Texas Dealer, June 2013 by Texas Independent Auto Dealers Association

ANNUAL CONFERENCE & EXPO July 28â&#x20AC;&#x201C;31, 2013

San Antonio, Texas In This Issue:

- Legislative Bulletin: The Final Countdown - New Ways to Collect Payments - Michael W. Dunagan on the Privacy Notice - Regulation Matters: The Dealer Agent Rule

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2013 TIADA Board of Directors President Byron Riley/Uncle Buddy’s PreOwned Autos, LTD. 409 North Loop West Houston, TX 77008 Office: 713.869.3405 Email: byron@unclebuddyauto.com Chairman of the Board Scott Allen/Auto Land 5925 E. Belknap Haltom City, TX 76117 Office: 817.834.4222 Email: scotta@goodwheelsgooddeals.com President Elect Michael Thomasson/Mike Carlson Motor Company 264 Exchange St. Burleson, TX 76028 Office: 817.366.9578 Email: mthomasson@mcmcauto.com Secretary Brent Rhodes/Fiesta Motors 5150 Industrial Way Drive Buda, TX 78610 Office: 512.312.2201 Email: brent@fiestamotors.net Treasurer HL Hensley/Automax of Lubbock P.O. Box 5627 Lubbock, TX 79452 Office: 806.744.3533 Email: hl@gospac.com Vice President, West Texas (Region 1) James Hobson/H-Town Motors 3714 Dyer Street El Paso TX 79930 Office: 915.564.9797 Email: htownmotors@sbcglobal.net Vice President, Fort Worth (Region 2) Ahmed Belmeshkan/New Rio Grande Motors 2000 NE 28th Street Fort Worth, TX 76106 Office: 817.740.0801 Email: newriogrande@yahoo.com Vice President, Dallas (Region 3) Kathrine Tolsch/CICO Auto Sales 11050 Harry Hines Blvd. Dallas, TX 75229 Office: 214.352.9282 Email: ktolsch@verizon.net Vice President, Houston (Region 4) Ryan Winkelmann/BJ’s Autohaus 5005 Telephone Road Houston, TX 77087 Office: 713.641.0980 Email: ryan.winkelmann@sbcglobal.net Vice President, Central Texas (Region 5) Sonny Paredez/Discount Auto Center 7203 NW Loop 410 San Antonio, TX 78245 Office: 210.680.5600 Email: sonnyparedez@yahoo.com Vice President, South Texas (Region 6) Trey Crouch/Trey Crouch’s Wheels On Credit 636 E. Business 83 McAllen TX 78501 Office: 956.972.0700 Email: trey@wheelsoncredit.com Vice President At Large Greg Zak/Dixon Motors 7902 North Freeway Houston, TX 77037 Office: 281.931.1300 Email: gzak@windstream.net Vice President At Large Tommy Gregory/Abilene Used Cars Sales Inc. 497 E.S. 11th Abilene, TX 79602 Office: 325.676.8000 Email: aucsinc@sbcglobal.net TIADA Executive Director Jeff Martin PO Box 127/Round Rock 78680 Office Hours M-F 8:30am - 4:30pm 800.442.5944 • Fax 512.244.6218 jeff.martin@txiada.com

Volume XIII

Issue 6

J u n e 2 013

texasDealer

5 Officers’ Message

contents

by Scott Allen, TIADA Chairman of the Board

8 My Favorite Topic

by D. J. Harrington, The “CAR-Diologist”

9 Board of Directors Meeting Minutes 10 Upcoming Events 10 2013 Auto Auction Directory & Resource Guide 11 Local Chapters 13 New Members 14 Legislative Bulletin: The Final Countdown by Jeff Martin

16 New Ways to Collect for Buy-Here, Pay-Here by Jim Stickford

21 Regulation Matters: The Dealer Agent Rule... and More by Danny Langfield

23 On The Cover: Education, Networking and Family Fun by Robert Hernandez

33 Fines & Violations 41 Legal Corner: Privacy Notice Requirements for Independent Dealers by Michael W. Dunagan

46 Behind the Wheel by Jeff Martin

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

Did You Know... you can now register for the 2013 Annual Conference & Expo? Select the Annual Conference & Expo link and you’ll be taken to TiadaAnnualConference.com, where you can see the Schedule of Events, check out keynote presenters and get registered at the low early bird rates. The Editor of the Texas Dealer magazine is Danny Langfield, Deputy Executive Director of TIADA. To change your address for subscription and/or for other TIADA products, call the TIADA state office at 800.442.5944, 512.244.6060 or fax 512.244.6218. E-mail: info@txiada.com. New Membership/Subscriptions: If you are a member of TIADA, you may receive this magazine free of charge. Membership year runs from Jan 1 to Dec 31. Back issues are available for $20 each subject to availability. Send a check or money order, along with your name and mailing address to TEXAS DEALER, Attn: Back Issues, P.O. Box 127, Round Rock, TX 78680-0127. Sorry, no billing. Notice to all members concerning services and products: TIADA was established in 1944 to develop professional standards of service and conduct for the independent auto industry. Opinions expressed herein are not necessarily those of the TIADA management, the Board of Directors or the membership. Likewise, the appearance of advertisers or their indemnifications of TIADA does not constitute endorsement of the products or services featured.

officers’ message We’re Here and We Hear You!

ell, my time serving on the executive committee and as a member of your Board of Directors is coming to an end. I must say that I will never forget the great times and accomplishments that have been made while I was a part of your executive committee for the past seven years. When I came on to the board in 2007 there was a definite buzz about the future of TIADA and its members. We made a conscious decision to make this organization and our annual conference the very best it could be. Last year we ended the year with 1170 members of TIADA. At last year’s conference we had 191 registered dealers in attendance and 127 dealerships represented. That is an increase in membership by 36%, an increase in dealerships represented by 154%, and a 213% increase in dealer attendance at the conference over the past five years. There are several contributing factors to this growth but the one underlying factor in all this success and influence came from you, the members. You told us what mattered to you most and your TIADA staff and your executive committee formulated a plan to get it done. That’s how we roll!!! Advocacy: where the TIADA rubber meets the road! Last year at the conference you told us your lien is paramount; don’t let anything jeopardize this… try to

by Scott

Allen

Auto Land (Haltom City) TIADA chairman of the board

do something about insurance policies that don’t protect our interests… and see if you can do something about curbstoners in my town. This year we had our most successful Legislative Day at the Capitol thus far. We had 36 dealers there in Austin, and that was a major increase from our last Legislative Day in 2011. As I was roaming the halls of our state capitol this year visiting the legislators on my list, I kept bumping into other groups of dealers seemingly as I turned down each hall way. For those of you who attended… a sincere “thank you.” Your efforts are still paying dividends. Last month, your executive committee met in Austin as we usually do, but this time we got there early. You see, those topics that you discussed with your legislators on Legislative Day… we now had actual bills to discuss with those legislators that day, so we hit the Capitol and followed up, reconnecting with legislators and their staff. We’re here and we hear you! Last month the Officers’ Message by Michael Thomasson (your President Elect) outlined one of those fears about the security of your lien being compromised by HB3071. HB1773 attempts to address named driver only insurance policies and exclusions. HB3026 would allow for a temporary resident permit to obtain insurance, keeping intact and/or expanding (cont’d on next pg.)

