Texas Dealer September 2019 by Texas Independent Auto Dealers Association

TIADA Welcomes 2019 President

In This Issue: – Michael W. Dunagan on Bills Affecting Independent Dealers From the 2019 Session of the Texas Legislature – 2019 TIADA Conference & Expo Wrap Up – Subprime Auto Finance and The Capital Markets

Robert Beck

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2019 TIADA Board of Directors

TexasDealer

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

contents

CHAIRMAN OF THE BOARD Juan Sabillón/Mi Tierra Auto Sales 7935 Gulf Freeway Houston, TX 77017

4 Officers’ Message

SECRETARY Ryan Winkelmann/BJ’s Autohaus 5005 Telephone Road Houston, TX 77087

7 On The Cover: TIADA Welcomes 2020 President Robert Beck

TREASURER Eddie Hale/Neighborhood Autos 1717 US 287 Decatur, TX 76234

14 Board of Directors Meeting Minutes 17 Legal Corner: Summary of Bills Affecting Independent Dealers From the 2019 Session of the Texas Legislature

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) Jose Engler/Irving Motor Corp 211 Braniff Dr. San Antonio, TX 78216 ICE PRESIDENT AT LARGE V Robert Blankenship/Texas Auto Center 6809 N IH-35 Austin, TX 78744 ICE PRESIDENT AT LARGE V Armando Villarreal/McAllen Auto Sales 4215 S. 23rd Street McAllen, TX 78503

by Eddie Hale, TIADA Treasurer

by Christopher Bean

by Michael W. Dunagan

18 Upcoming Events 19 TIADA Announce the Winner of This Year’s Marvin Norwood Scholarship 20 TIADA Auction Directory 2019 22 2019 TIADA Conference & Expo Wrap Up

by Christopher Bean

25 Paul Scott Named 2019 Quality Dealer of the Year

by Texas Dealer staff

28 2019 TIADA Conference & Expo Awards Wrap Up by Christopher Bean

31 T IADA Member Application 33 Subprime Auto Finance and The Capital Markets by Kenneth Shilson

37 Meeting of the House of Delegates 39 Online Review Best Practices for Business: Dos & Don’ts by Jason Dodge

44 Local Chapters 44 New Members 46 Behind the Wheel by Jeff Martin

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

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: Christopher Bean

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

officers’ message by Eddie

How a Code of Ethics Can Improve Your Dealership’s Compliance

ears ago, I reviewed the TIADA Code of Ethics. I liked what I read so much that we adopted the same thing here at our dealership almost word for word. I couldn’t help but think about the TIADA Code of Ethics during the House of Delegates meeting at the Annual Conference in July, where I was honored and excited about being elected as the next TIADA Treasurer. Simply put, I agree with TIADA’s Code of Ethics 100% and I think we need to promote and talk about it more often. I am struck by how they talk about fair dealings toward the public and toward each other. If we don’t look out for this industry, our customers and for each other, who will? I know so many good dealers who do live by this code and I believe that most of our TIADA members adhere to them. But I want to encourage you to share them with your peers and talk about the importance of taking care of our industry more often. I had the privilege of hosting a dealer roundtable during the conference this year, titled “Warranties vs. Service Contracts, what is right for your business?” We had a packed table and I felt encouraged as so many dealers at our table started the conversation by saying, “Our customers like this,” or “Our customers like that.” If we stay focused on our customers and take care of each other, the industry will take care of itself. If you haven’t read the TIADA Code of Ethics in a while, they are listed here. I hope you will print it out and hang it on your wall, I hope you will share it with your staff and peers and, most of all, I hope you will try to live by it.

Hale

Neighborhood Autos (Decatur) TIADA TREASURER

TIADA Code of Ethics

Dedicated to Fair Dealing The Association is comprised of the most successful and progressive used car dealers and associate members to be found. A list of these members may be found in the TIADA directory. Our members got where they are today by being dedicated to fairness and following a few simple rules, which we call our Code of Ethics. We will have a general duty of integrity, honor, and fair dealing toward the general public. We will comply with all city, county, state, and federal laws, and shall endeavor to keep ourselves informed of those laws, governing our business. We will not intentionally injure the business reputa tion of another member or competitor. We will employ truth and accuracy in advertising and selling motor vehicles. We will stand behind any guarantee given with the sale of motor vehicles. We will not perform any act, which would bring dis repute to the motor industry. We will expose or halt, where found, any scheme de signed to deceive or defraud the automobile buying public, and aid in prosecuting those guilty of such acts. We will constantly strive to improve business meth ods to the end that the public will be better served. We will encourage the American system of free enterprise.

Our members got where they are today by being dedicated to fairness and following a few simple rules, which we call our Code of Ethics. 4

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Dealer Academy 2019 Presents

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How to prepare for (and survive) an OCCC audit Your right to insurance proceeds Using the courts to get your car back Procedures to stay off the CFPB’s radar Techniques to avoid consumer lawsuits Properly handling financing on repairs Real-life DTPA court cases Body shops, mechanics, towing and storage issues Specific lien-protection steps Federal regulations affecting BHPH dealers Alternatives to traditional insurance Most common OCCC customer complaints How to respond to an attorney demand letter Repossessions: from A to Z Your rights in a bankruptcy Most common advertising violations Dealer issues in Comptroller audits

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Texas Independent Automobile Dealers Association

on the cover TIADA Welcomes 2020 President

Robert Beck by Christopher Bean

Texas Dealer Editor

obert Beck of Stop N’Drive Motors in San Antonio was elected TIADA state president at the 2019 House of Delegates meeting in San Antonio, Texas on July 21. Robert has been actively involved in TIADA for several years, serving on the board as region vice-president, treasurer, secretary and presidentelect prior to becoming the president. Texas Dealer visited with Robert to learn more about his background and his thoughts for the future of TIADA.

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Tell us about your personal history — where you grew up, family, education, other ventures, etc. I was born and raised in Idaho — let’s just say “a few decades” ago! Being raised on a potato farm, I learned from my parent’s example the importance of one’s willingness to embrace work. Because of the increasing scale of farming necessary

to make it in that business, my dad encouraged all of us to pursue careers outside of farming. My wife Peggy and I were married nearly 41 years ago. A couple of years after we were married, I completed a bachelor’s degree in accounting at Utah State University and took on employment with an international accounting firm in New Orleans, Louisiana. We moved our young family to San Antonio in 1987 and have been here ever since. I guess you could call me a carpetbagger since I’m not a native Texan, but as I like to tell people both inside and outside of my family — “I wasn’t born in Texas but I got here as fast as I could!” We have four children, three of whom live in San Antonio and one rebel who works for Amazon in Seattle. Our children have given us ten grandchildren who range in age from 1 to 13, so it does get a little “busy” around our house during holidays or other special occasions. In addition to working for the accounting firm for a few years, I served as a sales representative for

automotive sales training workshops, as well as producing the workshops for several years. In 1996 we opened and ran a CRM (Customer Relations Management) service for franchise dealers in the San Antonio – Austin corridor. For the last 14 years we have owned and operated Stop N’ Drive Motors in San Antonio, concentrating on Buy-Here Pay-Here sales and service.

How did you get into the car business? My uncle has owned his used car lot in Idaho Falls, Idaho for my entire life. When I was in college, he asked me if I’d like to buy a few cars and trucks periodically at Brasher’s Salt Lake City Auto Auction and sell them to neighbors, friends and family. I didn’t realize it at the time, but I curbstoned my way thru college! After graduating debt-free 8

and working for the accounting firm for a short time, I realized that my heart was in sales, not in auditing the books and preparing tax returns. It took me a few years in a sales position related to the automotive business to raise the capital needed to start our Buy-Here Pay-Here lot. While I have appreciated the business skills acquired in college and the accounting firm, I have never looked back. Sales and independent business have been what has raised my family and given me hope for the future for years now.

