Texas Dealer March 2021

Then and NOW: Women of TIADA

Also in this issue: – Michael W. Dunagan on Selling to Minors – How a New Funding Model of Securitization Creates More Capital – Zero Emissions Effect on The Independent Auto Industry – CFPB, The Roadmap Forward — Part One

TIADA Board of Directors PRESIDENT Robert Beck/Stop N’ Drive Motors 711 N. General McMullen Dr. San Antonio, TX 78228 PRESIDENT ELECT Mark Jones/Mike Carlson Motor Company 264 Exchange Burleson, TX 76028 CHAIRMAN OF THE BOARD Juan Sabillón/Mi Tierra Auto Sales 7935 Gulf Freeway Houston, TX 77017 SECRETARY Ryan Winkelmann/BJ’s Autohaus 5005 Telephone Road Houston, TX 77087 TREASURER Eddie Hale/Neighborhood Autos 1717 US 287 Decatur, TX 76234 ICE PRESIDENT, WEST TEXAS V (REGION 1) Brad Kalivoda/Fiesta Motors 2599 74th Street Lubbock, TX 79423 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) Vicki Davis/A-OK Auto Sales 23980 FM 1314 Porter, TX 77365 ICE PRESIDENT, CENTRAL TEXAS V (REGION 5) Greg Phea/Austin Rising Fast 8024 IH 35 North Austin, TX 78753 ICE PRESIDENT, SOUTH TEXAS V (REGION 6) Armando Villarreal/McAllen Auto Sales 4215 S. 23rd Street McAllen, TX 78503 ICE PRESIDENT AT LARGE V Robert Blankenship/Texas Auto Center 6809 N IH-35 Austin, TX 78744 ICE PRESIDENT AT LARGE V Russell Moore/Top Notch Used Cars 900 East Davis Conroe, TX 77301 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 s s u e 3 / M a r c h 2 0 21

TexasDealer contents

4 Officers’ Message

by Juan Sabillón, TIADA Chairman of the Board

8 TIADA Auction Directory 2021 11 Legal Corner: Avoid Sales to Minors

by Michael W. Dunagan

13 Membership Corner 13 Local Chapters 13 Upcoming Events 14 Zero Emissions Effect on the Independent Auto Industry

by Micheline Baida

17 TIADA Scholarship Application 19 Legislative Bulletin 20 New Members 22 Securitization: Unique Funding Model Creates More Capital

by Patrick Fortner

24 2021 TIADA Conference & Expo 30 On The Cover: Then and Now: Women of TIADA

by TIADA Staff

35 TIADA Member Application 37 CFPB, The Roadmap Forward

by Texas Dealer Staff

41 How Women Consumers are Modernizing Car Dealerships

by Women-Drivers.com

43 Shifting Diversity into High Gear

by Deloitte Insights

46 Behind the Wheel

by Jeff Martin

Did You Know? You can now register to

attend the 2021 TIADA Conference & Expo. Turn to page 24 for information or register online at TiadaAnnualConference.com.

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: Teresa Orkun

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

officers’ message

by Juan

Sabillón

2021: How to Stay Relevant

W

hether you’ve been an independent automotive dealer for 30 years or 30 minutes, you likely chose this business for similar reasons.

Dealers jump into this high risk business in hopes of a generous reward in exchange for their risk and liability.

Our members are courageous small business owners that believe there is immense opportunity in this industry. That belief is core to who we are as a group, and as individual dealers, but maybe today you’re questioning that belief.

As I write this, many of you are questioning what you forecasted for 2020 and now even more of us may be uncertain of what 2021 holds. My hope is to leave you with some questions that you can then develop into action items for your team. In the last few months, I have spent a significant amount of time visiting with many dealers and vendors around Texas.

I have been asked a lot of questions, but the driving question is “What’s trending?” or “What will happen in 2021?”

Dealers and service providers alike are trying to figure out what the “next right thing” is. What should they do next? What can they do next?

My dealer friends used to say, “That’s old news. We’ve seen this cycle before!” But no one has seen this cycle.

Mi Tierra Auto Sales (Houston) TIADA CHAIRMAN OF THE BOARD

We all agree that change is normal and the industry experiences feast and famine. However, the velocity at which we are now experiencing change is unprecedented. Beyond acknowledging those changes, we have to learn to anticipate them to the best of our ability. As we kick off 2021, we have to look beyond, way beyond. As the environment around us changes ever more quickly, what must we do to remain relevant?

In the last year we have seen technological advances and products far beyond what we anticipated.

In this new environment such advances will only gain momentum and we need to be ready for it. The regulatory environment will also look different with a new administration. With that said, here are a few key questions I like to ask my team: What are we doing with regard to investing

technology into our business?

Where are we going to get capital?

Is our web presence optimized for mobile

devices?

Are we using our customer retention tools

correctly?

Do we have policies and practices in place to

mitigate risk?

Are we efficiently and effectively staying

(cont’d on pg. 6)

Dealers and service providers alike are trying to figure out what the “next right thing” is. What should they do next?

What can they do next?

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March 2021

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compliant with all state and federal law?

“I think so” is the answer I often get to these questions, which typically means “probably not.”

In order to be relevant in the future, we need make sure we are asking these questions and many more. Most importantly we need to make sure we are “Doing Right Things Right.”

For me that means focusing on our customer. If our customer is going to shop for a vehicle on their phone, we need to be there.

If they want vehicles delivered, we need to explore that option.

If our policies are customer centric, we will mitigate a lot of risk. And last and maybe most importantly, I want to be educated. We will lean on our association to help keep us compliant and build programs that will allow us to network with other dealers.

Our best chance for success in this business is to remain a unified body of members, one that I am always proud to represent.

There is a distinct difference in the thinking of a dealer who is informed and engaged in the independent used car business community.

As we put plans in place to get 2021 started off on the right path and stay relevant, what kinds of questions are you asking yourself ?

Time to renew your dealer’s license?

AgoraData.com/BHPHsuccess *These terms are solely indicative, confidential, are not binding, and are subject to change. © 2021, Agora Data, Inc. All rights reserved.

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TexasDealerEducation.com T e x a s

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March 2021

Your Membership just got

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Tap on Texas IADA Vendor Coupons for non-auction discounts.

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TIADA Auction Directory 2021

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: Terrie Smith 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: Rich Levene 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: Chris Dean 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: John Swofford 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: Joshua Boyd 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: Robert Brown 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

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

$AVE : up to $200 Sell Fee

Harlingen/McAllen

MANHEIM HOUSTON

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.

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 : $200

$AVE : $100

Houston

Longview ALLIANCE AUTO AUCTION LONGVIEW

ADESA HOUSTON

www.adesa.com 4526 N. Sam Houston, Houston, TX 77086 281.580.1800, Fax 281.580.8030 GM: Angela Williams 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: John Swofford 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

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: David Cooper 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: Lori Davee 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

$AVE : $75/Quarterly

Lufkin

Midland Odessa IAA PERMIAN BASIN*

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

$AVE : up to $200 Sell Fee

ONLINE ACV AUCTIONS**

www.acvauctions.com 800.553.4070

$AVE : $250

E-DEALERDIRECT**

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: Brian Sell 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

Waco

IAA HOUSTON*

LUFKIN DEALERS AUTO AUCTION

ALLIANCE AUTO AUCTION WACO

$AVE : up to $200 Sell Fee

$AVE : $200

$AVE : $200

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.

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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.

www.allianceautoauction.com 15735 I-35 Frontage Road Elm Mott, TX 76640 254.829.0123, Fax 254.829.1298 GM: Carmen Robinson (Sales Manager) Friday, 10:00 a.m.

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legal corner Avoid Sales to Minors

by Michael

I

n the course of representing dealers and dealer associations over the years, I have determined that no matter how often warnings appear in newsletter articles like this, or are discussed at dealer meetings and seminars, there will be new dealers and dealers who haven’t received the warning who will repeat the same mistake made by others.

One of the worst mistakes a dealer can make, and one of the things I warn about most, is selling to a minor. Yet I still get calls from dealers who somehow missed the prior warnings and get caught up in a bad situation by selling to a minor. Sometimes the call is prefaced by the statement that “I knew I shouldn’t have, but sales have been slow and the buyer had cash...”

One call I got on the topic was from a dealer who had heard through the dealer rumor network that it was OK to sell to a 17-yearold if the sale is for cash. Of course, as soon as the teenager had blown the engine on the vehicle (while racing, no doubt), the parents informed the dealer that because he had sold a vehicle to a minor, he had to give back the money no matter what condition the vehicle was in. In this case, the parents knew the law much better than the dealer and the informal dealer-rumor network did.

Most dealers know by now that the legal age for contracting is 18.

(The minimum age for purchase or consumption of alcohol is 21 and appears in another area of the law.)

And, as the parents informed the dealer in question, he did have to

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give the money back, even though the engine was blown (or even if the vehicle had been wrapped around a telephone pole, for that matter). Some dealers erroneously think that the minimum age applies only to financing and not to cash sales. It in fact applies to all contracts, and a cash sale is a contract (“I agree to give you this car if you agree to give me money”).

Some people confuse the common law principle that a contract can’t be enforced against a minor with the ability to transfer a title certificate to a minor. There is no reference to age on title transfer documentation, so there theoretically is no limitation to the administrative act of transferring a title to a minor.

The ability to transfer title, however, has no effect on the legal enforceability of the contract.

There are two legal exemptions from the 18-year minimum age for entering into contracts. One is marriage and the other is the formal legal process known as emancipation, in which a court orders the removal of the inability of a minor to enter into contracts. Reliance on either of these by a seller should include solid documentation of the status that can be used in court, if necessary.

Dunagan

W.

