why they can’t keep good employees. Let’s

February 2022

T e x a s

D e a l e r

look at some ways a dealership can focus less on hiring new employees and more on building their team.

Update Pay Structures

Many dealerships are still using the same pay plans as they did in the 1990s. After all, if it’s not broke, why fix it? The problem is that many dealerships’ pay structures are broken. When salespeople first start out, the vast majority are going to have rough months before they find success.

If they are supporting a family, how long are they going to be able—much less willing—to work primarily for commissions that aren’t yet coming? There’s nothing wrong with providing some stability to keep desperation away and let them learn the skills they need to prosper. Giving a salesperson a salary plus commission still 43

promotes productivity and allows the stars on your staff to shine, but it also gives new hires a fighting chance to stay in the game and see what they can do.

Build Better Schedules

In a commission-based job, working more hours means having more opportunities to build that month’s numbers and pad that paycheck, right? Not necessarily. Many dealerships offer no flexibility in hours, asking their salespeople to work from 9 a.m. to 9 p.m. By the time customers come into the dealership after getting off work, the salespeople are already tired and probably not at their best.

Studies have found that the first four hours on the job are usually the most productive. When customers come in during your salesperson’s eighth or ninth hour, they’re not going to receive their best presentation. Look at your employees’ schedules and ask what

hours and days work best for them.

You’ll build loyalty as your team builds sales.

Allow a Life/Work Balance

Millennials get a lot of flak because, as a group, they are not as motivated by money as older generations might have been. They value having a balance between their career and their lives, and don’t really want to go down a road where 80hour weeks are the norm, no matter how big the paycheck. And other generations are realizing that they have a valid point.

There are ways to build sales without working a staff into the ground. Find ways where your dealership can assist your team in “working to live” rather than “living to work” and everyone will be better off.

Manage Your Management Many managers come up through the sales ranks, taking

resource guide The TIADA Website: www.txiada.org

Members can log in with their username/password and access our Dealer Member Directory, Legislative Action Center, Compliance Consultation Service and much more. Register for all upcoming TIADA events online through the Calendar of Events, access our online membership application, find contact information for all our Local Chapters, and access many additional resources through our Knowledge Base.

License Renewal Certificate

TexasDealerEducation.com

Texas Department of Motor Vehicles 888.368.4689 www.txdmv.gov 44

Office of Consumer Credit Commissioner 800.538.1579 occc.texas.gov

Texas Comptroller

800.252.1382 comptroller.texas.gov

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

leadership positions because that’s their next chance for career advancement. They’ve proven they can sell, but can they manage a team? Sales ability and a talent for leadership are two very different skill sets. Can one person have both? Absolutely. Does a great salesperson have a great management style out of the box?

Probably not. Dealerships taking the time to train the people who are going to be leading their teams have a much better chance of building success and retaining those teams for the long run.

Provide Proper Training

Far too often, new sales hires are given a crash course on the dealership’s methods and are thrown into the deep end. While some learn to swim, others sink beneath the surface and find other, calmer waters to make their living.

Training salespeople and bringing them on board should be looked at as preparing to climb a mountain. If they aren’t acclimatized to each level of the process and get used to the air, they are being set up for failure. New salespeople need to be shown the proper way of greeting the customer, learning their needs, and then finding and presenting the right vehicle, as well as closing the deal and appropriate methods of following up. Dealerships that don’t put emphasis on training will find themselves in a constant state of turnover and hiring.

Generating an atmosphere where a sales staff can prosper requires an ongoing effort, but by addressing these five areas, you should notice an immediate increase in employee retention. While other dealerships actively run off their team members, your business will be the one salespeople seek out to build their careers.

A version of this article first appeared at www.autostaff360.com.

T e x a s

D e a l e r

February 2022

W hy Choose Us?

Visit Us Online for Customized Solutions & Helpful Insights

M U L L ENINSU RANC E.C O M

F e a t u r e d I n s u r a n c e S o lu t io n s 8 00- 7 8 3 - 6 29 7 - T O L L F R E E ( 9 7 2) 6 8 1- 6 29 7 - L O C A L INF O @ M U L L ENINSU RANC E.C O M

behind the wheel Over the Next Five Years TIADA Will…

L

ast month the TIADA Board approved a new fiveyear strategic plan that will guide the association going forward. This is our fourth such plan in the last 15 years. The board and staff spent hours discussing the current business, economic, and political environment. We reviewed our current performance in key areas so we could set benchmarks. Ultimately, we did our best to predict the future. The board approved a plan that calls for responsible growth in five areas with a clear undertone of increasing member engagement.

This strategic plan is not just between the board and the staff or a document that should be put on a shelf until next year. This plan is about ensuring the association is successful for years to come, and I am a firm believer that associations are successful when its members are successful. As such, you are a big part of this plan. Over the next five months, I will discuss in more detail each supporting goal, our current benchmarks, the strategic plan, and action items we have developed to help us get to our goals, the role you can play to help, and finally how it will make you and your association more successful.

Below you will find the overarching goal and supporting goals for the TIADA Five-Year Strategic Plan 2022–2027.

Overarching Goal:

Over the next five years, TIADA will ensure that the independent car dealers in Texas have a significantly increased role in the legislation and rule-making that

Jeff Martin by

TIADA EXECUTIVE DIRECTOR

affects their industry, increase the brand awareness of the association with potential and current independent dealers and associate members, and ensure the continued stability of the leadership and staff.

Supporting Goals:

Goal #1 Obtain a membership representing 75% of all used vehicles sold by independent dealers in Texas.

Goal #2 Increase member engagement in legislative efforts by 10% annually.

Goal # 3 Increase dealer member engagement by 20% annually.

Goal #4 Increase non-dues revenue by 2.5% annually and ensure that no segment of the non-due’s revenue is greater than 50% of the total.

Goal #5 Enhance digital marketing and communication strategy, including an 18% increase in organic users at txiada.org and 10% increase in total social media followers, while maintaining a social media engagement rate at or above 5%.

I will see you right here next month as we focus on supporting goal #1. Of course, if you can’t wait until next month, you can always give me a call. I will be happy to send you a copy of the entire plan and discuss it in much more detail.

This plan is about ensuring the association is successful for years to come.

46

T e x a s

D e a l e r

February 2022

TEXAS INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION 9951 Anderson Mill Rd., Suite 101 Austin, TX 78750

PRSRT STD

U.S. POSTAGE

PA I D

JEFFERSON CITY, MO

PERMIT NO. 210

INTEGRATED INVENTORY SOLUTIONS: MARKETPLACE | ASSURANCE | RECONDITIONING | FLOOR PLANNING | LOGISTICS | DECISIONING

BETTER, FASTER

TEXAS WHOLESALE The nation’s leading provider of end-to-end wholesale vehicle solutions never stops working for you. Whether you work in-lane, online or both, Manheim is here to help you be more successful — with better, faster, seamless wholesale tools that independent dealers love.

VISIT OUR TEXAS LOCATIONS Manheim Dallas, Manheim Dallas-Fort Worth, Manheim El Paso, Manheim Houston, Manheim San Antonio, Manheim Texas Hobby