You told us what mattered to you most and your TIADA staff and your Executive Committee formulated a plan to get it done. That’s how we roll! June 2013

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your customer base. HB2690 attempts to get some teeth in enforcing actions against curbstoners. Last, HB2947 proposes eliminating the VTR-136 Form (County of Issuance of Title) from your deal jacket permanently! We’re here and we hear you! It all starts with what YOU think we need to do! First, attend the conference for ALL it has to offer, but as the classes are winding down on Tuesday and you start thinking about looking down to see what comes next on the back of your “black badge” schedule… no need to because you read this little article. It’s the “Legislative Caucus”… where YOU ALL collectively tell the staff and Directors what you think we should focus our efforts on in the next legislative session. The process begins immediately afterwards… identifying key persons, groups, and agencies… forming allies and making plans to tackle potential roadblocks. With the dedicated staff and the grassroots efforts of regular dealers just like you we are learning what it takes to turn the slow wheels in Austin.

This year may prove to be the best Conference ever! The event will be held July 28–31st in San Antonio, Texas at the Hyatt Regency Hill Country Resort & Spa. The event is packed with a great line-up of two nationally known keynote presenters, dealer and industry panels, breakout sessions and our dealer roundtable discussions, all of which make up the core of this conference — education. Topics will include: compliance, marketing, management, collections, sales, financing, advertising and everything in between (see pg. 30). That being said, you should bring the entire family… while you are getting sharp, your family members can grab a tube and enjoy a float around the Hyatt’s 950 foot Lazy River, or get in on the adrenaline action with the brand-new attractions debuting this year, including a 22 foot Tower Slide and the incredible Flow Rider Wave Machine, the first of its kind in Texas. I will be THERE in San Antonio and I hope to HEAR from you!

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June 2013

feature

My Favorite Topic

by D. J. Harrington The “CAR-Diologist”

{Editor’s Note: The Doctor is IN. As noted below, the CAR-Diologist will be a featured presenter at the 2013 TIADA Annual Conference & Expo}

hen you see my white hair or what little hair I still do have, you’re probably thinking of D.J. Harrington, the CAR-Diologist as the “phone guy.” My favorite topic of all is “PROSPECTING.” It’s my passion. My brain is geared to finding new ways of generating more interest in what we offer the public. It’s what I do each week and have done for years. Whether I have white hair or no hair, I will continue to create other ways to generate extra sales. If you will implement only a couple of my sales tips listed here, you will probably sell 2 or more cars or trucks a week. Wouldn’t that be worth the extra time and energy? Here are a couple of them and where to find more sales tips. I will present an entire session of tips on Marketing That Works for the upcoming conference. If you can attend the class, you will leave with a workbook full of ammo, i.e., techniques and best practices that will help you on a daily basis. Never be caught without an extra arrow in your quiver to help you be prepared at a moments notice to bring home extra sales. Everyone who attends this session will get my famous, While You Were Out message sheet. It’s ammo for people who don’t return your call, those slippery customers whom you call again and again without ever reaching them because this sheet gets them to call you asking for copies of what you just sent them. Sometimes the solution is in how you say something. I will show you how to write a message like, “I spoke to God this morning, why can’t I speak to you.” It is in the way you do it! Believe me — it works! The Sock Technique is another effective technique. Yes, you will see the Sock Technique — the socks I send out that say, “We will knock your socks off!” Only one sock is mailed to the customer. You will not believe how many people show up at the store to get the matching sock. We’ll discuss that technique and how best to implement it during my session at the conference. Some other techniques are through emailed notes. I have numerous email notes to send to neighbors of used car buyers written by the car that was just purchased. The neighbors will call to mention that they

received a note from their neighbor’s newly purchased car and how cute it was to receive it. This technique brings attention to the fact that the neighbor just bought a car and they need to consider doing the same. It creates interest and excitement. We need to put FUN back into our business. I enjoy selling cars and trucks. I’m proud to be in the business. So should you! So please consider attending the conference in July. The conference is scheduled for July 28–31. Bring your family; let them enjoy the luxury of the Hyatt Hill Country Resort & Spa. You go to a few events like hearing Ingram Walters, a very successful dealer from the Carolinas, “He tells it like it is.” No holds barred. You’ll love him. I am not a CPA, you know. Clip, paste and adjust! However, I do know a lot of dealers that consistently attend state conventions that are not half as valuable as yours in the great state of Texas. Those dealers write off a good portion of these trips because these types of expenses are considered an educational expense. Such expenses can be deducted because they’re expenses incurred by a self-employed individual that are reported on Form 1040, Schedule C, Form 1040 Schedule C F2 or Form 1040 Schedule F. Don’t take my word for it. Consult your accountant for the appropriate form for your business but let your accountant know you got that information from “the Car-Diologist.” You won’t be the only business owner submitting educational expenses on their tax forms next year. They are the proactive dealers who want to spend time and money to attend educational meetings that will improve their bottom line. They take time to learn and better themselves and their business. So make plans to attend and discover what they’re learning and go back to implement what they’ve implemented in their businesses too. See you at the conference in July. Bring your family, pack your clubs and especially bring your better half to enjoy the spa. Come with an open mind to be inspired to grow your business this year with confidence. Become the successful dealer that God has always wanted you to be. All you need to do is FOLLOW. T e x a s

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June 2013

board of directors meeting minutes April 22, 2013 | DoubleTree Hotel, Austin, TX

compiled by Texas Dealer staff

At its meeting on Monday, April 22, 2013, TIADA heard reports and took the following actions:

Old Business

Minutes Of Last Meeting

New Business

Secretary Brent Rhodes presented the minutes of the last Board of Directors meeting. A motion was made to accept the minutes. Moved by Scott Allen, seconded by HL Hensley – Passed

Treasurer’s Report

Treasurer HL Hensley presented the Treasurer’s report. A motion was made to accept the Treasurer’s report. Moved by Kathrine Tolsch, seconded by Greg Zak – Passed Byron Riley presented the president’s report. Jeff Martin presented the Executive Director’s report. Danny Langfield presented the Annual Conference & Expo update. Scott Allen distributed Special Membership tickets to kick off the Special Membership campaign. Byron Riley reviewed the new member phone calls conducted by the Board. Michael Thomasson presented an update from the adhoc Facility Search committee. HL Hensley presented the current budget for FY13. A motion was made to accept the budget. Moved by Michael Thomasson, seconded by Greg Zak – Passed HL Hensley presented the draft budget for FY14.

None.