TIADA GENERAL COUNSEL

The best way to handle the situation where a vehicle is being purchased for use by a minor is to have all papers (title transfer as well as bill of sale and installment contract) list the parent as buyer.

Other dealers who make the mistake of selling to a minor are aware of the legal age but fail to check driver’s license information. One dealer told me he had looked at the underaged buyer’s driver’s license but, because the buyer seemed old enough, never thought to calculate the age based on the date of birth. Another variation of the inadvertent sale to a minor is the negotiation of the sale by a parent who convinces the dealer to put all papers (including a bill of sale and/or retail installment contract) in the name of the child for “insurance or liability” reasons.

One call I got was from a West Texas dealer who was not aware of 11

the dangers of selling to a minor and sold a vehicle to a 17-year-old for cash. The minor’s father then began making threatening calls to the dealer and sending threatening letters. After complaining to the Division of Motor Vehicles and the Better Business Bureau, the father finally presented a formal demand.

He wanted the dealer to sell all 11 cars on the dealer’s lot to him for one dollar each. If the dealer refused, the father would bring in the legal big dogs. I advised the dealer 2021 TLSAA Lubbock_TIADA ad.pdf

1

to offer the minor all his money back upon return of the vehicle and to refuse the father’s blackmail demand.

The best way to handle the situation where a vehicle is being purchased for use by a minor is to have all papers (title transfer as well as bill of sale and installment contract) list the parent as buyer. The parent can then make a gift transfer of the title to the child without having to pay tax again. (A flat minimum tax is assessed on gift transfers.)

2/28/21

4:11 PM

It is a good policy to make a copy of the driver’s license of any purchaser, but especially when the buyer is young and might be under 18.

It is a good policy to make a copy of the driver’s license of any purchaser, but especially when the buyer is young and might be under 18. If a false I.D. is given by a minor indicating he or she is over 18, the seller has a defense against the sale to a minor charge. But if the seller doesn’t have a copy of the driver’s license in the file, the defense can’t be proven.

It might be a good idea to make copies of this article and show it to all sales, title, and F&I personnel and include it in the dealership’s compliance and procedure manual.

Keep a copy handy so you can pull it out the next time another dealer tells you it’s legal to sell to a 17-year-old, as long as it’s for cash.

It might be wishful thinking on my part, but it would be nice to never have to take another call from a dealer that starts out: “I just sold a car to a 17-year-old who totalled the car (uninsured, of course) and his parents are demanding the money back.”

C

M

Y

CM

MY

CY

CMY

K

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.

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membership corner Welcome Back, Members

A

s TIADA nears the end of its renewal season, we want to take this opportunity to thank each of you for renewing your membership and invite you to maximize your member benefits right away. When in doubt, give TIADA a call and we are happy to answer any questions you may have regarding the Auction App, Compliance Consultation Service, 2021 TIADA Conference & Expo and other member benefits.

With a new year comes new goals, and this year, TIADA has its sights on growing to 1,335 members, and we are well on our way. In fact, as of printing time, TIADA has reached nearly 70 percent of its goal—that translates to 925 members strong and growing! That said, if you happen to know a dealer who has not renewed for 2021, remind them there is still time to do so.

In other news, TIADA was excited to kick off the year by offering our returning members a Conference giveaway. Members who renewed by the first week of February were automatically entered to win. We were pleased to partner with Frazer to offer this program.

That said, a huge congratulations to the three TIADA members who won a Conference package to this year’s TIADA Conference & Expo at the Kalahari Resort. We are certainly looking forward to seeing everyone at this year’s Conference!

And, while we’re on the topic of Conference, registration for this year’s event is now open. Be sure to turn to pages 24–29 for additional details.

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

Meeting – 4th Thursday of Jan–May and Sep–Oct

HOUSTON

April Hanson Coast to Coast Motors Meeting – 2nd Tuesday (Monthly)

SAN ANTONIO

Jose Engler Irving Motors Corp (dates announced at www.txiada.org)

CONGRATULATIONS 2021 Tiada Conference & Expo Package Winners!

Package 1 – one full conference dealer registration pass

Daniel Delgadillo

bacliff auto

–

bacliff, tx

Package 2 – one full conference dealer

registration pass and two-night hotel stay

José Engler

irving motors corp.

–

san antonio, tx

Package 3 – one full conference dealer

registration pass and two-night hotel stay (suite)

Lee Akins

horseshoe automotive

March 2021

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–

tyler, tx

Upcoming Events 2021

April 19

Board of Directors Meeting, Austin, TX

July 25 Board of Directors Meeting Kalahari Resorts & Conventions, Round Rock, TX

July 25-27

TIADA Conference and Expo Kalahari Resorts & Conventions, Round Rock, TX 13

feature

Zero Emissions Effect on the Independent Auto Industry

by Micheline Baida Freelance Writer

A

s independent auto dealers continue running their businesses during the pandemic, another issue seems to be on the rise. However, this time, it does not take the shape of a pandemic, but rather a strong push toward Zero Emissions and Eco-Friendly automobiles. Some would argue the buyer’s focus is switching to all electric vehicles, which is slowly but surely becoming a matter of contention for the modern-day dealer.

Many dealerships believe that the surge in demand for electric vehicles will take many years to become significant in the industry and that the transition into or adding the ability to service auto vehicles is still far-off. Chris Elkins, Manager of M D Auto Sales in Grand Prairie, says “It’s going to take several years to trickle down to the Buy Here Pay Here Dealer,” and that just like many others, they plan on “dealing with it as it comes in,” not expecting to have to work through it anytime in

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“I lost a lot of customers, but I also gained a lot of new customers… In the end, it’s all about branding.

We have to let people know what we do and that we specialize in this area.” ~Beto Beas, Owner Beas Auto Sales Corporation

the near future. Chris adds that “once the infrastructure is built, not only on the repair side, but once there is more demand and the consumers start accepting them, our hands are going to be forced to work on them and start dealing with them.”

Gary Sayre, owner of Gary’s Used Cars in Dallas, says “We’re going to try to stretch gasoline vehicles out as far as we can, before we have to convert.”

Almost unanimously, the biggest hindrance at this moment for dealers, when it comes to EV, lies in the scarce supply of parts. When speaking with Gary, he mentions that “Tesla, for example, service their own vehicles, and there are no Tesla dealerships to go to; that raises a big question about parts and service availability for dealers and whether or not Tesla is going to try and maintain control of the market and sell their parts for premium prices.”

Other dealers expressed concerns as well, regarding the availability of parts pertaining to EVs and whether T e x a s

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they would be able to buy these parts after-market, or straight from the manufacturer, at a much higher price.

Gary then adds that another main issue dealers are facing today is the high cost of EVs; thus, affecting our ability to buy and service them, saying “we will have to add several charging stations to both of our lots and our service center, which will be a very expensive undertaking. I would assume EVs would be easier to maintain and diagnose service issues, and I believe that prices will still be exceedingly high on those (charging stations) during the transition period.”

On their website, Tesla boasts that they are adding a hundred new service centers, and well over a thousand technicians, as well as mobile units that are tasked with fixing their cars on the go. In the used auto dealership world, however, technicians specializing in repairing EVs are another scarce commodity.

For the smaller dealers, the idea of bringing on a specialized technician in all-electric vehicles seems overwhelming, not only because of the technicians’ high cost of labor, but also because they would need considerable training, When asked to provide a personal guestimate of how long before the surge in EVs becomes more prevalent than gasoline cars, Chris responds that “the future always comes faster than you think, but it’ll be at least about ten years before we start seeing direct changes in the industry.”

He also added that it is a dangerous time to be a pioneer in this scenario, mentioning the significant risks and expenses that it could cost the dealerships. “I think we are absolutely going to have to combine both”, says Chris when asked about the need to service both all-electric and gasoline vehicles in the future, he goes on to say, “we may be subcontracting certain repairs on these electric vehicles until we become more comfortable and more savvy about repairing them.”

While it is true that these incidents might prove to be costly to the March 2021

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dealerships, some dealers believe that it will eventually save them time and trouble and takes the guess work out of the equation, in addition to providing clients with a safe and well rehabilitated vehicle. At M D Auto Sales, they welcomed a trade-in of an electric vehicle, and seized the opportunity to get to know the technicalities of what its repair might entail.

“We are basically going to do an autopsy on it like a biology experiment, and while we’ll learn some things, we will send it back to the auction, until

at least we have a better concept of how it works,” says Chris.

On the other hand, and only two time zones away, a California dealership has switched to dealing with strictly all-electric vehicles. Beto Beas is the owner of Beas Auto Sales Corporation, in Stockton, CA, a dealership that has been in his family for generations. A few years after he took over the business himself in 2010, his attention was shifted onto the newer car trends and the spikes in customer demands, as well as the direction in

.

15

635 Fritz Dr. Ste 210 Coppell, TX 75019 469-637-0150

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which the legislation of the state was headed. Around three years ago, he made the bold decision to delve into selling used electric vehicles, despite the skepticism and the backlash he faced from several people in his community. “I started looking into it and researching all this stuff about electric vehicles and then decided that it was the way to go... People would ask me, ‘What are you doing? Why are you getting into all this hybrid and electric stuff?’ but as we progressed, I was determined to make this work, and thank God we are now the leaders in this program, and we are doing quite well.” Beas Auto Sales Corporation is one of the few rare dealerships that deals solely with EVs. A true pioneer in this area of the industry, Beto was not hesitant to share the significant challenges he has had to face after choosing to move forward in this direction, saying “I started off the first year, and to be honest it wasn’t great, we lost a lot of money transitioning. The first year was rough, but then it all started falling into place… It was interesting to see that every day, we would just keep getting better and better and it’s just been a blessing all the way around.” Despite the challenges and the uncertainty this industry faces, Beto remains unregretful in his decision. “We’re committed. I completely changed my inventory, and about 95% of it is electric-hybrid and plug-in hybrid. The other 5% is just cars that are leftover or a specific request by one of our old customers, but we just don’t deal with them (gasoline vehicles) anymore.”