Could you summarize your personal business philosophy? After we opened our lot, I was concerned about this new agency being formed called the Consumer Financial Protection Bureau (CFPB). Some of their representatives and advocates from D.C. were hosting

a meeting here in San Antonio to seek public comment. So I attended. After listening to the dialogue from trial attorneys and consumer advocates about how used car dealers are predators who seek out customers to trick them into buying vehicles they cannot afford, I was just furious! When they asked for comments, I raised my hand. I explained to the panel that we as dealers do everything we can to help our customers every day, and the LAST thing we ever want to do is repossess a vehicle. I told them our business model is built entirely upon getting customers into vehicles they can afford — so we can collect payments instead of cars. That we thrive on repeat and referral business. I ended by telling that panel — I was a proud member of the Texas Independent Automobile Dealers Association and I didn’t know of ANY dealer in our association who T e x a s

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mirrored the descriptions they had been painting all day! I believe in treating our customers with respect, appreciation, and how I would want to be treated. I believe whenever customers walk onto our lot, we have a responsibility to do the right thing for them. We focus on selling them a vehicle that fits their needs and their financial situation. I am interested in building customers for life, not just a few months.

How did you first get involved with TIADA?

When we opened Stop N’ Drive Motors in 2005, we joined TIADA before we even opened our doors for business. I had spent so many years in the business of advocating the increasing of one’s knowledge and sales skills in the automotive industry, that it seemed not only logical but essential to seek out the best of knowledge regarding this business. Especially considering the amount of regulation we have to live with. Not too long after my visit with the CFPB advocates I mentioned earlier, Jeff Martin approached me and asked if I would serve on TIADA board of directors. A few years later I served for two years as the local San Antonio chapter president. Now I’ve been called upon to serve as your president. It’s been a great experience for me along the way, as I’ve had the pleasure of working with and learning from some of the best used car dealers in Texas. Serving with my fellow TIADA members over the years, as well as with Jeff and his team at the state office has been a very fulfilling experience for me.

What challenges do you foresee in the coming year? I’m concerned about the reducing numbers in the Texas dealer body. Over the last several years, the overall number of dealers has decreased due to more dealers exiting the September 2019

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business than new dealers beginning operations. This is reflected also in the number of dealers who are members of TIADA. We’ve gone from 1,575 a couple of years ago to 1,350 today. I’m also concerned always about apathy among some dealers when it comes to joining and supporting membership in our association. There are dealers who take for granted the benefits of having a professional dealer association such as ours — i.e. deferred sales tax in Texas, protection from the classaction sales tax financing lawsuit, the banning of named-driver-only insurance policies, the reduction in the bond for service contracts, or

the protection against predator mechanic’s liens just to name a few. But they do not see the need to support such efforts presently by being a member or participating with us politically. Others in TIADA before us have sacrificed, paid, and worked to make these and many other benefits a reality for us. We owe it to them and to those who come behind us to be diligent in the protection and improvement of our industry.

What do you think the role of TIADA should be? TIADA is a resource, an advocate, and a protector. TIADA is a great resource for anything you need as an independent Texas

dealer. Over the years, I’ve called the TIADA office when I needed a dealer referral for either a repossession agent or mechanic in another part of the state. I’ve found eager and willing assistance from fellow TIADA members several times in the recovery of a vehicle, including the storage and disposition of my collateral. I’ve called the TIADA office regarding legal matters and issues with various regulatory agencies. We have attended numerous educational classes provided by TIADA over the years. Especially useful has been the training provided by Mr. Michael Dunagan regarding compliance issues and the proper and legally safe way to repossess a vehicle in Texas. Not to mention the education available at the Annual Conference regarding the marketing of our business, the sharing of ideas among fellow dealers, and other governmental compliance education such as dealing with the OCCC, TxDMV, etc. September 2019

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TIADA also works tirelessly watching out for our best interest as Texas independent dealers in the Texas Legislature. What many dealers don’t realize is that during the legislative session, Jeff and his team spend as much or more time watching bills introduced by other industries which could be hurtful or damaging to our business as they do in promoting and passing bills which are helpful for us. As in any good football or basketball game, both offense and defense are critical in legislative matters. If not

for TIADA, then who would be there to do this for us? To me, the $499 annual membership fee is a no-brainer for all the reasons I’ve mentioned above. Let alone the auction app which dealers can use to recover our entire cost of belonging to TIADA. As a business owner and dealer, it’s comforting to know that I have all of these resources working for me for a net cost of $0.00 per year when considering the auction fees saved thru the auction app.

What future do you see in TIADA?

I see a glorious future for our association. In all the years I’ve been involved in TIADA, I’ve met only individuals who’ve shown an unselfish interest in promoting the welfare of our dealer body. We also have the best staff of any dealer association in the United States of America, both in the office and at the legislature. With the recent passage in the legislature of the dealer pre-licensing requirement, our association is positioned exceptionally well to be a key player in providing these courses and other services to future dealers. Therefore, we will have significantly more positive exposure to new Texas independent dealers. This bodes very well for the future of our association.

Do you have any final thoughts or a message for our members?

As I mentioned earlier, I didn’t seek this role, but I feel responsible to give back to an association that has given me so much. I see TIADA as our platform to protect our industry. I’m going to do the best job I can as your president, but I’m also going to ask you to do me a couple of favors; 1. Please help the association grow our influence by advocating to every dealer you know to join TIADA. 2. Please go out into your communities this year to seek out and meet your legislators in your home district. They ARE open-minded and they do WANT to talk with you! 3. Please… find a way to share your talents with our association. We need you. Trust me on this — if this ex-curbstoner has something to share, so do you! Thank you, and I look forward to serving you.

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board of directors meeting minutes July 21, 2019 | JW Marriott, San Antonio, TX

compiled by Texas Dealer staff

At its meeting on July 21, 2019, TIADA took the following actions: President Juan Sabillón called the meeting to order at 12:36 p.m.

A motion was made to accept the minutes. Moved by Greg Zak, seconded by Vicki Davis — PASSED

Executive Director’s Report

Treasurer Ryan Winkelmann presented the Treasurer’s report. A motion was made to accept the report. Moved by Mark Jones, seconded by Robert Blankenship — PASSED

Jeff Martin talked about annual conference registration, special legislative guests, other VIPs, explained IDEA program, covered conference agenda and expectations for BOD members. Mario Martinez, legislative consultant, thanked BOD members for legislative cooperation.

Minutes of the Last Meeting

Secretary Mark Jones presented the minutes from last meeting.

Treasurer’s Report

President’s Report

President Juan Sabillón presented the President’s report. He talked about his visit to the Valley, Victoria and El Paso meetings. Executive Board went into closed session at 3:07

New Business

Treasurer Ryan Winkelmann went over the FY19 budget and presented the FY20 budget update. Jeff Martin commented on the FY20 budget update. A motion was made to accept the proposed FY20 budget. Moved by Brad Kalivoda, seconded by Eddie Hale — PASSED A motion was made to spend $48,000 from the reserve account on required pre-licensing education course. Moved by Mark Jones, seconded by Eddie Hale — PASSED Juan Sabillón adjourned the meeting at 3:35. Respectfully submitted, Mark Jones, Secretary A complete copy of any reports referenced in this document and more detailed notes from the meeting are on file at the TIADA office and available upon request. Many more Consignors @ DAAOKC.COM

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legal corner

Summary of Bills Affecting Independent Dealers From the 2019 Session of the Texas Legislature

he Texas Legislature regularly opens its doors for business for six months every oddnumbered year (although there are occasionally special called sessions, usually to address specific issues). The 2019 regular session is now in the books with some important changes that affect independent dealers. Most bills that are passed and signed by the Governor have an effective date of September 1. However, there are some bills designated as being emergency in nature that become effective upon signing by the Governor. Other bills, especially those that involve the drafting of agency rules, or administrative steps in preparation for implementation, may specify an effective date of January 1 or even later. The following is a summary of the provisions of selected bills that were considered in the 2019 regular legislative session that have, or would have had, an impact on Texas dealers.