Byron Riley asked the Board of Directors to consider the structure of standing committees. The Board of Directors asked staff to have the Bylaws Committee look at removing some standing committees. Bylaws Committee will study proposed changes and make recommendations. A motion was made for the association to grant signature authority to the executive director and president for the purpose of executing a contract and loan documents applicable to the purchase of a professional office building. Moved by Ryan Winkelmann, seconded by Kathrine Tolsch – Passed A motion was made to direct the association to purchase a professional office suite located at 9951 Anderson Mill Road; Austin, Texas. Moved by James Hobson, seconded by Sonny Paredez – Passed Byron Riley directed staff to expand the charge of the ad-hoc Facility Search committee to include considerations relating to the sale of the existing office building located at 595 Round Rock West Drive, Suite 605; Round Rock, Texas. A motion was made to adjourn the meeting. Moved by Ryan Winkelmann, seconded by Scott Allen – Passed Meeting adjourned at 6:21p.m. Respectfully submitted, Brent Rhodes, Secretary

Jeff Martin presented a legislative update.

Executive Session

The board recessed to executive session from 4:50p.m. – 5:52p.m. No actions were taken from executive session. June 2013

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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.

Upcoming Events TIADA Dealer Academy June 2013 17 Dealer 101: Nobody Told Me That! DoubleTree Dallas Market Center 2015 Market Center Blvd. Dallas, TX 75207 214.741.7481 Online registration available at www.txiada.com

Other TIADA Events July 2013 28-31 TIADA Annual

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

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

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

2 013 tiada a u t o a u c t i o n ABILENE CM Company Auctions 2258 S. Treadaway / 79602 325.677.3555 / 866.310.3555 www.cmauctions.com Gregory Chittum, Owner Thursday: 10:00 AM

AUSTIN America’s Auto Auction Austin / San Antonio 16611 S. IH-35 / Buda / 78610 512.268.6600 www.americasautoauction.com John Swofford, General Manager Tuesday: 1:30 PM

BEAUMONT Beaumont Dealers Auction, Inc. 12151 Highway 90 / 77713 409.866.5677 www.beaumontdealers.com Laura Miller-Sattler, Owner Tuesday: 7 PM Gulf Coast Auto Auction 4450 South 11th Street / 77701 409.840.6000 www.gulfcoastautoauction.com Roger Rashall, General Manager Rocky Rashall Blake Rashall Thursday: 7 PM

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

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

DALLAS / FT. WORTH METROPLEX ADESA Dallas 3501 N. Lancaster-Hutchins Rd / Hutchins / 75141 972.225.6000 Ken Osborn, GM Wednesday: 3 PM - New Car Trade Thursday: 9:30 AM - Consignment/Fleet/Lease America’s Auto Auction - Dallas 219 N. Loop 12 / Irving / 75061 / 972.445.1044 www.americasautoauction.com Robert Hammonds, GM Ruben Figueroa, Assistant GM. Tuesday: 2 PM / Thursday: 2 PM

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

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

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

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

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June 2013

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

ROCKWALL Lakeside Auto Auction 1810 East I-30 / 75087 972.771.9919 www.lakesideaa.com Pete Conley, Owner Tuesday: 7:00 PM

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

WACO Heart of Texas Auto Auction (Waco’s oldest auto auction- Proudly serving dealers for 20 years!) 2508 HWY 6 / 76705 / 254.755.7713 www.heartoftexasautoauction.com Allan Wichkoski, Owner Kenny Reigert, General Manager Shirley McMillan, Office Manager Thursday: 7 PM Alliance Auto Auction 15735 N. IH-35 (exit 346) / 76715 254.829.0123 / 254.829.1298 (fax) www.allianceautoauction.com Darren Darnell, GM darren.darnell@allianceautoauction.com Carmen Klaus, Office Manager Every Friday: 10 AM

oKLAHOMA CITY, OK Dealers Auto Auction of OKC 1028 S. Portland / Oklahoma City, OK / 73108 405.947.2886 /405.943.8370 (fax) www.daaokc.com Gary Smith, Owner/President/GM John Reininger, Asst. GM Mike Egdahl, F/L Manager Thursdays: 8:30 AM - Consignment Sale INOP Sale held weekly GSA sale held monthly (open to public) Call for info on sale dates and times Every other Tuesday: 10:00 AM - GM Sponsored Factory Sale June 2013

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The TIADA Website:

www.txiada.com Members can log in with their username/password and access our Dealer Member Directory, Legislative Action Center, Legal Consultation Service and much more. Register for all upcoming TIADA events online at the Calendar of Events; access our online membership application; find contact information for all our Local Chapters, and find many additional resources at our Links page. Texas Department of Motor Vehicles 888.368.4689 www.txdmv.gov Office of Consumer Credit Commissioner 800.538.1579 www.occc.state.tx.us Texas Comptroller 800.252.1382 www.window.state.tx.us NIADA 800.682.3837 www.niada.com

Repossessions

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

Forms

Burrell Printing 800.252.9154 www.burrellprinting.com

Local Chapters Victoria Alan Wilkinson • AW Motors 361.570.2400 alan@awmotors.com Meeting - 1st Monday (Monthly) Fort Worth Jerry Smith HJ Smith Automobiles 817.282.0102 hjsmithauto@yahoo.com Meeting - 4th Thursday (Monthly) Dallas County Kathrine Tolsch • CICO Auto Sales 214.352.9282 ktolsch@verizon.net Meetings every other month Houston Greg Zak • Dixon Motors 281.931.1300 houstoniada@gmail.com Meeting - 2nd Monday (Monthly) Waco-Heart of Texas Bill Miller • Bill Miller Used Cars 254.753.4161 bmillercars@hot.rr.com Meeting - 2nd Monday (Monthly) For more information contact Eddie Massey, Massey Motors 254.753.6661 San Antonio Sonny Paredez • Discount Auto Center 210.680.5600 sonnyparedez@yahoo.com Meetings quarterly (dates announced at www.txiada.com) El Paso James Hobson • H -Town Motors 915.564.9797 htownmotors@aol.com Meeting - 3rd Friday (Monthly) Austin Brent Rhodes • Fiesta Motors 512.312.2201 brent@fiestamotors.net Meetings quarterly Beaumont Laura Miller-Sattler Sattler Automotive Group 409.866.2987 lsattler@sattlerautomotive.com Meetings quarterly 11

Please Welcome Our Newest TIADA Members Dallas Auto Sports Keith Stuckey 12150 Shiloh Rd. #112 Dallas, TX 75228

Lewisville Car Sam Sadeshpour 535 E. Hwy 121 Lewisville, TX 75057

Super Imports, Inc Rapinder Singh 1028 W. Division St Arlington, TX 76012

Dides Trading Inc. Sam Dides 9400 N. MacArthur #614 Irving, TX 75063

Magic Motors Maria De La Garza 4226 W. Davis, Suite 35 Dallas, TX 75211

Tbd Charles Worrel 110 Oakhurst Pl San Antonio, TX 78209

Dynamic Imports Masoud Shaygan P.O. Box 793923 Dallas, TX 75379

Martinez Auto Sales Oscar Martinez 1212 N Texas Ave Bryan, TX 77803

Texas National Auto Sales Inc Asghar Salehi 3834 Fredricksburg Rd San Antonio, TX 78201