It took the Beas Auto Sales Corporation around a year and a half to fully transition into servicing and selling used electric vehicles. The dealership owner stressed the amount of research they performed before heading down this path. He says it eventually paid off, because he was able to achieve

what very few dealers were doing at the time and even today. Although they faced certain complex difficulties in this transition, mostly navigating through high expenses and losing some of their customer base, but when Beto was asked about how he managed to emerge successful from this difficult undertaking, his response was “I lost a lot of customers, but I also gained a lot of new customers… In the end, it’s all about branding. We have to let people know what we do and that we specialize in this area.”

Regarding the maintenance and service, Beto stands in agreement with our Texas dealers who prefer sending the EVs back to the main dealer or manufacturer, commenting that “we send them directly to the dealer because we can’t work on them completely.

There is just so much into it, and even then, they (original car dealership) have a hard time finding technicians because they’re specialists in that area”. He continues to say; however, concerning basic maintenance that “because our cars are fairly new, it’s fairly simple to service these vehicles here.”

While gasoline cars are not going away anytime soon, it would be unrealistic to think that these electric and hybrid vehicles will not have an impact on the independent auto dealership industry, dealers all around the country are watching to see what the next moves of giant manufacturers will be. While these giant manufacturers watch the reactions of the modern consumers to their products, they are also keeping a keen eye on new regulations as they look to stay relevant and boost their sales. The more customers that choose all-electric, the more they produce, and the more available parts are in the market, which allows independent car dealerships a better chance of making a profit and possibly transitioning into this field.

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ATTENTION STUDENTS!!!

$1,000

Marvin Norwood Scholarship DEADLINE

May 10, 2021 {Applications and/or any required documents received after May 10, 2021 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 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).

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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

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legislative bulletin

by TIADA

Staff

87th Texas Legislature New Committee Assignments

T

he 87th Texas Legislature is officially underway.

Newly elected Speaker of the House Dade Phelan released his committee assignments last month.

As expected, a new Speaker ushers in new leadership and many new committee chairs. Below you will find a list of chairs as well as members appointed to the committees that receive most of the bills related to our industry. Legislation that has been filed will now be referred to the appropriate committee.

Agriculture & Livestock: CHAIR: Burns, DeWayne; VICE-CHAIR: Anderson, Charles “Doc” Appropriations: CHAIR: Bonnen, Greg; VICECHAIR: González, Mary of El Paso Business & Industry: HAIR: Turner, Chris of Tarrant; VICE-CHAIR: Hefner, Cole

Elections: CHAIR: Cain, Briscoe; VICE-CHAIR: González, Jessica of Dallas

Energy Resources: CHAIR: Goldman, Craig; VICECHAIR: Herrero, Abel Environmental Regulation: CHAIR: Landgraf, Brooks; VICE-CHAIR: Dominguez, Alex General Investigating: CHAIR: Krause, Matt; VICECHAIR: Neave, Victoria Higher Education: CHAIR: Murphy, Jim; VICECHAIR: Pacheco, Leo Homeland Security & Public Safety: CHAIR: White, James; VICE-CHAIR: Bowers, Rhetta

Calendars: CHAIR: Burrows, Dustin; VICE-CHAIR:

House Administration: CHAIR: Metcalf, Will; VICECHAIR: Cole, Sheryl

Corrections: CHAIR: Murr, Andrew; VICE-CHAIR:

Human Services: CHAIR: Frank, James; VICECHAIR: Hinojosa, Gina

Moody, Joseph Allen, Alma

County Affairs: CHAIR: Coleman, Garnet; VICECHAIR: Stucky, Lynn Criminal Jurisprudence: CHAIR: Collier, Nicole; VICE-CHAIR: Bell, Keith of Kaufman Culture, Recreation & Tourism: CHAIR: King, Ken of Hemphill; VICE-CHAIR: Gervin-Hawkins, Barbara Defense & Veterans’ Affairs: CHAIR: Raymond, Richard Peña; VICE-CHAIR: Buckley, Brad March 2021

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Insurance: CHAIR: Oliverson, Tom; VICE-CHAIR: Vo, Hubert; MEMBERS: Paul, Dennis; Sanford, Scott; Vo, Hubert; González, Jessica of Dallas; Hull, Lacey; Israel, Celia; Middleton, Mayes; Romero, Ramon

International Relations & Economic Development: CHAIR: Button, Angie Chen; VICECHAIR: Morales, Christina of Harris Judiciary & Civil Jurisprudence: CHAIR: Leach, Jeff; VICE-CHAIR: Davis, Yvonne 19

Please Welcome Our Newest TIADA Members DEALER MEMBERS 210 Auto Credit

Nory Pakravan . . . . . . . . . 402 N General McMullen Dr., San Antonio, TX 78237

99 Alpha Aviation, LLC

David Fuller . . . . . . . . . . . . . . . . . . . . . 530 Valley Chile Road, Vinton, TX 79821

Andover Auto Group

William Bates . . . . . . . . . . . . . . . . . . . . . . . . 1818 Andover ln, Corinth, TX 76210

Anonymous Motorsports

Ray Marks . . . . . . . . . . . . . . . . . . . . . . 30 East Harding Circle, Orange, TX 77630

Auto Fi

Dritan Ida . . . . . . . . . . . . . . . . . 1352 S State Highway 121, Lewisville, TX 75067

Car Rescue

Julie Ausbrook . . . . . . . . . . . . . . . . . . . 2604 Isabella Way, Royse City, TX 75189

Englewood Automotive

Shakelia Johnson . . . . . . . . . . . . . . . . . . 716 Stonedale Dr., Arlington, TX 76002

G&M Automotive

Jerry Valcik . . . . . . . . . . . . . . . . . . . . . . . . . 541 N Main St, Fort Worth, TX 76164

J & L Auto Sales

Jodi Lamb . . . . . . . . . . . . . . . . . . . . . . 102 East 52nd Street, Lubbock, TX 79404

JC Autogroup LLC

Christian Griffith . . . . . . . . . . . . . . . . . . 125 Silver Fox Road, Marshall, TX 75670

Longhorn Motors and Trailer Sales, Inc

Julie Gallaway . . . . . . . . . . . . . . . . . . . . . . . . . . . . PO Box 1775, Belton, TX 76513

MTZ Auto LLC

Brian Braganca . . . . . . . . . . . . . . . . 18725 Mangan Way, Pflugerville, TX 78660

PICKNDRIVE

Willy Deutia . . . . . . . . . . . . . . . . . . . . . . . . . . . 7308 19th St., Lubbock, TX 79407

Pride Truck Sales

Johnathan Rodriquez . . . . . . . . 34880 Lyndon B Johnson Fwy, Dallas, TX 75241

Shata Group of Companies, LLC

Atanda Ajibola . . . . . . . . . . . . . . . . . . 804 Secretary Dr., B, Arlington, TX 76015

Texas Trade In

Ahmed Elbess . . . . . . . . . . . . . . . . . . . . . . 10038 Grover Ln, Houston, TX 77041

The Ranch Harley-Davidson

John Gipson . . . . . . . . . . . . 4101 State Highway 6 S, College Station, TX 77845

Wildchamp LLC

Kofi Owusu . . . . . . . . . . . . . . . . . . . . . . . 3904 Capricorn Court, Plano, TX 75023

ASSOCIATE MEMBERS Chosen Payments

Keith Sweeney . . . . . . . . . . . 900 Circle 75 Pkwy, Suite 540, Atlanta, GA 30339

D&G Quality Roofing

Mike Kowalski . . . . . . . . . . . . . 4305 E FM 1187, Suite 100, Burleson, TX 76028

IDI

Nicholas Vito . . . . . . . . 2650 N Military Trail, Suite 300, Boca Raton, FL 33431

Win360

Osman Heggi . . . 1465 Daniel Creek Rd., Suite 950, Mississauga, ON L5V 1T8

20

Juvenile Justice & Family Issues: CHAIR: Neave, Victoria; VICE-CHAIR: Swanson, Valoree Land & Resource Management: CHAIR: Deshotel, Joe; VICE-CHAIR: Leman, Ben Licensing & Administrative Procedures: CHAIR: Thompson, Senfronia of Harris; VICE-CHAIR: Kuempel, John; MEMBERS: Geren, Charlie; Guillen,

Ryan; Hernandez, Ana; Thompson, Senfronia of Harris; Darby, Drew; Ellzey, Jake; Fierro, Art; Goldman, Craig; Huberty, Dan; Pacheco, Leo

Local & Consent Calendars: CHAIR: Geren, Charlie; VICE-CHAIR: Dominguez, Alex Natural Resources: CHAIR: King, Tracy of Uvalde; VICE-CHAIR: Harris, Cody Pensions, Investments, & Financial Services: CHAIR: Anchia, Rafael; VICE-CHAIR: Parker, Tan; MEMBERS: Rogers, Glenn; Stephenson, Phil; Capriglione, Giovanni; Muñoz, Sergio; Perez, Mary Ann; Slawson, Shelby; Vo, Hubert

Public Education: CHAIR: Dutton, Harold; VICECHAIR: Lozano, J. M. Public Health: CHAIR: Klick, Stephanie; VICECHAIR: Guerra, R.D. “Bobby” Redistricting: CHAIR: Hunter, Todd; VICE-CHAIR: Rose, Toni

Resolutions Calendars: CHAIR: Guillen, Ryan; VICE-CHAIR: Toth, Steve State Affairs: CHAIR: Paddie, Chris; VICE-CHAIR: Hernandez, Ana

Transportation: CHAIR: Canales, Terry; VICECHAIR: Thompson, Ed of Brazoria; MEMBERS:

Canales, Terry; Davis, Yvonne; Lozano, J. M.; Martinez, Armando; Thompson, Ed of Brazoria; Ashby, Trent; Bucy, John; Harris, Cody; Landgraf, Brooks; Ortega, Lina; Perez, Mary Ann; Rogers, Glenn; Smithee, John

Urban Affairs: CHAIR: Cortez, Philip; VICE-CHAIR: Holland, Justin

Ways & Means: CHAIR: Meyer, Morgan; VICECHAIR: Thierry, Shawn

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Avoid expensive fines and penalties

Dealer Academy The Texas License Renewal Education Course provides the ins and outs of being a dealer in

Texas in a self-guided online course, available 24/7. This is the same course required by the TxDMV to renew a GDN license, so it covers all the important subjects including: • Staying compliant with TxDMV regarding premises requirements • Acquiring Inventory • Temp Tags and Metal Dealer Plates • Buyer’s Guide • Deal Jacket Documents

• Transferring Titles • Record Keeping • Special Inventory Tax (VIT) • Federal Requirements • The OCCC • Enforcement and Investigation • Advertising Rules

Register your staff today!