House Bill 259 by Rep. Ed Thompson of Pearland addresses issues raised by the use of named driver-only automobile insurance policies. This bill, which becomes effective September 1, 2019, but which applies only to policies issued or renewed after January 1, 2020, prohibits the issuance of named driver policies. Named driver policies are defined as policies that name a specific driver, but exclude coverage when a vehicle is driven by someone else who resides in the household and is operating the vehicle with permission. Insurers may still exclude a named driver from coverage if that person is September 2019

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specifically named and the named insured accepts the exclusion in writing. BHPH dealers have been authorized by the Office of Consumer Credit Commissioner to reject named-driver-only and excluded-driver policies as not meeting the requirements for adequately insuring the dealerâ&#x20AC;&#x2122;s collateral, when it is reasonably expected that non-covered persons will be operating the vehicle. But Texas car creditors and Texas drivers have not been able to anticipate or control the type of liability insurance that is carried by a third party which is at fault in an accident. This bill should add to the reliability of and expectation of coverage to lien holders and the Texas motoring public. TIADA supported Rep. Thompson on this bill as it has done in past sessions.

by Michael

Dunagan

TIADA GENERAL COUNSEL

Named driver policies are defined as policies that name a specific driver, but exclude coverage when a vehicle is driven by someone else who resides in the household and is operating the vehicle with permission.

House Bill 4120 by Rep. Eddie Lucio III of Brownsville expands the opportunities for Texas dealers to sell service contracts to their buyers. Prior to passage of House Bill 4120, dealers who wanted to issue service contracts to sell to their customers faced the same financial security requirements (a minimum of $250,000) as did commercial concerns who sold contracts to the

public. This bill offers a lower financial security figure (as low as $25,000, depending on gross revenue generated) to a licensed dealer who sells only to customers who purchase vehicles from the dealer. It is anticipated that the Texas Department of Licensing and Regulation will issue specific rules and forms for implementation of the dealer exception. This bill takes effect September 1. TIADA supported this bill and worked with Rep. Lucio and Sen. Jose Menendez of San Antonio including 17

providing committee testimony and working with TDLR on the final bill language.

House Bill 3420 by Rep. Stan

Upcoming Events TIADA EVENTS October 2019 2 1 Board of Directors Meeting Austin, TX

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

September 2019 09

BHPH Compliance: A Comprehensive Workshop Sheraton Suites Market Center Dallas 2101 North Stemmons Freeway Dallas, TX 75207 214.747.3000

October 2019 07

Better BHPH Financials: How to Get Organized for Growth Sheraton Houston Brookhollow Hotel 3000 North Loop West Houston, TX 77092 713.688.0100

Keeping Your Dealership Legal and Compliant El Paso, TX

November 2019 04

Collect the Cash, Not the Car Austin, TX

Lambert of Abilene addressed an issue that arose when some automobile insurers changed their policies to exclude automatic coverage of “temporary vehicles” which insureds used to replace vehicles being repaired. This bill requires personal automobile policies to include liability and property coverage for vehicles loaned by repair facilities for “service, repair, maintenance, or damage or to obtain an estimate.” Coverage would cover the person named in the policy and any resident relative of the insured. The bill takes effect September 1, but only applies to policies issued or renewed on or after January 1, 2020. TIADA supported this legislation.

House Bill 3059 by Rep. Justin Holland of Rockwall was an attempt to remove a vehicle purchaser’s mandatory designation of the county of transfer under current law, and do away with the VTR-136 County of Transfer form. The bill was supported by TIADA, but received opposition from some rural legislators and did not pass. House Bill 3843 by Rep Tracy King of Laredo arose out of some cases involving dealers who closed down without transferring titles on vehicles sold. The bill offers an aggrieved purchaser the opportunity to apply for title directly to the Texas Department of Motor Vehicles, and to also apply for a 30-day permit to operate the vehicle. The state is authorized to waive fees that the buyer has paid to the dealer. The bill also provides that fees waived under this provision can be recovered against the dealer bond of the out-of-business dealer. The bill was passed and goes into effect September 1, 2019. House Bill 3225 by Rep. Drew Springer of Gainesville was brought

at the request of TIADA in an attempt to lessen the mandatory penalties in the Tax Code for failure to timely file Vehicle Inventory Tax reports. The bill would have reduced the penalty from $500 per month to $100 per month, and given tax assessors and chief appraisers more discretion in levying fines. The bill passed the House and was approved by the Senate Finance Committee, but was not heard on the Senate floor before time ran out.

House Bill 1087 by Rep. John Kuempel of Seguin authorized metal recyclers and used automotive parts recyclers to purchase certain vehicles without first obtaining a title certificate. As originally filed, the bill would allow recyclers to purchase vehicles that were 10 years old or older for purposes of parting, dismantling, or scrapping without requiring a title certificate or checking for a lien on the vehicle. TIADA opposed the bill as filed and worked with the bill’s author to increase the minimum age of an eligible vehicle and to offer more protection for lien holders in subsequent versions. The bill did not pass. Senate Bill 604 by Sen. Dawn

Buckingham of Lakeway and Sen. Brian Birdwell of Granbury is the socalled “Sunset” bill to keep The Texas Department of Motor Vehicles in operation and to address various issues raised by the Sunset Committee between legislative sessions. The bill, among other things, extends the life of the DMV for 12 years. It also contains a provision that requires each county tax assessor-collector to make electronic titling services available to motor vehicle dealers. Of particular interest to independent dealers is a provision that would require DMV to set up rules regarding mandatory education requirements for all original applicants for an independent dealer general distinguishing number, and a one-time education requirement for a renewal applicant. The education would consist of webbased training developed or approved T e x a s

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by DMV. Dealers who have held a license for 10 or more years as of September 1, 2019, the effective date of the law, will be exempt from mandatory education upon renewal. TIADA will be working with DMV in the rule-making process in establishing educational requirements and content.

House Bill 1442 by Rep. Chris Paddie of Marshall is the “Sunset” bill for the Office of Consumer Credit Commissioner. The agency’s life is extended to September 1, 2031 by the bill. 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.

TIADA Announce the Winner of This Year’s Marvin Norwood Scholarship

his year’s winner, Gabrielle Woodcox, comes from Clear Creek Independent School District in League City. Gabrielle graduated from Clear Falls High School and will be attending Texas A&M University this fall where she will be studying biology and pursuing a pre-med degree. Gabrielle’s family has owned and operated independent used car dealerships for many years in the Baytown Texas area. Gabrielle said that growing up in a family of car dealers meant that she spent many days on the lot, washing and cleaning cars and getting sunburned. She can even check and change her own oil. Congratulations Gabrielle Woodcox, the 2019 Marvin Norwood Scholarship recipient.