Eagle Truck & Auto Martin Marquez PO Box 1113 Kennedale, TX 76060

Martinez Auto Sales Cesar Martinez 1114 N 77 SSS Harlingen, TX 78550

Texas Pre-Owned Auto Group Mahmood Akhtar 415 N. Greenville Ave. Dallas, TX 75081

El Padrino Auto Sales Miguel Chi 2402 Culebra Rd San Antonio, TX 78228

Mi Patria Auto Sales, Inc. Vicente Estrada 5306 Airline Drive Houston, TX 77022

Texas Velez Auto Sales LLC Francisco Velez 2005 NE 28th St Ft. Worth, TX 76106

Exotic Motors Illya Zavizion 11100 Elizabeth Ave. Frisco, TX 75035

Motor Power Co. Glenn Ostberg 327 S. Business I-35 New Braunfels, TX 78130

The King Motor Co. Gerardo Rodriguez P.O. Box 744 Arlington, TX 76004

EZ Drive Auto Charlie Francis 1100 S. McDonald St McKinney, TX 75069

Mr. Auto-Max Leif Chan 1316 Austin St San Antonio, TX 78208

Tovi’s Auto Sales Temer Tovi 2271 Tawny Owl Rd. Grand Prairie, TX 75052

EZ ED BIZ Ed Kent 3269 North Freeway Ft. Worth, TX 76106

NAS Financial Services Basil Obaid 2713 Mansfield Hwy. Fort Worth, TX 76119

First Choice Auto Center Jeff Salehi 5718 Babcock Road San Antonio, TX 78240

National Auto Remarketing Nick Fallahzadeh 302 E. Highway 121 Lewisville, TX 75057

First Wheels, LLC Charles Bates 1511 Windsong Way Galveston, TX 77554

Nora Motor Company Maher Malkawi P.O. Box 543011 Grand Prairie, TX 75054

Garfias & Sons Auto Sales Luis Garfias 3801 South Freeway Fort Worth, TX 76110

Plains Choice Auto Group, LLC Ryan Herring 4301 Avenue Q Lubbock, TX 79412

Gerald’s Auto Sales, Inc. Gerald Maldonado 208 NW 28th Street Fort Worth, TX 76106

Platinum Autoplex Ray Zayed 217 W Veterans Memorial Hwy Killeen, TX 76541

Global Vehicles Inc Muhammad Zaheer 305 NW 24th Street Grand Prairie, TX 75050

Prince Auto Sales Diamond Yirani 105 Hensley Dr. Grand Prairie, TX 75050

Inter Motors Alan Onguner PO Box 19621 Houston, TX 77224

R.A.S. Auto Group Yousef Obaid 725 S. Cherry Lane Fort Worth, TX 76108

InterGroup Brokers Tim Jost 34 Mustang Ct. Forney, TX 75126

Reliable Cars & Trucks Hassan Rizi 7213 Airline Houston, TX 77076

Finance Express LLC Tara Bauman 30071 Tomas, Suite 250 Rancho Santa Margarita, CA 92688

J P Motors, LLC Juan Moreno 1305 W Hwy 83 Pharr, TX 78577

Select Auto & Marine Group of Texas LLC Ken Welling 2501 S Loop 35 Ste B Alvin, TX 77511

National Auto Lenders, Inc Ozzie Ramos 14645 NW 77 Avenue Ste 203 Miami Lakes, FL 33014

Carrrs Sam Musia 796 Winding Oaks Dr Waco, TX 76705

J U M Auto Sales Segundo Ruiz 2727 E. Lancaster Ave. Ft. Worth, TX 76103

South Texas Auto Brokers Joel McDaniel 217 Second Street Pleasanton, TX 78064

Skypatrol Mark Peters 3055 NW 84th Ave Doral, FL 33122

CCC Sales Inc. Windel Carter 209 Tanner Creek Circle Sunnyvale, TX 75182

Java Enterprises Abdel Obaid 2713 Mansfield Hwy Fort Worth, TX 76119

Special Touch II Auto Sales Edward Andrews 8259 Camp Bowie West Fort Worth, TX 76116

Tax Refund Services Tax Max Chip Wiley 7815 Temple Terrace Hwy Tampa, FL 33637

Champion’s Auto Sales Co. LC Martin Aguayo 1820 Jacksboro Hwy. Fort Worth, TX 76114

JRB Motors 2 Bradley Baker PO Box 5392 Arlington, TX 76005

Spotless Auto LLC Hareth Al-Shalchi PO Box 40024 San Antonio, TX 78229

vAuto Barbara Reitz 2221 Camden Court, Suite 210 Oak Brook, IL 60523

Comanche Cars Jose Hoffman 5014 Rigsby Ave San Antonio, TX 78222

KM Auto Sales Ken McGough P.O. Box 1666 Medina, TX 78055

STC Auto Sale Rashad Eid 519 W. Division St Arlington, TX 76011

NCM Associates Gene Daughtry 10551 Barkley St, Suite 200 Overland Park, KS 66212

New Dealer Members Diabco Auto Sales Mohammad Diab 1777 E. Balm Canyon Palm Springs, CA 92264 A & Davco Enterprises LLC David Ndikumana 1235 Cavender Hurst, TX 75053 Abram Trading Corporation Said Abu-Anbar 1324 East Abram Arlington, TX 76010 Ace Car Sales Peter Shim 2625 Royal Ln. Dallas, TX 75229 Alice Autoplex, Inc. Robert Galindo P.O. Box 4178 Alice, TX 78333 All Star Auto Mikhail “Mike” Murashkovsky 1100 Summit Ave, Ste 109 Plano, TX 75074 APNA Auto Sales Jehangir Ali 2603 Southwell Rd, Suite 104 Dallas, TX 75229 Arbil Motors Inc. Ismail Abdulhakim 1315 E. Abram Street, Suite 102 Arlington, TX 76010 Auto Limits Sami Noubani 1400 N. Beltline Rd., Suite 100 Irving, TX 75061 Auto Mall 59 Mansour Morakabi 1217 Saint Regis Dr. Irving, TX 75038 Auto Sales of Texas Brent Rhodes 409 E. Ben White Blvd. Austin, TX 78704 Auto SATX Matthew Ranjbar 5630 San Pedro San Antonio, TX 78212 Brazos Direct Auto Sales Chris Cash P.O. Box 7215 Bryan, TX 77805 Budget Motor Company Hamdy Aboellhasan 1718 Eden Avenue Haltom City, TX 76117 Canelo’s Motors Eduardo Ramirez 2820 Jacksboro Hwy Ft Worth, TX 76114 Carplex Auto Group Aftab Punjwani 330 E Division St Arlington, TX 76011