Just $99 This course is perfect for managers that need an overall refresher or for the new employee that needs to be brought up to speed on all aspects of this industry in a fast, convenient and reliable way.

In addition to TxDMV’s approval, this course has been reviewed by the Tax-Assessor Collectors Association of Texas for accuracy so you’ll never have your title transfer paperwork rejected again.

To register visit TexasDealerEducation .com and select the Texas License Renewal Education Course.

What People Are Saying: “Great ref resher course, helped me remember a lot of items that I need to be intoned with.”

“The course provides all the necessary information, links, and rules where I can f ind useful tools for my business.”

“If you want to learn more about a specif ic topic this course includes a direct link to the source you are trying to f ind out more information on.”

“Overall, this program was great and I am happy that eLICENSING implemented this to ensure we know the basic stuff of running our dealers and running a clean ship without having to face violations or risk your license, this is awesome!”

“This is a good training course for all new dealers. It can also be recommended for old dealers as a ref resher training course.”

feature

Securitization: Unique Funding Model Creates More Capital

by Patrick Fortner Freelance Writer

“You boys know what makes this bird go up?”

“Funding makes this bird go up…”

“He’s right. No bucks, no Buck Rogers...and that’s us.”

I

n the movie, “The Right Stuff,” this scene is where the newly minted astronauts first see their space capsule and express their grave disappointment to the scientists who built it that there’s no window or exploding bolts on the door that can be triggered by the pilot, among other things. The scientists, who seemingly expected no pushback from the Mercury Seven, tell them they won’t make any changes, which led to the exchange above. The astronauts stuck to their guns, and they got the changes they wanted.

For most independent automobile dealers finding capital is priority one. For seller finance dealers or dealers who would like to keep more contracts in house, bypassing the traditional ‘senior lenders’ in favor of a new

22

and innovative ‘crowdsourced’ auto securitization funding mechanism might just be the right stuff for them and their customers, some say.

Steve Burke, co-founder, partner and chief executive officer of Agora Data, said he believes the new model, built very similarly to other securitization funding processes, but rarely tried in the auto-lending space for BHPH dealers, could be both ‘disruptive’ to traditional funding mechanisms and extremely beneficial to participating dealers, since it will provide them cash to grow their business. Burke, who has worked in and with the auto sales business since the 1980s, said the ultimate benefit is affordable and abundant capital. “To the average person or to the dealer — the Buy Here Pay Here dealer — a crowdsourced securitization is putting together a group of buy here pay here dealers that on their own would not ordinarily qualify for a capital market securitization and put them together to get size and to get scale,” Burke said.

Britannica explains securitization as the practice of pooling together various types of debt such as consumer loans and selling them as bonds to investors.

Investopedia’s Chris Gallant describes securitization as the process of taking an illiquid asset group and through financial engineering transforming them into security.

Once you have a pool of notes from various dealers, the loans can then be sold to investors. This allows dealers to pay off their loans and then borrow at a lower interest rate.

“I am far from an expert in this field,” said TIADA Executive Director Jeff Martin, “but I do see how it can introduce new lending opportunities for many dealers by providing capital at a lower interest rate.”

Steven Watkins, of Watkins Auto Sales in Jackson, Mississippi who participated in the first round of securitization offered through Agora, said compared to ‘senior lenders,’ funding acquired under this securitization process opens his business to a wider field of lending sources at rates significantly lower, while the added services such as collections and dashboards with portfolio information at his fingertips made it an easy decision. “The most difficult aspect is capital, and that’s what this takes care of,” he said. “It’s as cheap or cheaper than an LOC (line of credit) from a traditional bank, and the services make the difference.”

Erika Mondragon, of Veloz Auto Group in Houston, said during her five years as the owner, she has T e x a s

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self-financed loans and worked with senior lenders functioning as third party/subprime lenders. “If I had the money, I’d stay in-house, but we couldn’t because we didn’t have the capital,” she said. “This process gives us the freedom and is almost like having a partner who also believes in Buy-Here Pay-Here.”

Burke said Agora’s scale affords dealers like Watkins and Mondragon the additional flexibility that they can roll back into their businesses, or savings to their customers. “Let’s say that they have a traditional line of credit. A typical Buy Here Pay Here dealer will pay between 10 and 14 percent for interest and they may also have very restrictive financial covenants,” he said. “Traditionally how they do it now in a securitization, that senior lender gets paid off and those assets move it to the trust at an interest rate that is typically in the low- to mid-single digits, so right away they’re cutting their interest in half.”

After speaking to some dealers, it is clear the securitization and pooling may not be for every dealer.

Some dealers felt the relationship with their bank or current lender was too important, others were still

“This process gives us the freedom and is almost like having a partner who also believes in Buy-Here PayHere.” ~Erika Mondragon Veloz Auto Group Houston

unsure of the “new” process and wanted to take a wait and see approach, and then some dealers just don’t want to take on any debt. But, for many dealers looking for more capital this disruption may be the answer to, “where can I find more capital?”

Mondragon said the biggest positive for her business is being able to offer better deals to customers that might only qualify for a subprime loan. “I struggled to find a bank that would help me grow my portfolio and provide a better solution to these customers...to give them an honest 2nd chance. Without this, I wouldn’t be able to give them that chance,” Mondragon said. “And it gives me the opportunity to get more long-term customers who are going to refer me to their friends and families. They’re going to keep coming back.”

Big banks, large lenders and dealer groups all use securitization to fund their business and now the BHPH dealer can do the same.

DRIVING GROWTH KEEP YOUR CUSTOMERS. KEEP YOUR PROFITS.

Fast, No-Hassle Lending.

CALL NOW TO REACH YOUR FULL POTENTIAL!

972-239-6668

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The best dealers in Texas, the best education anywhere.

July 25-27, 2021

“I was very pleased to hear about other dealers experience and happy they were willing to share information that would make my business better. All their input was very much appreciated.” karina saenz , encore motors

24

-

houston

T e x a s

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Adventure meets learning at Round Rock’s newest resort. In addition to top-notch

meeting space, Kalahari offers delicious dining options, award-winning indoor/ outdoor attractions, retail shopping, Spa Kalahari and more — amenities

and recreation opportunities that are

perfect for the entire family including

America’s largest indoor park.

“This was my first convention even though I’ve been a member for over 25 years. Looking back we sure missed out on a great opportunity to learn about what’s going on in our industry.” larry dziuk ,

superior auto sales , inc

“This is my first time attending the conference. I walked away with several key pieces of information that will positively impact the future of our dealership.” austin hunter , speedway motors san antonio

-

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beeville

March 2021

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Thank You

TO OUR

P L A T I N U M

L I M I T E D S P O N S O R S H I P & E X H I B I T I N G O P P O R T U N I T I E S AVA I L A B L E 26

T e x a s

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CURRENT G O L D

Sponsors W Walker Auction Group

S I L V E R

S P E C I A L T Y ACV AuCtions – Happy Hour AdVAntAge gPs – Happy Hour PrimALend CAPitAL – Meeting Digital Signage

V12 – Lanyards

B R O N Z E Auction Credit Enterprises Big Valley Auto Auction

AUL Corporation BlytzPay

AutoAction

First Texas Auto Credit

MyCarCare.com/Car Care Promotions Inc. Tax Refund Services-Tax Max

AutoMaster

AutoZoom

Ignite Consulting Partner

TPFS Auto Finance

Wayne Reaves Software

C O N TA C T PAT T Y H U B E R AT PAT T Y. H U B E R @ T X I A D A . O R G / 5 1 2 . 3 1 0 . 9 7 9 5 March 2021

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2021 TIADA Conference & Expo July 25 –27, 2021 Kalahari Resorts & Conventions – Round Rock, TX Customize your conference experience by selecting from the options below. Please complete the registration form and return it with payment in full to the address listed or for online registration, go to www.TiadaAnnualConference.com.

EARLY BIRD RATE

CONFERENCE OPTIONS

through June 18th

Register by June 18th,

Full Conference Pass—Dealers Only (includes Welcome Reception, Monday & Tuesday Education /Sessions, Expo Hall, Lunch on Monday & Tuesday, and Awards Reception & Dinner)

1st Registrant 2nd Registrant* 3rd + additional Registrant*

Save $100 per attendee.