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NEW

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.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

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 NEW

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

AMERICA’S AA AUSTIN / SAN ANTONIO 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

INSURANCE 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

www.metroautoauction.com 8605 Cullen Ln., Austin, TX 78748 512.282.7900, Fax 512.282.8165 GM: Brent Rhodes 3rd Saturday, monthly $AVE : $200

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 9426 Lakefield Blvd., Dallas, TX 7520 214.646.3136, Fax 469.828.8225 GM: Chris Dean Wednesday, 1:30 p.m. $AVE : $200

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

NEW

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

TEXAS LONE STAR AUTO AUCTION

AMERICA’S AA DALLAS

www.tlsaa.com 2205 Country Club Drive Carrollton, TX 75006 214.483.3597, Fax 214.483.3814 GM: Patrick Stevens Tuesday, 1:00 p.m. / Thursday, 2:00 p.m. $AVE : $200

IAA DALLAS*

El Paso

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 www.iaai.com 204 Mars Road, Wilmer, TX 75172 972.525.6401, Fax 972.525.6403 GM: Joshua Boyd Wednesday, 9:00 a.m. $AVE : up to $200 Sell Fee

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 T e x a s

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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

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*

Midland Odessa

IAA HOUSTON NORTH*

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

www.iaai.com 2535 West. Mt. Houston, Houston, TX 77038 281.847.4700, Fax 281.847.4799 GM: Alvin Banks Wednesday, 9:00 a.m. $AVE : up to $200 Sell Fee www.iaai.com 16602 East Hardy Rd., Houston-North, TX 77032 281.443.1300, Fax 281.443.4433 GM: Christina Nieves Thursday, 9:00 a.m. $AVE : up to $200 Sell Fee

MANHEIM HOUSTON

Harlingen/McAllen IAA MCALLEN*

www.iaai.com 900 N. Hutto Road, Donna, TX 78537 956.464.8393, Fax 956.464.8510 GM: Ydalia Sandoval Tuesday, 9:00 a.m. $AVE : up to $200 Sell Fee

BIG VALLEY AUTO AUCTION**

www.bigvalleyaa.com 4315 N. Hutto Road, Donna, TX 78537 956.461.9000, Fax 956.461.9005 GM: Lisa Franz Thursday, 9:30 a.m. $AVE : $200

www.manheim.com 14450 West Road, Houston, TX 77041 281.924.5833, Fax 281.890.7953 GM: Brian Walker Tuesday, 9:00 a.m. / Thursday 6:30 p.m. $AVE : $100

MANHEIM TEXAS HOBBY

www.manheim.com 8215 Kopman Road, Houston, TX 77061 713.649.8233, Fax 713.640.6330 GM: Darren Slack Thursday, 9:00 a.m. $AVE : $100

Longview

ALLIANCE AUTO AUCTION LONGVIEW

Houston

ADESA HOUSTON

www.adesa.com 4526 N. Sam Houston, Houston, TX 77086 281.580.1800, Fax 281.580.8030 GM: Michael Schenks 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 Monday, 6:30 p.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

AUTONATION AUTO AUCTION - HOUSTON TEXAS LONE STAR AUTO AUCTION** www.autonationautoauction.com 608 W. Mitchell Road, Houston, TX 77037 822.905.2622, Fax 281.506.3866 GM: Mike Green Thursday, 6:00 p.m. $AVE : $200

HOUSTON AUTO AUCTION

www.houstonautoauction.com 2000 Cavalcade, Houston, TX 77009 713.644.5566, Fax 713.644.0889 GM: Tim Bowers Tuesday, 1:00 p.m. $AVE : $200

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www.lsaalubbock.com 2706 E. Slaton Road., Lubbock, TX 79404 806.745.6606 Wednesday, 9:30 a.m $AVE : $75/Quarterly

Lufkin

LUFKIN DEALERS AUTO AUCTION

www.lufkindealers.com 2109 N. John Reddit Dr., Lufkin, TX 75904 936.632.4299, Fax 936.632.4218 GM: Wayne Cook Thursday, 6:00 p.m. $AVE : $200

IAA PERMIAN BASIN*

ONLINE

ACV AUCTIONS**

www.acvauctions.com 800.553.4070 $AVE : $250

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

ALLIANCE AUTO AUCTION WACO

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. $AVE : $200

feature

2019 TIADA Conference & Expo Wrap Up by Christopher Bean Texas Dealer Editor

n July TIADA members traveled to San Antonio to attend the 2019 Conference & Expo, one of the most successful in recent memory. Almost 300 dealers, many of them first time attendees, came to hear from some of the industryâ&#x20AC;&#x2122;s leading experts who

presented over 20 hours of breakout sessions. In addition to the education offerings, attendees walked our sold-out Expo Hall featuring over 100 vendorsww. They also heard and witnessed an inspiring and captivating keynote address â&#x20AC;&#x153;Portrait of Change: Innovative

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or Irritating” presented by speed painter and speaker, Tim Decker. TIADA is always working to grow the association’s political influence in Austin, and that growing influence was apparent at this year’s conference. Several state lawmakers found time to get away from their districts and speak to attendees about the 86th Legislature and key issues affecting the industry. To start the conference, State Representatives Ryan Guillen and Armando “Mando” Martinez spoke during the House of Delegates. State Senator Carol Alvarado addressed attendees at the Opening General Session the following day. Then on Tuesday, State Senators Beverly Powell, Bryan Hughes, and Jose Menendez participated in a discussion panel hosted by TIADA Executive Director Jeff Martin during the Legislative Update. Finally, State Representative Ed 24

Thompson was awarded the TIADA Independent Award for his efforts to pass HB 259 (named driver insurance reform) during the Presidential Awards Banquet. The legislators all stressed the importance of dealers getting involved with the legislative process by communicating with their specific representatives. The conference ended on a high note when Mark Jones of MCMC walked away with the $10,000 Special Membership prize, sponsored by America’s Auto Auction. The ATV winner was Jesse Lucio, Jr. with English Motors in Brownsville. Thank you to all the dealers and sponsors that made this year such an outstanding success! Don’t forget to mark your calendars for August 16-18, 2020 when we will be returning to JW Marriott in San Antonio. We can’t wait to see you there! T e x a s

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September 2019

feature

Paul Scott Named 2019 Quality Dealer of the Year by Texas Dealer staff

his year’s recipient of the prestigious Texas Quality Dealer of the Year was Paul Scott of Fiesta Motors in Lubbock, TX. Scott is a past officer of TIADA and currently serves on the Texas Department of Motor Vehicles Board. Scott was speechless for few moments and then he thanked the dealers in the room, his family and

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his team back home. He said, “I never thought this would happen to me, what a privilege it is just to get to do business in this state.” Congratulations, Paul Scott!

Dealer Academy

in partnership with

Present

Better BHPH Financials: How to Get Organized for Growth Presented by Kevin Roy, CPA, a principal with the dealer group at CliftonLarsonAllen, one of the nation’s top 10 CPA and consulting firms. The craziness of a busy BHPH operation can make it tough to plan for future growth. But sometimes you need to take a few hours off from working IN your business so you can work ON your business. This ½ day seminar will demonstrate how better organizing your financial and operations structures can be the key to growing your portfolio. Participants will learn:

9:00am - 1:00pm $99 TIADA Members, $49 Additional Members, $199 Non-members

• • • • • • • • • •

How to increase their credit line, and/or establish a new line How some of the new tax code will affect your dealership The importance of presenting clean, clear financial statements Cash flow management (the key to future planning) How to determine how many units you need on hand How to determine how many dollars you need on hand Static pool analysis, what it is and how it works How to properly value inventory, including turn time How to read financial statements Proper expense allocation and costing

Sponsored by:

www.claconnect.com

www.avpadmin.com

Texas Independent Automobile Dealers Association

Monday, October 7, 2019 Houston, Texas Sheraton Houston Brookhollow Hotel 3000 North Loop West • Houston, TX 77092 713.688.0100 Register online at www.txiada.org or by phone at 512.244.6060.

NOW THAT MY CASH ISN’T TIED UP IN INVENTORY I CAN DO MORE OF THE THINGS I USED TO JUST DREAM ABOUT. THAT’S MY PATH TO +MORE

CHRIS TINGLER | CAR SHOP INC. | COVINGTON,VA

I used to be a cash buyer, but now that we have a NextGear Capital floor plan to buy inventory, our money is funding the upgrades and lot improvements we thought were 5-10 years off in the future.