June 2013

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USAT Auto Sales Inc. Shaoyi Zhang 816 S. First Street Garland, TX 75040 Vehicle Viceroy Ashraf Younes 103 S. Winston Lane San Antonio, TX 78213 Westfall Auto Sales Robert Westfall 3023 Howell Street Arlington, TX 76010 Wilkinson Pre-Owned Supercenter Nancy Wilkinson 6702 N. Navarro Victoria, TX 77904 Williamson Motor Cars, LLC Rodney Williamson 1425 Justin Rd, Suite 950 Lewisville, TX 75077 ZAKS Auto Mart Jawdat Obaid 2713 Mansfield Hwy Fort Worth, TX 76119

New Associate Members

legislative bulletin by Jeff

The Final Countdown

y the time you’re reading this legislative bulletin the final gavel will have fallen on the 83rd legislative session. However, at press time we still have a frantic seven days left and much can happen in seven days at the Texas Capitol. Here are a few things we do know: over 5800 pieces of legislation were filed this session. The TIADA legislative team sifted through each piece and identified 41 bills that would impact the independent automobile industry. A number of those bills would have had a negative impact on the industry. After working with the authors and explaining the negative consequences, it appears TIADA was able to amend or stop all of those bills. We also supported several bills that would have positive impact and improve the industry. The fate of many of those bills will be realized in the next seven days. The following is a sampling of a few bills TIADA worked on this session. A complete list will be available in the September issue of the Texas Dealer.

Martin

tiada executive director

HB 2690 Elkins

This bill would give law enforcement effective new tools to fight curbstoning.

TIADA’s Position: For TIADA’s Action: The association worked closely

with the author of this bill and the Department of Motor Vehicles to develop the language. It passed out of the House Transportation committee on April 16 after Byron Riley (Uncle Buddy’s PreOwned Autos – Houston) testified in favor of the bill. Additionally, numerous dealers came to the hearing in person to sign cards in favor. This bill generated over 100 phone calls and emails from dealers to their legislators. At press time the bill had passed the House, was out of the Senate Transportation committee and was set to be heard on the Senate floor.

(cont’d on pg. 45)

HB 1773 Thompson & SB 1567 Davis

Both of these bills attempt to address the issues surrounding named-driver only limited policies.

TIADA’s Position: For TIADA’s Action: Brent Rhodes (Fiesta Motors

– Buda) and Robert Beck (Stop and Drive – San Antonio) testified in favor of these bills to help get them out of their respective committees. Dealer members made over 70 phone calls and 90 emails to help get each bill out of its respective chamber. The fate of both of these bills will be determined in the final days of the session. 14

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feature New Ways to Collect for Buy-Here, Pay-Here by Jim Stickford Freelance Writer

would read the appropriate coding numbers at the bott wasn’t that long ago that buy-here, pay-here dealers tom of a check over the telephone to someone in the had two ways to collect payments from customers. It dealer’s office. In 2002, the debit card became the most was either cash or a check. prominent form of payment.” But as technology has But even today there are changed and we have smart people who don’t have checking phones and iPads, the ways accounts, Perlmutter said. She people can pay dealers has said that’s not uncommon in changed. And experts say that Hispanic neighborhoods. But, it’s a good idea for dealers to as she noted, the pre-paid debit adopt new payment methods. card has become popular. Susan Perlmutter, chief rev“The debit card allows the enue officer of Sigma Payment unbanked consumer access to Processing, said her biggest Susan Perlmutter, virtual banks, ” Perlmutter said. customer niche is the used-car Chief Revenue Officer, Sigma Payment Processing “Now there are sometimes fees industry. associated with cards and sometimes not, depending on “In the year 2000 the most sophisticated way people the plan picked by dealers. But 20 or 30 years ago, the uncould pay a buy-here, pay-here dealer was a check over banked might have had to go to a check cashing store and the telephone,” Perlmutter said. “That was when people be charged $5 to cash a check. There have always been fees.” Perlmutter said debit cards really took off in 2005. And she said she’s encountered dealers who did resist the idea of accepting cards because of the cost involved. “We tell them there are ways to absorb the cost,” Perlmutter said. “But ultimately, it’s the cost of doing business in the 21st century. In the payment industry, until recently, consumers really didn’t have a voice in opening up alternative payment channels. Now we can create programs based on the needs of the dealers and the desires of the customers. Once the customer fills out the appropriate consent forms, they can choose the method of payment, which is easier for them, and it facilitates collections for the dealer.” The new generation of buyers are used to new ways of doing business. The internet, computers and smart phones have made consumers used to being in charge, as it were, Perlmutter said. There is now an expectation that retailers will do things the way consumers want to do them. That applies to everything from buying music over the internet to how consumers pay their car dealers. The future seems to hold that consumers will be paying bills via phone texts, Perlmutter said. Once the customer signs up, the dealer sends a text to the customer saying it’s payment time. The customer texts back giving permission to the dealer to run the payment, either with the customer’s bank account or debit card. The dealer then completes the transaction.

“In 2002, the debit card became the most prominent form of payment.”

(cont’d on pg. 18) 16

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New Ways to Collect for Buy Here, Pay Here (cont’d from pg. 16)

“For customers who don’t like confrontation, this method works great,” Perlmutter said. “Often customers don’t like talking to people over the phone. This is non-confrontational and consumers don’t have to drive to the dealership either. My advice to dealers is don’t resent the fact that consumers want to open new payment channels. If you won’t do it, buyers will find another dealer who will.” Ken Shilson, founder of the National Alliance of BuyHere, Pay-Here Dealers (NABD), said that alternative payment methods aren’t just good for the consumer, they’re good for the dealer. One reason is that electronic money transfers are immediate. A dealer doesn’t have to collect a bunch of checks, bundle them up and take the checks to a bank, then wait for those checks to clear. “You have to make it as easy as possible for buyers to make payments,” Shilson said. “Right now money is tight for consumers. And if you make it possible for them to make payments without having to drive 40 miles to your store, that’s better for everyone.” Dealers also shouldn’t be afraid of the technical issues of adopting pay portals into their business procedures, Shilson said. Many good dealer management software systems now include programs that easily integrate payment portal procedures into a dealer’s sales process.

Another advantage, Shilson said, is that less cash on hand means less temptation for employees to steal. No one likes to admit it, but employee theft is real. When there’s less cash to steal, there’s less theft. And if a dealer and the customer agree to let the dealer take payments from the customer’s bank account directly, there’s often no fee. If a customer pays by credit card, often a dealer is charged a fee, so there’s that, Shilson said. He had nothing bad to say about the “Pay Near Me” program that allows customers to make payments by signing up for the program at their local 7-11 stores. But he warned dealers to make sure that they understand the legal consequences. Liability issues haven’t been clearly defined. Kenny Loveless, an associate of Joe Lescota of NIADA, said he actually spoke to a dealer who no longer takes cash. “I had him tell me that three times because I couldn’t believe my ears,” Loveless said. “The dealer told me he liked the idea of being cashless because it was safer. He was no longer a prime target for robbers. Getting rid of the cash payment counter at the dealership was almost a matter of personal safety. But they were also more efficient.” “I like to say that the business is transitioning from ‘buy-here, pay-here’ to ‘buy-here, pay-anywhere,’” Shilson said. “The future is coming and dealers shouldn’t be afraid of it. There are real benefits to changing with the times.”