$595 $495 $495 $395 $395 $295

One Day Dealer Pass

$300 $400 non-members

(Monday 7/26 or Tuesday 7/27) (includes Monday or Tuesday Education, Expo Hall and lunch on your selected day)

Non-Member (Dealers only)

$895 $795

TADA and out-of-state IADA members are eligible for TIADA member rate

*Registrants must be from same dealership to receive discounted rate

Discounted guestrooms are available for $199/night with a waived resort fee for TIADA Conference attendees.

Please contact the hotel directly to book your room. Must be reserved on or before June 18th to receive discounted rate. Room reservations that are cancelled 72 hours, or more, prior to arrival will receive full refund less $30.00 processing fee. Less than 72 hours prior to scheduled arrival forfeits entire deposit. No-shows will also be charged one-night’s room & tax.

Kalahari Resorts / 3001 Kalahari Drive/ Round Rock, TX 78665 Call 512.651.1000 or book online TiadaAnnualConference.com/KalahariResorts 28

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Dealership: ______________________________________________________ Phone: ____________________ Address: ________________________________________________City/ST/Zip: ______________________  Primarily BHPH Dealer

 Primarily Retail Dealer

REGISTRANT DETAILS

 Equally BHPH/Retail Dealer

REGISTRANT DETAILS

1st Registrant

2nd Registrant

1st TIME ATTENDEE? Yes No

1st TIME ATTENDEE? Yes No

Name: __________________________________________________ Name for Badge: _________________________________________ Title: ___________________________________________________

Name: __________________________________________________ Name for Badge: _________________________________________ Title: ___________________________________________________

Email:__________________________________________________

Email:__________________________________________________

 FULL CONFERENCE ($495 Early Bird through 6/18)  ONE DAY PASS ($300) Circle Preferred Day MONDAY TUESDAY

$____ $____

 FULL CONFERENCE ($395 Early Bird through 6/18)  ONE DAY PASS ($300) Circle Preferred Day MONDAY TUESDAY

$____ $____

 Expo Hall Guest Wristband (10 & older) ($99 x ____)  Addt’l. Awards Dinner Ticket (10 & older) ($50 x ____)

$____ $____

 Expo Hall Guest Wristband (10 & older) ($99 x ____)  Addt’l. Awards Dinner Ticket (10 & older) ($50 x ____)

$____ $____

2nd Registrant Subtotal $_____

1st Registrant Subtotal $_____ 3rd Registrant

4th Registrant

1st TIME ATTENDEE? Yes No

1st TIME ATTENDEE? Yes No

Name: __________________________________________________ Name for Badge: _________________________________________ Title: ___________________________________________________

Name: __________________________________________________ Name for Badge: _________________________________________ Title: ___________________________________________________

Email:__________________________________________________

Email:__________________________________________________

 FULL CONFERENCE ($295 Early Bird through 6/18)  ONE DAY PASS ($300) Circle Preferred Day MONDAY TUESDAY

$____ $____

 FULL CONFERENCE ($295 Early Bird through 6/18)  ONE DAY PASS ($300) Circle Preferred Day MONDAY TUESDAY

$____ $____

 Expo Hall Guest Wristband (10 & older) ($99 x ____)  Addt’l. Awards Dinner Ticket (10 & older) ($50 x ____)

$____ $____

 Expo Hall Guest Wristband (10 & older) ($99 x ____)  Addt’l. Awards Dinner Ticket (10 & older) ($50 x ____)

$____ $____

4th Registrant Subtotal $_____

3rd Registrant Subtotal $_____

Payment Information

Total Amount Due $ ____________

 Make check payable to TIADA.  TIADA is hereby authorized to execute payment to the following credit card:

 AMEX

 Visa

CC Number__________________________________________________________________Exp. Date ____________

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Name on Card_________________________________________________Authorized Signature_______________________________________ TIADA | 9951 Anderson Mill Rd, Suite 101; Austin, TX 78750 | Phone 512.244.6060 | Fax 512.244.6218 | Conference@txiada.org March 2021

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on the cover

by TIADA Staff

Then Women and NOW: of TIADA S ince TIADA’s start in 1944, there has been a vast number of industry professionals who have contributed to what TIADA is today. Over 70 presidents have served the state association over the years, four of whom have been women. International Women’s Day falls in March, a day that celebrates among other things, women’s achievements. This month, Texas Dealer rounded up TIADA’s four female past state presidents, Janette Winkelmann, Patricia Harless, Anne Brown Arredondo and Kathrine Tolsch to learn about their experiences as industry leaders, a few of the challenges they faced at the time and what they have been up to since.

Janette Winkelmann “Deer, raccoons, opossums, eagles — I do wildlife rehab,”

1997

Janet Winkelmann told Texas Dealer recently in a phone conversation.

That’s right, these days you are more likely to find former TIADA President Winkelmann at a nonprofit organization helping 30

Photo Credit: Tony Bullard

rehabilitate wildlife in the Houston area than running a dealership. However, prior to this transition, Winkelmann dedicated over 20 years to the independent automobile industry and, in 1997, Winkelmann would become the first female TIADA President in the association’s history.

Winkelmann, a native Houstonian, was first introduced to the car business following her term as a loan officer at a bank. “Back in the ‘80s it was very unusual for women to be in that position [of loan officer], and I learned a lot about breaking into a new life as a professional. I did a lot T e x a s

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of car loans back then.” Over time, Winkelmann served as the president of the Houston local chapter, became a TIADA member in 1985 and then president of the state association 12 years later.

When asked to identify one of the biggest challenges while TIADA President, Winkelmann recalls the association was struggling at the time with a staff size of, well… one. Winkelmann remained focused on her commitment to help the association become recognized as the leader in dealer education. “With the help of Mike Dunagan, TIADA began to change focus and achieve that goal.

Janette Winkelmann Featured in Used Car Dealer Magazine, 2007 (courtesy of NIADA)

Patricia Harless 2002

Fast forward five years to 2002, and

TIADA welcomed its second female TIADA President, Patricia Harless. “Working with fellow dealers that I pretty much grew up with to solve problems our industry faced is still a highlight of my automotive career.

TIADA dealers are the best of the best nationwide. Just look at the number of Texas dealers that have won NIADA’s quality dealer.”

Harless was raised in her father’s dealership, Fred Fincher Motors in Houston, along with her eight siblings. Her involvement with the dealership started at the age of 13 where she worked weekends and

TIADA Lobby Day, 2013 – Harless welcomes fellow dealers from the House of Representatives floor.

We had an amazing board that wanted the same goals and, every year, I watched that dream become more and more a reality.” With the TIADA plaque still displayed on her wall, Winkelmann added, “from then on, as the association has grown—I feel an enormous sense of pride.”

Through her involvement with the association, Winkelmann also worked to help dealers understand the female buyer. “We went to several cities in disguise to try and get dealers to understand that women could make buying decisions without the husband’s approval.

The results were put in the newsletter and led to many roundtable panels on trying to get more sales from women clients. It was very well received. The goal was of course to increase sales for the dealers.”

From loan officer to independent automobile dealer to wildlife rehabilitation worker, Winkelmann has certainly had a colorful past. To this, Winkelmann laughed and concluded with, “I am blessed to have lived three lives in one.”

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summers, cleaning cars at the dealership. Harless’s plans had always been to attend law school and run for office, however, after her father became ill in 1995, Harless began managing the business, and following her father’s death, Harless purchased the business to become owner/ operator.

Harless has been a TIADA member since the early 1980s and served in many positions with the state and local associations, including Director of INDEPAC and Vice President of the Houston local chapter among other roles. One quality Harless recalls most about TIADA was its growing legislative presence. “We hired a fulltime lobbyist and agencies started to seek out the association’s input prior to passing rules and regulations.”

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What is one piece of advice you’d tell an aspiring female dealer who’s just getting started in the industry?

Janette Winkelmann

Houston, TX TIADA PRESIDENT, 1997 “Be educated. Life is short, so pick your battles. The world has changed for the better in many ways. Repeat this to yourself often. Be patient. Be kind. Be fair.”

Patricia Harless

Houston, TX TIADA PRESIDENT, 2002 “Be prepared to work harder than you have ever worked. Always keep learning.”

Anne Brown Arredondo

San Antonio, TX TIADA PRESIDENT, 2003 “Really understand and become knowledgeable about the business, including the laws associated with it.

It is important to be transparent and have all one’s ducks in a row so no one can ever talk down to you, not another dealer or even a government official.”

Kathrine Tolsch

Dallas, TX TIADA PRESIDENT, 2017 “Don’t be intimidated by the male dominated industry. Be educated on the industry/business and use your voice! Be willing to get involved in the association as it will help you greatly as a businessperson and you’ll make some wonderful friends.”

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When asked about one of her biggest challenges, Harless replied: “Goodness, it is the automobile business. Every day there is another ‘biggest’ challenge.

Probably the biggest challenge was when a customer we repossessed burned our building down. The call in the middle of the night, pulling up to the dealership and the building, records, a lifetime of awards and achievements were ashes and rubble. That was big,” she said, “but auto dealers are resilient. I always say it is a defective gene we have.”

As a woman in the industry, Harless notes “maybe because I grew up with other second-generation dealers like Ed Clark, Roy Carlson, Gary Sayre, Byron Riley, but I never felt different because I was a woman.

Fellow dealers were and are friends. They always treated me like an equal. It’s one of the things I always mention when I talk about the independent automobile dealers.”

Harless later went on to serve on the former Texas Department of Transportation Motor Vehicle Board appointed by then Governor George W. Bush and Governor Rick Perry, bought and sold a General Motors dealership in Madisonville, TX, served as State Representative District 126 in the Texas Legislature from 2007 until 2016 and proudly supported her husband of 35 years, Sam Harless, the current State Representative of District 126. Today, Harless has remained active in the dealership doing the accounting and payroll.