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

feature

2019 TIADA Conference & Expo Awards Wrap Up by Christopher Bean Texas Dealer Editor

his year’s successful TIADA Conference & Expo concluded on Tuesday with the Presidential Awards Banquet. During the banquet, several men and women were honored for their work over the past year. Among the first to be recognized were the top recruiters who worked to grow TIADA’s membership. Mark Brown of Red Carpet Auto Sales and Chris Elkins of MD Auto Sales were honored with NIADA Eagle Awards. These awards are given to those who recruited at least 20 members. Next, Jose Engler of Irving Motors was awarded the NIADA Crystal Eagle. These dealers recruited over 100 new members in the past two years. Then the association honored Texas Representative Ed Thompson with the highest award given to non-dealers, the Independent Award. Over the years Representative Thompson has introduced legislation to limit the unintended consequences that

named driver insurance policies have on independent automobile dealers and consumers in Texas. During the recent 86th Texas Legislature, HB 259 (relating to named driver insurance policies) was finally passed and signed by the Governor. This bill goes into effect on September 1, 2019. Thanks again to Rep. Thompson for your perseverance! Finally, 2019 TIADA Quality Dealer of the Year Paul Scott announced this year’s Quality Dealer of the Year Award — of Fiesta Motors, Lubbock. Congratulations to all the winners!

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September 2019

LOCATIONS

BUY ONLINE AT www.AmericasAutoAuction.com

Atlanta, GA Austin, TX Baton Rouge, LA Birmingham, AL Boston, MA Bowling Green, KY

Chicago, IL Dallas, TX Detroit Toledo, OH Greenville, SC Harrisburg, PA Houston, TX

Interstate 94, MI Jacksonville, FL Lancaster, PA North Houston, TX Pensacola, FL Pittsburgh, PA

Austin

LOCATIONS IN TEXAS

Dallas

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

St Louis, MO Tulsa, OK Virginia Beach, VA West Michigan, MI

TUESDAYS & THURSDAYS AT 1PM

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

Houston

THURSDAYS AT 1:30PM

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

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

North Houston

MONDAYS AT 6:30PM

1440 FM 3083 Conroe, Texas 77301 Phone: 936.441.2882

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e-Tag Supplies —

In Stock for Immediate Shipment!

MOTO

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purchased. vehicle being the motor interest in NT(S ) a security NPA YME Due I give you Date ED DOW owe you, DEF ERR or in the future charge of owe you Amount a late debt I now I will pay any other it is due, ses in it and days after my promi ct and all within 15 payment Charge. on this contra ce sts, owe entire I all ve my of the Finan lt, security intere p this To secure d of part do not recei Security: defau (1)Kee writing. get a refun t nonpayment, ge: If you ises in paym ent. so, I can NO.: Late Char n abou $ all prom sched uled . If I do ds. STOCK put....... informatio % of the er to........ I owe early yment refun ment for deal........ the ........ and prepa pay all that refer to this docu Ask........ rce. ........ nt: I can uled date, I will ............... DATE: to enfo Prepayme l Information: e the sched cult........ REDITOR: diffi........ full befor are........ SELLER/C ises........ Additiona repayment in .$ D prom........ ER : red ................ ................ FINANCE : Spo VIN NUMB ces) ken ADDRESS any requi servi ................ ANT AMO UNT ... $ ORT s, and ................ IMP sorie , ST, ZIP: ION OF ................ ........ acces CITY IZAT ........ ITEM YEAR ................ uding any ................ form. ........ER: ..$ e) ........ ........BUY PHONE: price: (Incl Color: ................ (2) R:abov box 1. Cash ................ UYE L .............. ment follow ing: CO-B(s) ment ....$ ................ MODE........ fied, the Downpay ................ 2. 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TIES FOR -in (if nega ................ part of these No.: ........ ........ trade ........ keep Stock er may = net ............... .$ ................ WARsRAN ................ lf (Sell ................ payment ................ minu 2) my beha price (1 ................ ................ Total down others on of cash ............$ ................ ................ paid to .: balance ss ................ ................ V.I.Nany.................. amounts 3. Unpaid y) ........ regardle company.. including ance ance comp Services tive equit repairs charges insurs, r and insur to any (nega to Othe $ ff 4. ... y for paid payo ance paid Accessorie insur trade-in onsibilit insurance Options,or companies damage A. Net $ damage no resp ...mes physical TOTAL company of physical er assu $ rages with CE $ insurance B. Cost ... nal cove . The deal paid to CASH PRI of optio REPAIRS t insur ance C. Cost $ nal credi Gross FOR ANY cle. e $ .. .............. of optio Phone: COSTS vehi Allowanc ................ D. Cost .$ L PAY ALL nts about the ........................ Trade-in ................ Life anyeme YOU WIL comp .... ........ ........ ff $ ....... $ ance ................ oral stat ........................ -in Payo insur any ................ Disability Net Trade ................ to theof ........ $ ........To: .......... ........ ........Lien ance paid Show ............. nt agencies.. . ........ insur ........ r rnme ........ ........ ........ gove Bala nce $ E. Othe $ ................ ................ paid to ................ ............ Unp aid Pric e ial fees ................ ................ ................ ....... ........ ling s for F. 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Documents relating $ gati (4) ón ment ... Fee icaciir obli docu de manejo docu Mileage: repa of Title s rario de Esta notif Year: purpose) (5) ... $ Un hono r como gasto las partes. ........ $ describe mentary $ ........ D: and Docu e: ........ compradoe acordada por ERE ** is paid (6) ................ Phon............... $ S COV for Fee ify who razonabl identTEM ................ ........ V.I.N.: SYS (7) $ (Seller must ................ ................ for ............. r charges ................ ................ ................ N. Othe sed ........ sed ........ asses ......... $ ff To: .......... ........ ge isPayo ge is asses ................ to ce Char ce Char ................ ........ $ Finan ........ Finan .... ........ on, ...... ........ which the ................ which the to ................ ................ sthestateinspecti ges Upon ges Upon ................ ................ IftheSellerperformts,andothercharges. ssed) ess: ................ zed Char zed Char . ge is Asse Addr ........................ ................ contrac mentagency. Plus Itemi Total Itemi ce Char ................ athirdpartyorgovern oftheinsurance,service Balance $ TAL ................ h No Finan Unpaid ................ Seller to SUB-TO than $ retainparts ................ 5. Total insurer By: (Upon Whic ................tion fee will be paid by theSellermayalso nt not more have. The ................ Quoted loss. Sales Tax ................ inspec Seller and I already damage ornot been ctible amou 6. Total (5 + 6) ........ ered of has Sales Tax) agencies. Any statefee will be retained by $ of insura in:nce with a dedu Financed e proof trade ment in the eventtime andATION OF Cash Tend ssed Upon service : nt I owe, or provid to any 7. 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Subprime Auto Finance and The Capital Markets by Kenneth Shilson, CPA

Founder/President, Subprime Analytics/NABD

nyone who is already in the subprime auto finance business and those who are considering entering it, are aware that the availability of subprime auto finance capital has tightened significantly during the last 24 months. In this article, I will discuss this subprime market shift, why it happened, and the current expectations of capital providers to this segment of the auto finance industry. The unprecedented growth in the subprime auto finance industry from 2013 to 2016 was fueled by “cheap money” which poured into this market segment by Wall Street firms through auto bond securitizations. The investment risk associated with these securitizations was passed to investors who were seeking “high-yields” in a “low-yielding” environment. Many of these securitizations included subprime deals with