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June 2013

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TIADA DeAler AcADemy 2013

Dealer 101: Nobody Told Me That! This class is designed for those dealers new to the business, those considering opening their own dealership, new employees, family members or anyone else needing a refresher on the basics. Weâ&#x20AC;&#x2122;ll cover everything you need to know to run a clean, compliant used car dealership in Texas. Topics include:

Transferring Titles Inspections, Emissions, Green Slip Garage Liability & Dealer Bond Odometers Title & Registration Fees Acquiring Inventory Temp Tags & Metal Dealer Plates Requirements for Maintaining Dealer License The Buyerâ&#x20AC;&#x2122;s Guide - As Is

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

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

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

Presenters will include:

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

Monday, June 17, 2013

Sponsored by:

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regulation matters

The Dealer Agent Rule... and More

e get the most interesting calls. In early May I got a call from a member who had just been visited by a couple of investigators from TxDMV. Long story short, our member came away with the impression that he could not accept cash on a wholesale transaction. The member called me and I admit, I was perplexed. I certainly was not aware of any prohibition on accepting cash. After looking into the matter with TxDMV, it became clear that the investigators were actually making reference to the Dealer Agent rule. And that got me to thinking that reviewing that rule in this column may not be a bad idea. The complete rule can be found in Chapter 215 of the Texas Administrative Code at §215.148. The rule reads in part, “A dealer must provide written authorization to any person buying or selling motor vehicles for resale… with which an agent, representative, or employee will be conducting business or acting on the dealer’s behalf.” It is the position of the TxDMV, based on my conversations, that any individual (employee or otherwise) who is not an owner of the business should have a written authorization on file if they are going to be buying and/ or selling vehicles wholesale for the dealership. So where does the cash prohibition come in? According to the agency’s reading of the rule, only an owner may deliver/accept cash payment in a wholesale transaction. Any non-owner (dealer agent) may not, as per §215.148(e): Only checks or drafts drawn on the purchasing dealer’s account, or cashier’s checks in the name of the dealer, or wire transfers from the dealer’s bank account shall be accepted for motor vehicles purchased in a wholesale transaction. The rule also provides that, in such transactions, title may only be reassigned and delivered to the dealer, as per §215.148(d): Titles to vehicles bought by an employee, agent or representative of a dealer shall be reassigned to the dealer by the seller or auction and shall not be delivered to the agent or representative but delivered only to the dealer, the dealer’s employee, or the dealer’s financial institution.

June 2013

T e x a s

D e a l e r

by Danny

Langfield

TIADA deputy director

According to Ray Willoughby, Managing Attorney of the Enforcement Division, the rule is in place to protect the dealership owner from unscrupulous individuals who may attempt to buy or sell vehicles for their own personal gain without the owner’s knowledge. Takeaway: when buying wholesale, be sure to confirm the individual you are dealing with is a licensed wholesaler or is an authorized dealer agent. And be sure you have a written dealer agent authorization form on file at your dealership for any non-owner involved in selling wholesale.

To Text or Not to Text

Last month I mentioned that we were looking into the rules surrounding appropriate usage of text messaging with your customer. I am glad to report that the June issue of Used Car Dealer (the NIADA monthly publication) will feature an excellent article on this topic by Shaun Peterson, Legislative/Regulatory Counsel to NIADA. I don’t want to steal Shaun’s thunder here, and there is some complexity to the matter, but the gist of the article is this: if you send a solicitation text using an automated system, you’ll need written consent prior to the text being sent. However, if you send a debt collection text, you generally do not need written consent. Like I mentioned, there is more to the texting rules than my quick summary above, so be sure to check out the NIADA article in full. Shaun will also be found at our Annual Conference this year in a session called, “Dealers vs. Consumers: And the Winner Is…” The session will feature a unique format where Shaun will engage in a debate with another lawyer from the Texas Attorney General’s office over real-life courtroom cases. Attendees will then get to make their predictions as to which side ended up winning. Lastly, the moderator will reveal the actual outcome and discuss what lessons dealers can take away for their own dealership. 21

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on the cover by Robert Hernandez

Auto Solution (San Antonio) TIADA Convention Committee Chair

The 2013 Annual Conference:

Education, Networking & Family Fun

he TIADA Annual Conference & Expo will once again be hosted here in San Antonio from July 28th to the 31st and education will continue to be at the heart of the TIADA conference. As a relatively new independent dealer in Texas since 2011, I have seen firsthand the benefits of being a member of TIADA. All it took for me to attend my first conference was an invitation by fellow dealer Sonny Paredez of Discount Auto Center San Antonio. With his simple approach and explanations of the content of the annual conference, I realized that I wanted to be part of a network of dealers that help protect the common interests in an ever-changing industry. In spite of my previous 20 years of experience managing new car stores, I have learned new and exciting things through the TIADA conference that have helped my business survive the first two years of operations. I encourage every TIADA member to do the same as Sonny did with me, please reach out to those independent dealers when you are at auctions and extend the invite to attend this year’s annual conference. I guarantee those who want to remain in business for years to come will indeed appreciate the gesture. I am certainly operating my own business now with more

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confidence and knowledge of best business practices, all because of the networking opportunities and education that TIADA offers. But back to this year’s conference. First, we have two keynote presenters that bring a wealth of experience in customer centricity. During Monday’s session, T. Scott Gross will be sharing strategies on how to sell, serve and standout in a digital world. For Tuesday’s general session, Ingram Walters will talk about his own experiences after 20 years in the BHPH industry. In addition, there will be four concurrent breakout sessions going all day Monday. A list of renowned speakers from the OCCC, the TxDMV Enforcement Division, and the Texas Comptroller, just to name a few, will be updating us on important legal compliance issues affecting our industry. Plus we’ll have many sessions on best practices ranging from getting more customers through the door to improving collections. To get the most out of the conference and plan ahead on which sessions are important for you to attend, please go to www. TiadaAnnualConference.com/ Schedule-of-Events for further details. This year we will also continue the use of the Mobile Phone App so that attendees can access the schedule of events and get detailed

information on breakout sessions, speakers and more. The TIADA conference always has a big element of fun and this year it will be held at the Hyatt Regency Hill Country Resort & Spa – an ideal location to focus on your business future while providing enjoyment for the entire family. The Hyatt amenities include world-class golf and the Hill Country Spa – both offer a 25% discount to TIADA conference registrants. The Hyatt also has a 5 acre water park including a brand-new 22-foot Tower Slide and the FlowRider Wave Machine, the first of its kind here in Texas. Both these new attractions are set to open on Memorial Day. Also, SeaWorld San Antonio is located right across the road from the Hyatt, and now features a new water park called Aquatica, which I hear is pretty awesome as well. Close to the hotel, there are other popular attractions that are enjoyed by all visitors coming to San Antonio like Six Flags Fiesta Texas, the Alamo and the River Walk, just to name a few. There are also some great shopping destinations nearby like The Shops at La Cantera and the San Marcos Outlet Mall. Hotel rates start at $159 per night for TIADA attendees and discount coupons for SeaWorld are available at the hotel concierge. I hope to see you all there! 23

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

BIGGER & BETTER EVERY YEAR …

What’s the buzz about? Come and discover why the TIADA Conference has more than tripled our dealer attendance in just five years.