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Anne Brown Arredondo 2003

A year later in 2003, TIADA welcomed

its third female president, Anne Brown Arredondo out of San Antonio.

“Being TIADA President meant I was breaking barriers as the first Hispanic female, although I was the third female president.”

Arredondo was born in Beeville, TX, daughter of Mrs. Petra Ballares-Brown and Joe E. Brown. In 1961, Arredondo married her high school sweetheart, Gil Arredondo; they later relocated to San Antonio and raised four children. In 1972, Arredondo was first introduced to the industry when she began working as a secretary at her uncle’s car business. While her husband was focused on learning about buying and selling cars, Arredondo went to school to earn her accounting degree. She was eager to learn all aspects of the business, from title work to accounting and even corporate taxes.

Then in October of 1977, she and her husband determined they were ready to start their own business and opened their doors to the public that same month. “In order to keep our sanity, we agreed that I would run the inside of the business and my husband would run the outside; and it worked out beautifully,” she added.

For Arredondo, entering an industry that was overwhelmingly male was one of her biggest challenges at the time, “but my dedication to the business and knowledge I gained over the years helped me overcome adversities and earn the respect of others.”

Arredondo became a TIADA member the following year in 1978. While serving as the president of the San Antonio Independent Automobile Dealers Association, Arredondo was also heavily involved with the state association, attending TIADA meetings and conferences

Newly weds Anne Brown Arredondo with husband Gil Arredondo, 1961.

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and educating local dealers on the everchanging rules and regulations that were being implemented at that time.

Earning the respect of the top TIADA board members then, including past TIADA President and mentor Marvin Ivy, Arredondo was asked to join the Board of Directors, initially as Secretary, then as Vice President before becoming President. In 1979, Gil and Anne Arredondo incorporated and became Swift Motors, Inc., doing business as Gil’s Auto Sales. Arredondo and her husband’s business and family success was then attributed to the pair’s focus on community involvement and their emphasis on working together and leading as a team.

After semi-retiring in 2010, Arredondo has continued to offer dealers guidance. “I really and truly enjoyed the years I served on the Board at both the local and state levels. I felt empowered and was able to assist many minority-owned dealerships to understand the importance of learning all aspects of their trade.”

Kathrine Tolsch 2017

Born in Germany,

Kathrine Tolsch moved to Houston at the age of four.

Over the years, her family relocated quite often, in pursuit of her father’s next venture which spanned multiple industries, from used cars to real estate to oil and gas exploration. The family ultimately settled in a small town outside of Dallas.

After graduating high school, Tolsch attended college at Southern Methodist University, earned a degree in accounting, and worked in the public accounting sector for six years in Dallas, Houston and New York. In 2002, Tolsch left her career to spend more time with her two children. She started helping out just a few hours a week with the bookkeeping at her father’s dealership, and later, when her father passed away in 2003, Tolsch took over operations.

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Tolsch, who joined TIADA in 2005, told Texas Dealer her time as president was a “great honor to represent such a professional organization and the & that I had wonderful members with gotten to know. I enjoyed visiting local chapter meetings, visiting with their members and understanding what specific issues the local chapters were having.”

Four years after serving as TIADA President, Tolsch recalls a few highlights: “I appreciated the opportunity to lobby at the Capitol and visit with Also In This Issue: – TIADA Annual Conference & Expo Wrap-Up legislators about used car dealer – Make Your Voice Heard at the Capitol – Underwriting for BHPH issues and concerns. As an – Michael Dunagan on Prior Damage and Selling “As Is” association we had a very successful legislative session. Also, we had an excellent number of legislators and agency leaders attend and speak during the TIADA Conference & Expo. It’s great to get that face time with policymakers so they know and understand who we are,” she added.

Blowin’ Goin’

Tax Season

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Currently, one of Tolsch’s greatest interests has been to serve on the National Board of the Young Men’s Service League (YMSL), a non-profit organization. In her role, Tolsch assists the organizaTIADA Welcomes tion with its Training and 2017 President Leadership Development programs and works closely with chapter leaders around the country providing them guidance and mentoring.

In 2020, Tolsch’s mother passed away and, after doing some soul searching, Tolsch told Texas Dealer she decided to close the dealership at the end of last year. “Since then, I have filled my time with YMSL and renovating my Mom’s house to prepare it for lease.” With her sights on the future, Tolsch says she plans to find some time to get her real estate license and, with her son, a pilot’s license.

Tolsch continues to be a TIADA member today.

Kathrine Tolsch

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feature

CFPB, The Roadmap Forward

by Texas Dealer Staff

This article is the first of an exclusive three-part series interview with Jean Noonan, member of the CFPB Taskforce on Federal Consumer Law.

I

Part One: Jean

Noonan, Frankly Speaking

n January 2020, the Consumer Financial Protection Bureau (CFPB) appointed a Taskforce on Federal Consumer Law (Taskforce). The CFPB stated that the Taskforce was intended to provide recommendations on how to harmonize, modernize, and update federal consumer financial laws and regulations. The Taskforce members included Chair Todd Zywicki, Howard Beales, Thomas Durkin, William MacLeod, and L. Jean Noonan.

On January 5, 2021, the Taskforce released a comprehensive report that includes 102 recommendations for improved financial protection program.

Texas Dealer had the opportunity to discuss the report with L. Jean Noonan. Jean Noonan is a partner at the law firm Hudson Cook. She advises clients on consumer financial services, fair lending, marketing, financial privacy, and consumer protection matters. She counsels financial institutions, automobile dealers, and others in complying with laws related to consumer credit, privacy, telemarketing, and unfair trade practices. She is a former executive with the Federal Trade Commission, where she directed the agency’s enforcement of consumer financial services laws. She also served for a decade as the General Counsel of the Farm Credit Administration, an independent federal bank regulatory agency.

Texas Dealer: This is an impressive document that you and your other Taskforce members spent a year working on. But now that there’s a new Administration, is it dead on arrival?

Jean Noonan: Absolutely not. We always knew that this project and our report was meant for the long term. We were told to assume at least a 20-year horizon, similar to the landmark report of the National Commission on Consumer Credit in 1972. Any Administration would find the report helpful. It includes 102 of our best recommendations for improved consumer financial protection. Any CFPB Director will find plenty of helpful recommendations, even if the Director does not agree with every one of them.

Texas Dealer: What are some examples of recommendations that the Biden Administration might find particularly interesting?

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Jean Noonan: Our report and recommendations follow three themes, which guided our work. The first is financial inclusion, which means ensuring that a range of financial products and services are available to all consumers on a fair and nondiscriminatory basis. This requires figuring out how to make financial services available to the unbanked and underbanked. It also means fighting illegal discrimination at its source.

The second principle is keeping a laser focus on preventing consumer harm. Although the Bureau recognizes that there are many stakeholders in its mission, none is more important than the American consumer.

The Taskforce has many recommendations that I believe would make preventing consumer harm the centerpiece of the Bureau’s activities, that all its many tools are brought to bear on avoiding and addressing consumer harm, including appropriate sanctions when law violations are found.

The final principle is regulatory modernization. New types of consumer financial products are appearing all the time, and many of them have been embraced by consumers and have appeared to increase consumer welfare.

For example, I use an app to pay my housekeeper and the funds go directly from my bank account to hers. If I used my bank’s online bill payment service, the bank would mail her a check, which would arrive several days later and which she would have to deposit. Her bank might then impose a hold on the funds while the check clears.

It’s not hard to see why she prefers the app, and so do I. But new products carry new potential risks for consumers, which need to be examined carefully and addressed.

Finally, laws and regulations drafted decades ago are often hard to apply to new products that Congress and agencies could not have imagined years ago. This regulatory uncertainty can chill the development of new and useful products and create costly compliance risk.

Texas Dealer: Which recommendations do you think are most in line with the goals of the Biden Administration and the new CFPB leadership?

Jean Noonan: Promoting financial inclusion and preventing illegal discrimination would be at the top 37

of my list. The Taskforce considered this a moral imperative. We have between 40 and 100 million unbanked or underbanked Americans, who are missing out on financial opportunities and security. I know that Commissioner Chopra at the FTC has a strong commitment to enforcing antidiscrimination laws, which I expect him to bring to his agenda if confirmed as Director of the CFPB. Here are just a few of the Taskforce recommendations

promoting equal access to credit and expanded financial inclusion: Considering whether the ECOA

should be expanded to prohibit discrimination on the basis of disability.

Encouraging auto dealers to adopt

the NADA Fair Credit Program to ensure unlawful discrimination in credit pricing does not occur.

Setting a standard for applying

disparate impact to ECOA cases.

Granting national charters or

licenses to FinTech companies to facilitate low-cost and innovative financial services to consumers.

Expanding the reporting and

consideration of alternative data.

Expanding the opportunity

of credit unions to provide financial products in underserved communities, regardless of their common bond restrictions.

Expanding access to financial ser vices to rural residents, immigrants, and formerly incarcerated persons.

The Taskforce also urged states to reconsider their usury laws, which often prevent auto dealers from providing credit to higher risk consumers.

I would expect the TF’s recommendations regarding consumer harm to also be of great interest to the new Administration. I’ll mention just three. First, measuring the accuracy of credit reports, building on the FTC’s landmark study several years ago. Second, adopting a national preemptive law for data breaches that prioritizes disclosures in breaches that have the greatest risk of consumer harm. Third, granting the Bureau explicit authority to examine institutions for compliance with the Military Lending Act. Texas Dealer: The cover story of this issue of the Texas Dealer features the four female past presidents of the association. While reviewing the report, I noticed that you were the only woman on the five-member Taskforce. Do you think your perspective as a woman helped this project?