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customers who had credit scores below 500 or no credit score at all! These were packaged with higher credit quality loans to help mitigate default risk and to provide a more stable stream of cash flow. In the investor euphoria, auto bond securitizers with virtually no underwriting or collection experience with subprime customers aggressively entered the market along with securitizers who had subprime experience. The result, many of the aggressively underwritten subprime deals have subsequently defaulted and these securitizations failed to produce the yields expected by their investors. These failures, the heightened regulatory environment, and fears of a recession or an economic downturn caused a tightening of the capital flowing into the subprime auto finance industry. Wall Street shifted their emphasis to prime and near-prime deals starting in 33

the second half of 2016 and regulated financial institutions (banks) followed that lead. An exception to this subprime “credit shift” has been credit unions! During the last two years, according to Experian, credit unions have increased their funding of auto finance receivables (which aggregated nearly $1.2 trillion outstanding at March 31, 2019) to an approximate 30% of the market share. Credit unions are now the second largest capital provider to the auto finance business (second only to banks in funding market share) according to Experian data at March 31, 2019. Much of that growth has been from used car financings. Although credit unions continue to aggressively finance used vehicles, overall growth in the subprime market since 2016 has declined and reduced the competition previously fueled by securitizations. In my opinion, this subprime market shift creates an exceptional opportunity for independent dealer/operators to regain used vehicle market share at a time where new vehicles have become “unaffordable” for subprime customers and for many other Americans! At March 31, 2019, according to Experian, subprime was 48% of all used vehicles financed. However, to capitalize on this profit opportunity requires capital; so I will devote the remainder of this article on ways to attract it! EPI-TIADAhalf August2019.pdf

8/2/19

Capital providers who fund lines of credit, floor plans, or who purchase installment contracts are much more “risk adverse” now due to the factors mentioned previously. As a result, new lines of credit and renewals are on tougher terms, with lower advance rates. Floor planners are more cautious in offering vehicle acquisition financing to operators and the prices paid for purchases of contracts has tightened. For retailers (those who do not hold their own contracts) fewer third-party indirect financing sources are available for those operators who must rely on outside financing. In the current market, here are some important things that capital providers are looking for:

For Lines of Credit

1. A ccess to your data is critical. “Big data” is not just a buzzword. Lenders want direct access to your DMS system data prior to originating a line of credit and thereafter in order to monitor performance. Therefore, your DMS system needs to store an extensive database and provide secure access when authorized. Borrowers must use their data to make informed decisions and to adapt quickly to changes in market conditions. 2. Operators also need a compliance management system, directed by a chief compliance officer.

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Purchasing contract forms from a credible thirdparty does not satisfy this requirement. Operators must demonstrate that their procedures and practices match what their contracts indicate and written policies for underwriting and collections are needed both internally by your staff and externally by lenders. 3. Portfolio performance metrics like static pool, loss/ liquidation and default rates are needed to validate your portfolio performance. Lenders expect borrowers to “keep vehicles sold” and their customers paying. Static pool measures the frequency and severity of payment defaults, while loss/liquidation rates measure the pace of those losses. Lenders use default rates to measure the volatility and quality of a portfolio. If you don’t have these today, you will have a difficult time borrowing money tomorrow! For examples of these metric calculations, view my video on the home page at www.subanalytics.com. 4. Lenders want to see consistency in your business model. Frequent changes invalidate the performance metrics mentioned in (3) above. Your business model must be cash efficient which can grow on a lower advance rate and generate a higher return on investment. Financial statement accrual basis profits don’t always convert into cash in subprime auto finance and defaults become “fools gold” instead! 5. Your loan-to-value relationship is important to a prospective lender. If you have a high profit markup and larger amounts financed, this relationship gets a lower advance rate. The size of the finance contract must amortize over a reasonable length term using an affordable subprime payment in order to be collectible. Shorter length terms are less risky than longer ones. 6. You should charge off bad debts as they become known. Delinquent receivables aren’t like fine wines; they don’t get better with age! Deferring charge-offs reduces a borrower’s ability to mitigate the loss on the defaults and makes the metrics discussed above unreliable. 7. Good financial statements (reviewed or audited for larger lines) are needed. Tax returns are not a satisfactory substitute. Lenders want to understand your accounting policies and practices so footnotes to financial statements contain important information they need to more fully understand each borrower’s financial condition and results of operations. 8. B orrowers need a profitable track record with a stable, experienced management team. Use the annual industry benchmarks published by NIADA and Subprime Analytics to determine how your performance compares with your national peers.

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For Floor Plans

1. Have equity in your business and in your inventory! Leveraging your entire inventory and all your contracts under a line of credit with a high advance rate will be perceived to be more risk than many capital providers are willing to take. 2. Have your attorney carefully review the floor plan agreements prior to signing and make sure that you understand all the requirements. Curtailment provisions are more difficult to honor when inventory holding periods become longer.

For Sales of Contracts

1. Long-term relationships with buyers will likely bring you a higher price for your contracts. These relationships are particularly important when market conditions tighten and supply exceeds demand. 2. Use your own metrics to determine if the purchase price offered is fair market value. Compare the relationship between your historical loss rates and the purchase price discount being offered to decide. 3. Don’t sell yourself out-of-business. Understand the cash flow impact caused by selling your contracts. Have a plan to replace the contracts that you sell, unless you are liquidating your business. The proceeds from a sale must be redeployed prudently. Buyers want you to maintain continuity in your business after their purchase. 4. Your contracts must be compliant. Purchasers do not want to inherit your compliance risk. Therefore, have a reputable attorney review your contracts and provide a legal opinion. Update your contract disclosures periodically based upon input from your attorney. In summary, capital is available for those who can demonstrate that they deserve it. The best time to borrow is when you don’t immediately need to use the funding. Building positive capital market relationships must be done over time and not overnight! For best results, get prepared and start prospecting well in advance of when you plan to utilize the proceeds. You can begin the process by obtaining a copy of the industry benchmarks from NIADA or from Subprime Analytics and determine how your performance compares with your peers. Good luck! Kenneth Shilson is President and Founder of NABD and Subprime Analytics which provides computerized portfolio analysis for operators and capital providers in the subprime auto finance industry. Their website is at www.subanalytics.com. NIADA and NABD will hold a buy here, pay here subprime conference in Chicago on October 7–10. For further information and to register visit www.bhphinfo.com or call 832-767-4759. 35

Meeting of the House of Delegates JW Marriott, San Antonio, TX

compiled by Texas Dealer staff

President Juan Sabillón called the meeting to order at 4:07 p.m.

Kathine Tolsch made a motion to accept. Jerry Smith seconded. Motion passed.

President Juan Sabillón called the meeting to order and introduced special legislative guests at the meeting.

Jeff Martin introduced another special guest in attendance, Ronnie Keister of the Lubbock County Tax Assessor-Collector’s Office. Mr. Keister addressed the attendees.

Special guests Texas Representative Armando “Mando” Martinez and Texas Representative Ryan Guillen both presented comments to the members in attendance. Chairman Greg Zak presented the slate of nominees for the 2020 Board of Directors. Jerry Smith made a motion to accept the slate as presented. Weyland Talafuse seconded. Motion passed. Michael Zak, on behalf of the Bylaws Committee, presented proposed four revisions and updates to the bylaws. 1. Membership Term: The term of membership shall be annual and run from January 1 to December 31 of each year. 2. Dues for all categories of membership shall be established by the Board of Directors House of Delegates. 3. Notice of any meeting of the Board of Directors shall be given prior to each meeting. 4. “ Bonding: A trust or surety bond shall be provided for all employees of the Association. The amount of such bond shall be determined by the Board of Directors and the cost paid by the Association.” (now covered by other insurance coverage).