Will YOU be there?

2007

2008

2009

2010

2011

2012

BREAKOUT SESSIONS Knockin’ Their Socks Off: How to Generate New Business for Your Dealership DJ Harrington, CSP - Phone Logic, Inc.

What would you do if you got a sock in the mail? How about a shoe? Nationally-recognized speaker and author DJ Harrington, one of the most entertaining figures in our business, will be opening his bag of tricks for all to see. Come to this high-energy session and have your eyes opened to a whole new world of prospecting tools, marketing techniques and outrageous ideas that will get you more customers – and more business.

The Ups Bus Broke Down: Selling in the 21st Century Jennifer Suzuki, E-DealerSolutions

Do you and your people have the ROCKIN’ sales skill set to be effective with today’s consumer? With her ultra-high energy and humor, Jennifer will show you what that skill set looks like and how to hire the people that have it. Plus: training your current staff – these sales skills CAN be learned! Discover how to arm you and your team with ROCKIN’ phone, email and social media sales skills that will help you close more deals.

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

TxDMV Enforcement Director Bill Harbeson will walk attendees through the violation process, from the initial records request to the issuance of the final order. He will also touch on the top 10 most common dealer compliance issues and what you can do to avoid them.

PANEL

DISCUSSION

Anyone Can Sell...Can You Collect? BHPH Dealer Panel

The old cliché is true: BHPH dealers ain’t in the car business, they’re in the collections business. Come hear about the successes and challenges fellow BHPH dealers face and the practices they employ as they work with their customers to minimize charge-offs and reduce delinquencies.

Deadlines Fast Approaching – Don’t Get Shut Out! Conference Registration The Earlybird gets the best rate. Register by June 28 and save nearly 20% over the Standard Registration fee. Call TIADA at 800.442.5944 or register online at www.Tiada AnnualConference.com/conferenceregistration.

Hotel Reservations Don’t miss out on the great deal we’ve got negotiated for Conference attendees - $159/night at the ever popular host resort hotel, the Hyatt Regency Hill Country Resort & Spa in San Antonio. Call 888.421.1442 or book your rooms online at www.TiadaAnnual Conference.com/hyatt-hill-country/. This rate is only available through June 28.

EDUCATION BREAKOUT SESSIONS CONTINUED…

PANEL

DISCUSSION

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

Five Acre Waterpark

Grab a tube and float the Hyatt’s Lazy River, or get in on the adrenaline action with two brand-new attractions debuting this year: a 22 foot Tower Slide and the incredible FlowRider Wave Machine.

World-Class Golf*

The Hill Country Golf Club, located on the Hyatt grounds, offers three beautiful par-36 courses.

SeaWorld San Antonio

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

Windflower: The Hill Country Spa*

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

Don’t Survive, Thrive: What the REALLY Successful Dealers Do Differently National Dealer Panel

What’s it like at the top? What are those guys doing that makes them so good? From marketing & advertising to hiring & managing, panelists from all across the country will share three specific things they do differently than most dealers to keep their businesses at the forefront of the independent auto industry.

Turning Prospects Into Customers: The Art of Lead Management Joe Webb, DealerKnows

Are you satisfied with your conversions? With your show rate from appointments? This session will focus on how to maximize the opportunities that present themselves from all types of leads. You will learn what you need to do to differentiate your dealership through your correspondence with your prospects, as well as how to improve the quality of initial engagement and follow-up. Best of all, you will learn how to manage your people to do the same.

Straight Answers From the OCCC Rudy Aguilar, Office of Consumer Credit Commissioner

Can one dealer be fined for a certain practice when another dealer is not? What kind of enforcement discretion do examiners have? All OCCC examiners in our business answer to one person: Consumer Protection Director Rudy Aguilar. Rudy will tackle the most frequently misunderstood rules for Motor Vehicle Sales Finance licensees and provide clear, direct answers to your compliance questions.

Understanding Taxability Issues in a Comptroller Audit Curt Swenson, Texas Comptroller

The past year has seen an increase in the number of independent dealers who have been audited by the Texas Comptroller. The key to a successful audit is knowing what products and services are taxable, and understanding the collection and remittance process. From general sales and use to deferred motor vehicle sales tax, discover what your dealership needs to be doing to stay on the right side of the law.

FOR YOU! Get That Target Off Your Back Structuring Your Business to Protect Your Assets Larry Oxenham, American Society for Asset Protection

NEW! This Summer at the Hyatt… FlowRider Wave Machine

The days of flying under the radar of plaintiff’s attorneys and the IRS are long since over. Lawsuit protection, tax reduction and estate planning are key to your dealership’s longevity and success. Attendees will learn how to: structure a business for lawsuit protection and prevention; reduce liability insurance costs; minimize taxes; and create a successful estate and business succession plan.

Pink is NOT a Strategy Lisa Copeland, Buying Cars Her Way

How many dealerships have tried the “Paint it Pink and She Will Come” strategy and failed miserably? This session will demonstrate how to authentically capture not only her hard earned dollars, but her loyalty and referrals. Lisa will give you tips and strategies that will make your dealership more appealing to women buyers and open doors that were previously shut.

The Carrot & the Stick: Collecting the Problem Customer

22ft. Tower Slide

Mark Dubois, Performance Incorporated

If you’re a BHPH dealer, you are all-too-familiar with the “Problem Customer.” Cut ‘em too much slack and they walk all over you, but get too aggressive and they might skip altogether. BHPH Performance 20 Groups Moderator Mark Dubois will show you how to strike a balance between compromise and consequences. PLUS - Cause and effect: Mark will demonstrate how verification in underwriting can address the problem customer issue - BEFORE it becomes a problem.

PANEL

DISCUSSION

3 Ways to Win the Insurance War BHPH Dealer Panel

Fighting the insurance battle is time-consuming and frustrating for BHPH dealers. Slow-pay, lowball offers, outright denial due to limited policies and other factors have combined to create a severely challenging insurance environment. Come hear from actual dealers about how they have deployed debt cancellation agreements, collateral protection products and standard policies to protect their customers and their vehicles.

Other session topics available at www.TiadaAnnualConference.com

Have a Blast at the Hyatt Regency Hill Country Resort & Spa!

Platinum

Thank You to Our Sponsors

Gold

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June 2013

Thank You to Our Sponsors

Silver

Bronze PLUS and Bronze n n n n n n

Alliance Inspection Management

Automotive Finance Corporation (AFC)

Berkshire Risk Services

Centrus Auto Finance Excel Finance Co.

n n

Chase Auto Finance n

Auction123.com AutoRevo

Cadence Insurance

Finance Express

Lane Gorman Trubitt PLLC n

AutoZoom

n n

DealersLink Inc.