Jean Noonan: There were many differences more significant than sex or gender. I was the only consumer financial protection practitioner.

My principal work has been in consumer financial protection services and counseling providers on how to comply with these very complex laws.

My colleagues are brilliant academics and researchers, and I found working with them to be one of the great

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professional experiences of my legal career. But when it came time to consider the struggles dealers and other financial services providers face with applying thousands of pages of consumer financial laws and regulations to their work in offering credit to consumers, we relied extensively on my practical experience in working with our clients on their regulatory compliance challenges, which were often outside the others’ knowledge. For example, E-SIGN, a federal law designed to promote electronic commerce has now become an obstacle to it. My colleagues did not regularly advise clients on E-SIGN compliance and did not know just how cumbersome and antiquated it has become. I was able to bring many concerns to the table about modernization because I have spent a lot of time helping my clients comply with consumer financial laws.

I spent 14 years at the Federal Trade Commission prosecuting companies for not complying with the law.

William MacLeod and Dr. Howard Beales both served as Director of the FTC’s Bureau of Consumer Protection, and they did terrific work there and were strong and effective consumer advocates. But their responsibilities were much broader than only consumer financial protection. Although they brought many valuable insights, I had more real-world experience with where laws worked well and where they do not because consumer financial practices has been a much bigger part of my career. I also

imagine I was the only Democrat on the Taskforce.

In short, I suspect my work as a practicing lawyer focusing almost exclusively on financial services for 45 years, my extensive enforcement experience, my understanding of bank examination and the exposure many independent dealers have to CFPB supervision, and my good relationships with consumer advocates in this field all were more important than being a woman.

The Taskforce has been criticized because only one woman and no people of color served on it. And those might have been legitimate criticisms, except for the fact two offers were made to people who fit these categories but who ultimately declined positions on the Taskforce for various personal reasons. The Bureau was disappointed to not have those two on the Taskforce. I was always told it would be a taskforce of seven, but in the end, it was a taskforce of five. I think the public would have perceived the Taskforce more favorably had they known the Bureau’s attempt to create a more widely diverse membership.

Texas Dealer: I understand you attended the University of Texas School of Law and Oklahoma State University, which brings me to the question: when the Cowboys play the Longhorns, who are you cheering on?

Jean Noonan: My Fellow Texans, forgive me, but I cheer for the Cowboys. I have been a Texas fan and

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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

Office of Consumer Credit Commissioner 800.538.1579

occc.texas.gov

Texas Comptroller 800.252.1382 www.window.state.tx.us

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NIADA

800.682.3837 www.niada.com

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

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some of my best friends still live in Austin. I normally cheer for the Longhorns, but when Oklahoma State plays Texas, I do cheer for Oklahoma State because my sister was a cheerleader there, and she and her friends have the best tailgates for home games.

Texas Dealer: The report states: “DOOR-TO-DOOR SALES In any contract for the sale of goods entered into outside the creditor’s place of business and payable in more than four installments, the debtor should be able to cancel the transaction at any time prior to midnight of the third business day following the sale.”

As you are aware, door-to-door sales statutes were originally designed to combat shady door-to-door salesman and car dealers were excluded from the federal door to door rescission law. Today consumers are reaching out over the internet to car dealers from numerous states with various state statutes modeled after the federal law and some of those laws are less clear as to applicability. Would you care to share your view on the application of door-to-door statutes to internet sales?

Editor’s Note: Find out next month in Part Two of this series when Noonan provides the answer to this question and many more.

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feature

How Women Consumers Are Modernizing Car Dealerships

by Women-Drivers.com Printed with permission

T

raditionally, the car dealership environment was one where women felt they needed to “bring someone with them” in order to feel comfortable. Let’s face it, the industry was built by and for men.

With decades of cultural, financial, and educational empowerment, as well as technology, training and transparency advancement, we are now in a new era altogether different from the experiences of the past.

Every year, women car buyers buy millions of new and used cars. What steps are you taking to capture your share of this powerful demographic?

Women do their research prior to stepping into a dealership. Reviews assist them in determining which stores to visit first. They trust themselves and are looking for trust from their front-line ambassador. Culture and values are important when choosing a dealership.

While the buying population is trending female — there is still much work to do. Dealers are at a crossroads: Exploring ways to shift the face of the front-line

team to match your marketplace.

Hovering between generational mindsets regarding

ways to manage the business.

Managing new advertising messages to meet new

customers and customer segments.

Creating inclusiveness and diversity in their culture.

Dealer owners and influencers need to focus on why the above numbers are acceptable, rather than explaining it away as “consumer behaviors.” These interactions are having an enormous negative effect on revenue.

The top reason women report leaving a dealership without buying is “they didn’t like the way they were approached and treated” and “the sales advisor was offputting, or her questions weren’t answered to her satisfaction.” To reduce this trend, hire sales members from the hospitality industry where delivering a high level of customer experience is expected. Telecom retail experience is another source, where trained staff sell a technical product and work long hours. It is expected that customer-facing experts from other industries have knowledge in problem-solving and finding results, not just “selling”.

Some guests are browsing and shopping and are distinct from folks who walk in ready to buy. Someone browsing is checking out your store and your people.

They may also want to test drive a car. Pay attention to these guests. If you don’t approach them at the right time, they will walk out the door and not be heard from again. These guests may say they are “just looking.” Train your team to give breathing room but to stay attentive.

By exploring new ways to engage and reach these buyers, dealers can not only increase their sales, but establish higher rates of retention.

Defined by the FAA, Flight Planning is the process of producing a plan for the proposed aircraft flight. This includes forecasting and preparing for headwinds and all types of weather conditions. In flying, as in business, these climates come and go, don’t they?

Anytime there are risks, a plan is required. You don’t hope that customers come into your store. The FAA doesn’t base their model on hope, either. They have a certified plan to ensure a certain aircraft takes off, flies to its destination on time and arrives safely, even with bumps and variables along the way. Who are your qualified planners? What are the benchmarks you use?

What new benchmarks might you use? What new messages can be crafted to engage new buyers?

A Look through the Gender Lens Shows High Tolerance Problem

In the 2017 Women’s US Car Dealership Report, 54% of women buyers reported going to one (1) dealership and having a good experience. That is great news. But a resounding 46% of women said that they visited an “average of 3.2 dealerships” when buying a car. Why do we report this? This number is two times larger than the 1.6 average dealerships than the “average consumer” visits.

These statistics indicate that dealers have a high tolerance for women walking out of their store. Business must be good at some level to allow this. Even when it comes to online leads, only 5% convert to a purchase.

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What’s your Flight Plan?

A Frightening Signal for Change

Profound changes in the market will continue to put more pressure on the traditional dealership group.

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Time sharing, ridesharing and subscriptions are all on the rise. Mobile fleets from Amazon and Uber and more B2B platforms will drain market share from the dealer model. Dealerships will become mobile transportation centers. To be competitive, they will need to distinguish their brand and demonstrate they can retain customers with precision. Furthermore, dealers will need to showcase that they care about the women buyer — the decision maker — the one who has had the veto power all along. Until now, dealers have based their conventional message almost solely on price. But for women, that is not the top reason they buy from a dealer.

Retention — Now and On the Horizon

A sale is more than a oneoff deal. You’re selling futures.

Today’s sales are tomorrow’s future car sale. By focusing on women buyers, the average car dealership can increase annual revenue in sales. But the real opportunity is the lifetime value of these customers as well as their referrals to friends, family and trusted networks. Women are social and tend to use word-ofmouth. They use and post more reviews than men.

Inspiring Customer Experience — What If?

The majority of women consumers report they are apprehensive and uncomfortable about walking into and buying a car. It’s up to you to remove fear and apprehension for your customers. How will you do that?

A New Culture and Unpredictable Market

Understand the cultural marketplace and economic value of increasing diversity in your dealership. Make your sales and service programs reflect the demographic of your customers and guests. When consumers can buy from qualified front-line salespeople who are similar to them and get them, trust levels increase.

Digital engagement strategies that showcase the diversity in your customer base include more lifestyle and life stage images, which in turn creates a more engaged relationship.

Re-think your marketing messages and style of communication to ensure it isn’t conventionally masculine. Does your message show inclusivity? Do your reviews really help these buyers? Re-think how you present yourself.

Take time to think about what matters at your dealership. What steps do you take to ensure every market segment is addressed and their uniqueness is respected and valued? It is an exciting opportunity to understand each of your customers and work toward ensuring they return to buy their first and every subsequent car from your dealership as well as bringing their car to you for service. Your guests will recognize that you have engaged employees that wants to deliver a premium customer experience. And you will see that quality have a positive impact on your bottom line, even in a changing, unpredictable marketplace.

The top reason women report leaving a dealership without buying is “they didn’t like the way they were approached and treated” and “the sales advisor was off-putting, or her questions weren’t answered to her satisfaction.”

Today, it’s up to dealers to show more than “price” in their advertising messages. Women report they are looking for a relational interaction, yet most dealers continue to sell on transactional ones.

That is not to say price is not important to women, it just doesn’t carry the day.

Engage your women buyers’ population by inspiring advertising messages designed around values, product and dealership offerings. Demonstrate instore and on-line that you really help the consumer’s experience. Values of trust, authenticity and openness matter. How do you communicate these values versus the traditional ones of big inventory, best price, and competition?

What if you treated each customer so well that she

never considered visiting another dealership?

What if you had a process to reward each consumer

with a simple, memorable experience?

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What if your customers liked the experience of shop ping for a car so much, they told their friends about it and recommended your business?