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Erika Blankenship, on behalf of the Legislative Committee, presented proposed three revisions to the association’s Legislative Priorities. 1. TIADA supports an automobile insurance environment that creates favorable protections for automobile dealers, lienholders and customers. 2. T IADA supports the revision of named driver only insurance policies in Texas to provide fair notice to customers and lienholders of excluded drivers. (no longer necessary per HB 259) 3. TIADA supports a reasonable surety bond that is responsive to the needs of the industry and provides adequate protection. Vicki Davis made a motion to accept. Bob Blankenship seconded. Motion passed. Greg Phea moved for adjournment. Michael Zak seconded. Motion passed. Meeting adjourned at 4:56 PM. A complete copy of any reports referenced in this document and more detailed notes from the meeting are on file at the TIADA office and available upon request.

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Online Review Best Practices for Business: Dos & Don’ts by Jason Dodge

blacktruck Media + Marketing

ow often do you perform an online search to learn more about a business or product before visiting or purchasing? How often do you find yourself scrolling through reviews to see what others’ experiences have been? Have you changed your mind on a purchase or dining decision because of what others have shared online? Some business owners have caught on that positive reviews are more likely to attract customers than no reviews, or negative ones. Furthermore, reviews are a signal that can help your performance in Google’s local pack search results. Could there be a negative review of your company somewhere online that you don’t know about, that could be causing you to miss out on potential connections or sales? This should keep you up at night. You need customers to run a business. So the first DO right out of the

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gate is to have a strategy in place for monitoring and managing online reviews. This should be part of your plan for taking control of your local SEO. Before we get to more review best practices, allow us to expose a few “worst practices” that we’ve seen (you probably have, too), and that we don’t recommend you practice:

The DON’Ts

Don’t Fake Reviews. Don’t be like the small engine repair company we recently stumbled upon that attempted to balance increasingly strong negative reviews with fake 5-star write-ups, and even a review left by the owner’s wife who, amazingly, gave the business 4 stars and went on to use the platform as a Facebook-comment type of post, responding to an 39

actual customer’s negative review. We shouldn’t have to tell you that Google reviews are not an equivalent arena to Facebook disagreement threads.

Don’t Ask Friends and Family to Write Reviews. If you are a new business or have no or few reactions online, don’t attempt to “get the ball rolling” with reviews by having your employees, family, and friends write some. Not only could this violate the review policy for some third party sites, but the reviews are clearly going to be biased and based on the person’s personal affiliation with you, whether or not they actually had a great experience. If a friend or family member leaves a review of their own accord... well, that’s very sweet of them to do. But you shouldn’t encourage it. (Plus, what happens when your own wife leaves you 4 stars instead of 5? No one needs that drama in their life.)

Don’t Ignore Your Reviews. Google My Business and Facebook make it very easy to respond to reviews customers leave on your profiles. If it’s not realistic to address each one as it comes in, set aside a window of time each week to view and respond to recent reviews.

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…But Don’t Rant at Your Reviewers. So you got a negative review. Yes, it’s totally fair for you to be upset and even question the writer’s sanity because you’re clearly awesome, but get these feelings out of the way before your fingers hit the keyboard to respond. We all know the old adage, “You can catch more flies with honey than vinegar.” Don’t respond to reviews out of anger or disbelief. Believe your customer is upset, and believe your business depends, even in a very tiny way, on you handling the situation tactfully. You owe it to the customer, and to your business, to acknowledge the review, make an effort to make it right with the customer, and show other users that the brand cares enough to respond to reviews. A brand that doesn’t show it’s listening is a brand that, in the eyes of the customer, isn’t listening. Remember: Other potential patrons will see your response. In this case, you could write something like, “Thank you for sharing your experience, Janice. We value excellent customer service, and I am sorry to hear this was not what you experienced today. I would like to discuss this with you in more detail and learn more about where we went wrong and what we could do better — could you call me sometime this week? –Tammy, General Manager.” A response like this also initiates a “best practice” of taking the conversation offline to resolve any problems on a more personalized level.

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The DOs:

Do Have a Designated Review Manager. Whomever you put in charge of handling reviews is up to you, whether it’s your social media manager, your in-house SEO, or someone who oversees quality assurance matters for your business. If multiple people are handling reviews, create some standard guidelines for replies, such as a preferred brand voice or “canned” responses that can be customized for common themes or concerns.

Do Respond to Positive Reviews. Your first thought might be to monitor reviews with damage control in mind, but happy customers should be acknowledged, too. We know your employees’ time is limited, but it can do a lot for customer retention and delight when someone who has devoted their time and energy into

writing a positive review is rewarded with a personal thank you from the business. Consumers are much more inclined to let you know when they’ve had a negative experience, so it’s a big deal when someone cares enough to sing your praises in a public space. Make the most of that to

build your online reputation. If your company is reviewed frequently and gets a large number of positive ratings (what a good problem to have!), prioritize responding to the positive reviews that have the most value for your business. Obviously, you don’t need to

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respond to every 5-star review that is only a rating, without accompanying text. It’s nice they gave you high marks, but save the thanks for customers who made the effort to explain why you earned them.

Do Use Reviews to Shape Policies, Practices, and Employee Training.

Look for trends in reviews that might point to internal issues — or strengths — that are worth discussing with your team or using to revamp customer service policies and practices. Reviews can be a goldmine for gathering information on what your customers want, expect, and appreciate from your company. Paying close attention to them can pay off big-time when it comes to shaping how you do things for the benefit of your bottom line. Optimizing your patrons’ offline experience matters, because potential customers are referring to

others’ experiences before deciding whether they should spend money with you.

Do Make it Easy to Write Reviews.

Use receipts, social media, print materials, emails, etc. to direct your customers to sites where they can leave reviews. If you send emails at close of sale or as a service followup, this can be as easy as including a link to your Facebook profile, Google My Business listing, or other third party site, and a soft request like, “If you had a positive experience, please share a review on __________ to help others learn more about us.” (However, be aware that it’s against Yelp’s policies to ask for reviews on their platform.) We hope these tips help you develop an online review strategy that works for your unique business situation. If you have further questions, get in touch!

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 at the Calendar of Events, access our online membership application, find contact information for all our Local Chapters, and access many additional resources at our Knowledge Base. Texas Department of Motor Vehicles 888.368.4689 www.txdmv.gov Office of Consumer Credit Commissioner 800.538.1579 September 2019

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www.occc.state.tx.us

Texas Comptroller 800.252.1382 www.window.state.tx.us NIADA 800.682.3837 www.niada.com

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

FORMS Burrell Printing 800.252.9154 www.burrellprinting.com

Local Chapters CORPUS CHRISTI G.R. Moore The Car Shack (dates announced at www.txiada.org)

EL PASO Ricardo Gardea Cars Plus Meeting – 3rd Friday (Monthly)

FORT WORTH David Byrd Byrd Autos Meeting – 4th Thursday of Jan–May and Sep–Oct

HOUSTON Rudy Roudbari Sarco Enterprise Meeting – 2nd Tuesday (Monthly)

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

VICTORIA Dennis Schroller Victoria Autos Direct Meeting – 1st Monday (Monthly)

Please Welcome Our Newest TIADA Members DEALER MEMBERS 903 Auto Sales Melissa Shaffer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 305 N Main St, Paris, TX 75460 A&I Group LLC DBA Auto Mart of San Antonio Abel Perales . . 5317 Randolph Blvd, San Antonio, TX 78233 Affordable Auto Spot Damon Han . . . . . . . . . . . . . . . . . . . . . . 6736 Telephone Rd, Georgetown, TX 78633 Arkansas Auto Sales Andrew Laurel . . . . . . . . . . . . . . . . . . . . . . . . . . . 2314 Middlecoff, Laredo, TX 78045 Artex Auto Sales Ignacio Aubone . . . . . . . . . . . . . . . . . . . . . . . . . 1200 Basse Road, San Antonio, TX 78212 Auto Care Today Dorel Bancos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20502 Nanette Ln, Spring, TX 77388 Bam Used Cars LLC Gonzalo Del Negro . . . . . . . . . . . . . . . . . . . . . . 4332 US Hwy 380, Decatur, TX 76234 Body Centre Automotive Group Kevin Alaniz . . . . . . . . . . . . . . . . . . . . . 4723 Swann Ln, Kirby, TX 78219 Cars 4 UTX Daniel Gonzalez . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16403 FM 1325, Austin, TX 78728 Cars and Credit Master Houston Godofredo Carranza . . . . . . . 8650 Gulf Freeway, Houston, TX 77017 Cars on Demand Anton Jasser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7410 Spencer hwy, Pasadena, TX 77505 Crown Auto Andy Singh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2215 Treasure Mountain Dr., Spring, TX 77388 Customer WOW Ed Williams . . . . . . . . . . . . . . . . . . . . . . . . . . . 1419 Lake Pointe Pkwy, Sugarland, TX 77478 Dave’s Truckz David Hagler . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 768 FM 2673, Canyon Lake, TX 78133 Diamond Armor Auto Sumer Narula . . . . . . . . . . . . . . . 4519 S Panam Exp 78225, San Antonio, TX 78225 Dura Motors LLC Vanessa Hughes . . . . . . . . . . . . . . . . . . . . . . . . 8922 Frey Rd Suite A, Houston, TX 77034 EAN Holdings - San Antonio Tony Kosak . . . . . . . . . . . . . . . . . . . 11238 N IH 35, San Antonio, TX 78233 EARTH MOTORCARS LLC Brad Hansing . . . . . . . . . 3216 Kellway Drive, Suite 132, Carrollton, TX 75006 Edison Wayne LLC Stephen Wallace . . . . . . . . . . . . . 415 S. Palace Ave, Atlas Automotive, Tyler, TX 75702 EM Auto Corporation Dora Rodriguez . . . . . . . . . . . . . . . . . . .106 Spencer Hwy, South Houston, TX 77587 Fusion Motor Sales Wilmory Medrano . . . . . . . . . . . . . 7016 Greenview Circle North, Fort Worth, TX 76120 Gigante Auto Group LLC Pablo Cordova . . . . . . . . . . . . . . . . . . . . . . 707 Fort Worth Ave, Dallas, TX 75208 Gol Auto Group Rod Pavei . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P.O.Box 82322, Austin, TX 78708 Grupo Aztecar Branch Jose Rodriguez . . . . . . . . . . . . . . 2215 Harry Wurzbach Rd, San Antonio, TX 78209 Hill County Auto Sales LLC Ronnie Falkner . . . . . . . . . . . . . . . . . . . . . 607 West Elm, Hillsboro, TX 76645 Horseshoe Automotive Lee Akins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 413 East 3rd Street, Tyler, TX 75701 Houston Town Auto Sales Angel Delgado . . . . . . . . . . . . . . . . . . . . 11413 Eastex Fwy, Houston, TX 77043 JaysKars Jason Herrera . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1900 S. Texas Ave., Bryan, TX 77802 Kraft Ventures Pam Kraft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PO Box 311807, New Braunfels, TX 78131 L & N Auto Sales, LLC Neil Bufkin . . . . . . . . . . . . . . . . . . . . . . . . . . 1020 S. Wall Street, Belton, TX 76513 Lightning Motorsports Heather Moreno . . . . . . . . . . . . . 1100 W. Pioneer Pkwy, Grand Prairie, TX 75051 Mikes Auto Sales Mike Yearwood . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P.O. Box 6662, Paris, TX 75461 My Car Store Jason Ripple . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3812 NE 28th Street, Haltom City, TX 76111 Ocean’s Auto Sales Herminia Herrera . . . . . . . . . . . . . . . . . . . . . . . . . 516 Centennial Dr, El Paso, TX 79912 Pigg Enterprises Inc J Robert Pigg . . . . . . . . . . . . . . . . . . . . . . . 1183 S Memorial Dr, Prattville, AL 36067 R & D Motors Inc Robert Dunbar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200 E. 53rd St., Austin, TX 78751 Same Price Cars, LLC Luis Vargas . . . . . . . . . . . . . . . . . . . . . . . . 1766 Austin Hwy, San Antonio, TX 78218 Shelley’s Auto Sales LLC Leslie Shelley . . . . . . . . . . . . . . . . . . . . . . . . . . . . 727 S. Main, Belton, TX 76513 Sundance Auto Sales, LLC Peter Stephens . . . . . . . . . . . . . 15001 E Beltwood Pkwy, Addison, TX 75001 Titan Motors Lehmer Dunn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4518 South Georgia, Amarillo, TX 79110 White Gold Autos Sales Ramon Castro . . . . . . . . . . . . . . . . . . . . . . . 7018 Rampart St, Houston, TX 77081

ASSOCIATE MEMBERS Auto Services Company Inc Michael Skinner . . . . . . . . . . 1793 Hwy 201 N, Mountain Home, AR 72653 Big Time Advertising & Marketing Brad White . . . 732 Crown Industrial Ct., Suite N, Chesterfield, MO 63005 EasyPay Finance Chris Evans . . . . . . . . . . . . . . . . . . . . . . . 854 Richmond Circle, Peachtree City, GA 30269 Elite Warranty Tommy Wright . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2036 E US HWY 84, Palestine, TX 75801 EO Taylor Enterprise Efran Taylor . . . . . . . . . . . . . . . . . . . . 1600 Springwoods Plaza Dr., Spring, TX 77389 IAA Laura Marchiafava . . . . . . . . . . . . . . Two Westbrook Corporate Center, Suite 500, Westchester, IL 60154 Peak Performance Team Mike Burgholzer . . . . . . . . . . . . . . . . . . . . . . 6600 Rice Road, Victor, NY 14564 RunBuggy Nicole Dickstein . . . . . . . . . . . . . . . . . 3300 N. Scottsdale Road, Unit 2001, Scottsdale, AZ 85251 The Pritchard Law Firm David Pritchard . . . . . . . . . . 1244 Southridge Court, Suite 102, Hurst, TX 76053 Weave Gentry Thomson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2000 W. Ashton Blvd., Suite 100, Lehi, UT 84043 Wheel’s Automotive Dealer Supplies Inc. Renee Perri . . . . . . 1711 Maryland Ave., Niagara Falls, NY 14305 T e x a s

D e a l e r

September 2019

behind the wheel

by Jeff

Martin

A Few Pictures Worth 1,000 Words

TIADA EXECUTIVE DIRECTOR

s you know, we are constantly talking about growing our influence by reaching out to local politicians, state legislators and agency policymakers to continue to build strong relationships. It’s been a hallmark of the association’s grassroots legislative efforts and it was on full display at this year’s conference. Thanks to our members who attended and showed what a professional industry we are and strive to be. I hope you had a chance to visit with a few of the following: Senators; Carol Alvarado, Bryan Hughes, Jose Menendez and Beverly Powell. State Representatives: Ryan Guillen, Armando Martinez and Ed Thompson. Tax Assessor Collectors; Wendy Burgess, Cathy Talcott and Ronnie Keister, Texas Finance Commission Vice Chair Phillip Holt and OCCC Commissioner Leslie Pettijohn.

T e x a s

D e a l e r

September 2019

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

PRSRT STD

U.S. POSTAGE

PA I D

JEFFERSON CITY, MO

PERMIT NO. 210

FEEL THAT TEXAS PRIDE IN AND OUT OF THE LANES Your Manheim partners in Texas are going big to bring you more cars. Let us show you the selection of inventory inside our lanes plus dealer lot inventory outside our lanes. It’s all designed to meet you right where you are -Texas.

MARKETPLACE | ASSURANCE | RECONDITIONING | FLOOR PLANNING LOGISTICS | INVENTORY MANAGEMENT

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