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feature

Shifting Diversity into High Gear

by Deloitte Insights

shared with permission

Helping to close the auto industry’s talent gap

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ven as the automotive industry gears up to race ahead with electric mobility and selfdriving cars, it’s being held back by a deepening talent crisis. Women — an often largely underutilized resource in the automotive sector — can help pull auto companies out of this rut.

TODAY, women account for only 27 percent of the US auto manufacturing workforce as compared to about 47 percent of the overall labor force. In fact, a skills-gap study conducted by Deloitte forecasts a shortfall that will leave approximately 2.4 million US manufacturing jobs vacant through 2028 and beyond, while competition for talent is likely to increase.

This talent gap is counterproductive for companies looking to tap into the rising opportunities for innovation, transformation, and disruption being brought about by digital technologies such as artificial intelligence (AI), augmented reality (AR), and the Internet of Things — along with the move toward electric, autonomous, and connected cars and shifting consumer preferences. To develop a competitive advantage in this increasingly complex environment, auto companies should hire talented professionals with deep, diverse skills and experience from the broadest talent pool available.

By not working to promote an appealing work atmosphere conducive to gender diversity, some companies operating in the sector could be missing out on a key competitive advantage. In fact, if auto companies need more reasons to ramp up their efforts in hiring women and advancing their careers, there is substantial empirical evidence

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showing a strong correlation between diversity and positive financial performance at the corporate level.

Diversity of thinking in leadership enhances innovation by 20 percent.

At the same time, diverse groups are more adept at spotting risks, thus reducing their occurrence by 30 percent.

At the board level, having three female board members acts as a tipping point, resulting in positive median gains in both return on equity and earnings per share.

Deloitte and Automotive News, which have been working together for several years to explore the gender gap in the global automotive industry, surveyed hundreds of women working in the sector to gain a better understanding of their experience while identifying opportunities for improvement.

The insights generated from our most recent survey provide

automotive companies with some considerations they can use to create a gender-diverse workforce.

About the Study

The study was conducted in the fall of 2018 by Automotive News and Deloitte. More than 200 women responded to an online survey, representing original equipment manufacturers (OEMs), suppliers, dealers, finance companies, and other organizations throughout the automotive value chain. The purpose of the study was to generate a broad point of view on how companies can effectively recruit, retain, and advance women in the industry.

What Roadblocks Do Women in Auto Face?

We began our research on the state of women in the auto sector

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with a few simple questions: Why doesn’t the automotive industry attract a gender-diverse workforce?

What are the underlying factors that have contributed to the creation of a male-dominated industry? And what can auto companies do to create a more gender-diverse workforce?

The results of the study indicate that a number of underlying issues act as a barrier to women joining the auto industry. These include negative perceptions about the workplace environment — 65 percent of the respondents said that the work environment was unappealing; a perceived lack of work/life balance (59 percent); a lack of flexibility in work schedules (46 percent); and the lack of advancement opportunities (39 percent). See figure 1.

Despite these roadblocks, the study revealed some opportunities that auto companies can look to capitalize on in order to build a gender-diverse workforce. For example, more than half (53 percent) of the respondents said the promise of competitive remuneration and opportunities for challenging and interesting assignments were the top two reasons they would choose the automotive sector if they were to start their career over again. Unfortunately, the opportunity to capitalize on the promise of competitive pay packages is being significantly hampered by a general perception among survey respondents that a wage gap exists between women and men working in the industry.

So, Which Industries Do Women Want to Join?

While the automotive sector continues to struggle to create a genderdiverse workforce — only 1 percent of the survey respondents ranked auto as the best sector to work in — many other industries are doing significantly better at attracting and retaining women. Industries that showed a significant competitive edge in hiring women were education (38 percent), technology, media, and telecom (10 percent), financial 44

services (10 percent), consumer products (9 percent), and life sciences (9 percent).

Further, 47 percent of survey respondents said they would consider moving to another industry if they were to start again. The most attractive alternatives for this group are technology, media, and telecom (77 percent), life sciences and medical devices (55 percent), and financial services (54 percent).

Auto Companies Appear to be Moving Backward

A comparison of the results from the 2015 Women at the wheel survey to the current one suggests that women feel that things are worsening in the sector. For example, in 2015, 64 percent of the survey respondents said they had seen a marked or positive change in the automotive industry’s attitude toward women over the previous five years.

However, only 55 percent expressed the same opinion in the latest survey results. See figure 2.

As a result, only 14 percent of the women said they would fully encourage their daughters or female family members to pursue a career in the automotive industry, down from 21 percent in 2015.

Women also said that there are different standards of performance set for them as compared to men.

(Seventy-four percent of the women responding to our survey said this.)

In fact, 86 percent of them believe the standards set for them are higher than those set for men in the industry.

Further, nearly eight out of 10 survey respondents (79 percent) believe there is a pay gap between genders in the auto sector. This is problematic because even the perception of a pay gap can negatively impact the top reason — attractive remuneration — for women to stay in the auto sector.

Building a Gender-Diverse Workforce: Lead the Change with a Cultural Shift

The survey results indicate that the automotive industry has some work to do to create, retain, and advance a gender-diverse workplace. And the efforts should start from the top — at the industry leadership level.

To start with, industry leaders should address the problem of underrepresentation of women in the executive ranks. The study results suggest that 81 percent of women feel that a key contributor to this issue is a general bias in the industry toward having men in leadership positions. Other factors that are hindering the growth of women to senior management positions include unconducive organizational cultural norms (66 percent) and the lack of management support for women (50 percent).

Nearly 60 percent of the respondents said their employers have created formal and informal (sometimes both) networking groups to provide support and guidance to their female workers.

However, 58 percent of them said these groups haven’t been effective in advancing their careers. This, even though 54 percent of the women said that they have had significant involvement with T e x a s

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their networking groups over the course of their employment.

Executives and industry leaders should step on the gas pedal if they want to make the auto sector more appealing for women. Based on the findings of the study, we suggest they consider taking the following steps:

Start at the top: The cultural change should begin in the C-suite.

Senior leaders should be aligned and lead by example to impress the importance of diversity and inclusion (D&I) as a critical business priority.

The specific areas they should focus on through a diversity lens include succession planning, board composition, and hiring practices.

it should realign its cultural norms to make them more conducive for all; weed out the biases that discourage women from joining auto companies; help employees address their work/life balance needs better; facilitate them in drawing up their career maps; and provide adequate support and mentorship to help them speed ahead in the direction they want to go in.

Enhancing the representation and growth of a gender-diverse workforce across company ranks can, in turn, help enable auto companies to resolve

the ongoing talent crisis and thereby potentially fuel their innovation initiatives Deloitte OT&T practitioners combine deep transformation experience with practical business acumen. Our organization and people solutions incorporate an array of innovative tools and resources, powered by analytics, to enable sustainable change. You can find the full article on https://www2.deloitte.com/us/en/ insights/industry/automotive/women-inautomotive-sector-gender-diversity.html/.

Foster mentorship and sponsorship. Women say formal

and informal mentorship and sponsorship programs are the most effective tools a company can implement to help pave the way for attracting women to — and retaining them in — the industry.

Encourage women to pursue their career ambitions early and often. To combat

the perception of the industry’s worsening attitude toward women, leaders should find new ways to encourage women to pursue a career in the industry. These initiatives could include a focus on: STEM subjects, engagement in the manufacturing sector, high school programs, and support for innovation competitions.

Learn from other industries.

Nearly 40 percent of the survey respondents believe that the education sector is the best at attracting and retaining women. Automotive sector leaders should, therefore, develop a better understanding of what makes that sector so attractive and explore opportunities to leverage specific ideas that could help drive women to the automotive sector.

If the industry wants to attract and retain a gender-diverse workforce, March 2021

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.

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behind the wheel

Martin

And the Survey Says...

I

f you want to know someone’s age, ask them who is famous for saying, “And the survey says...” If they answer Richard Dawson, they are probably over 40.

If they respond, Steve Harvey or someone other than Dawson, they are under 40. And if they look at you like my 19- and 21-year-old daughters looked at me when I put that questions to them; well, it will make you question whether this was the right way to start this article in the first place.

Apparently, those kids don’t know it’s time for the TIADA Member Survey. And that is what has me walking and asking the question in my best gameshow host voice, “Aaaaand the Survey Says...” I don’t care what anyone says, that is classic TV at its best and it’s funny.

What do those kids know anyway?

I may be a geek about surveys and classic TV, but I am truly looking forward to this year’s TIADA Member Survey. Seven years ago, the TIADA Board of Directors made the decision to start capturing and recording pertinent member information through a scientific survey. Originally, we chose not to do an annual survey but to conduct a survey every three years.

Our first survey was 2014 and then again in 2017, then COVID-19 slowed down our 2020 survey, but this year the survey is back.

I look forward to seeing how you have fared over

by Jeff

TIADA EXECUTIVE DIRECTOR

the last four years. Specific questions of interest to me include: How is your inventory financed?

What is your average down payment?

What is the average retail price per unit sold? (we really saw this number jump from 2014 to 2017) On average, how much is spent per unit on reconditioning? (another number that moved significantly from 2014 to 2017) Does your dealership offer certified pre-owned vehicles?

Related to your dealership, which social media platform do you use to advertise? (Is Facebook still king?)

The integrity and quality of the survey is dependent upon your participation. A little over 80% of you will receive the survey in May. If you are so lucky, please complete the survey. We are seeking a statistically valid result with a confidence level of 95% and a confidence interval of 4. The more members who participate, the closer we will get to those numbers.

Obviously, the more participation, the better information and data we can provide to you. The final survey results will be revealed during the TIADA Conference and Expo in July. I don’t know about you, but when those results are announced, I will be quietly mumbling under my breath — And the Survey Says...

I may be a geek about surveys and classic TV, but I am truly looking forward to this year’s TIADA Member Survey.

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