GO Financial

ION-GPS

Mullen Insurance Agency, Inc.

Protective Asset Protection n

United Acceptance Inc.

Westlake Financial Services

Sigma Payment Processing

Tax Refund Services Tax Max

vAuto Genius Labs

CARS Protection Plus

Copart Auto Auction

Shilson, Goldberg, Cheung & Associates, LLP

Strategic Dealer Services

Floorplan Xpress LLC

PassTime

AUL Corp.

AutoZone

CARFAX

McNutt Automotive Logistics

NCM Associates

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

Lanyard: AutoStar Solutions, Inc.

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

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Schedule of Events Sunday, July 28

Monday, July 29 (cont’d)

2:00 pm – 8:00 pm Registration / Help Desk

3:00 pm – 4:00 pm (cont’d) Pink is NOT a Strategy Lisa Copeland, Buying Cars Her Way

3:30 pm – 5:30 pm Platinum Sponsor & Officers Activity (by special invitation) 8:00 pm – 10:00 pm Welcome Reception

Monday, July 29 7:00 am – 12:00 pm Registration / Help Desk 7:00 am – 8:00 am Continental Breakfast 8:00 am – 9:30 am Opening General Session – Invisible: How to Sell, Serve & Stand Out in a Digital World T. Scott Gross, Keynoter 8:30 am – 10:00 am Meet & Greet for Spouses/ Guests/Children 9:45 am – 10:45 am Here Comes the Judge: How to Handle a Notice of Hearing from TxDMV Bill Harbeson, TxDMV

Get That Target Off Your Back: Structuring Your Business to Protect Your Assets Larry Oxenham, American Society for Asset Protection 4:15 pm – 5:15 pm Understanding Taxability Issues in a Comptroller Audit Curt Swenson, Texas Comptroller 3 Ways to Win the Insurance War BHPH Dealer Panel Turning Prospects Into Customers: The Art of Lead Management Joe Webb, DealerKnows 5:15 pm – 7:00 pm Exhibit Hall (Happy Hour with Exhibitors) 7:00 pm –

Open Evening

Don’t Survive, Thrive: What the REALLY Successful Dealers Do Differently National Dealer Panel

Tuesday, July 30

The Ups Bus Broke Down: Selling in the 21st Century Jennifer Suzuki, E-DealerSolutions

7:30 am – 8:30 am Continental Breakfast

The Carrot & the Stick: Collecting the Problem Customer Mark Dubois, Performance Incorporated, an ADP Company 11:00 am – 12:00 pm Straight Answers from the OCCC Rudy Aguilar, Office of Consumer Credit Commissioner Dealers vs. Consumers: And the Winner Is… Shaun Peterson & Esther Chavez, Attorneys-at-Law Knockin’ Their Socks Off: How to Generate New Business for Your Dealership DJ Harrington, the “CAR-Diologist”, Phone Logic, Inc. The Basics of Transferring Titles Dorothy Starr with special guests 12:00 pm – 3:00 pm Exhibit Hall Grand Opening (Lunch with Exhibitors) 3:00 pm – 4:00 pm Switching From “As-Is” to a Warranty: What’s Involved Michael W. Dunagan, TIADA General Counsel

7:00 am – 10:00 am Registration / Help Desk

8:30 am – 9:30 am General Session – The Car Business: 10 Things it Took Me 20 Years to Learn Ingram Walters, Keynoter 9:45 am – 12:35 pm Dealer Roundtable Discussions 12:35 pm – 2:15 pm Exhibit Hall (Lunch with Exhibitors) 2:15 pm – 3:30 pm Legislative Caucuses 3:30 pm – 5:00 pm House of Delegates Meeting (to include Legislative Summary) 6:30 pm – 7:30 pm Awards Ceremony Reception 7:30 pm – 9:30pm

Awards Ceremony/Dinner

Wednesday, July 31 9:00 am – 10:30am Farewell Breakfast

Anyone Can Sell… Can You Collect? BHPH Dealer Panel

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June 2013

fines& violations 10-0450 ENF Clear Lake Automotive Group, Inc. DBA Ron Carter Cadillac Hummer SAAB, Ron Carter Cadillac Hummer Saab Subaru, Ron Carter Cadillac Hummer Saab Subaru Hyundai Misuse of buyers supplemental temporary E-tag. Failure to timely transfer title and pay sales tax. $4,000.00. 11-0280 ENF RV and Boat Liquidators Inc. DBA RV and Boat Liquidators Inc. Misuse of temporary dealer tag or failed to comply with recordkeeping requirements. Sold or offered to sell motor vehicles without the appropriate license for that type of motor vehicle. Failure to allow purchaser to select county for registration. $1,000.00 and attend a Dealer Training Seminar. 11-0377 ENF Ritchie Bros Auctioneers (America), Inc. DBA Ritchie Bros. Auctioneers Aided and abetted or indirectly facilitated the sale of a motor vehicle by allowing the use of GDN. $10,000.00. 11-0632 ENF Juan Antonio Torres DBA T & M Auto Repair & Service Misuse of buyer temporary E-tag. Failure to display license. Failure to allow purchaser

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

12-0395 ENF Fardin Shokri, DBA Shokri Autos Failure to notify of change of address or telephone number. Failure to meet premises requirement(s). Sold or offered to sell a motor vehicle at an unlicensed location. $500.00 and attend a Dealer Training Seminar.

to select county for registration. $1,000.00 and attend a Dealer Training Seminar. 11-1432 ENF Delbert B. McDonald DBA McDonald’s Used Cars Failure to display buyer’s guide. Failure to remove Texas plates. Filed a false title and tax document. $1,000.00 and attend a Dealer Training Seminar.

12-0479 ENF Capitol Chevrolet, Inc. DBA Capitol Chevrolet, Inc. Misuse of buyer temporary E-tag. $750.00.

12-0214 ENF The Garcia Duncan Group, Inc. DBA Duncan Motors of Pflugerville Failure to display buyer’s guide. Failure to meet premises requirement(s). Failure to maintain complete records by licensed dealer or auction. $1,000.00 and attend a Dealer Training Seminar.

12-0533 ENF Manna Motors LLC DBA Manna Motors LLC Failure to maintain complete records by licensed dealer or auction. Filed a false title and tax document. Defrauded purchaser. Failure to timely transfer title and pay sales tax. $4,500.00 and attend a Dealer Training Seminar.

12-0376 ENF Abir Nasreddine DBA Last Chance Auto Sales Failure to display buyer’s guide. $200.00.

12-0705 ENF Garadi Corporation, DBA Radiator King Misuse of buyer temporary E-tag. Failure to provide satisfactory and reasonable evidence of regularly and actively engaged in business as a motor vehicle dealer. Failure to make dealership records available for inspection. $500.00 and attend a Dealer Training Seminar.

12-0391 ENF Oracio Zamora DBA Zamora Auto Center Failure to meet premises requirement(s). Misuse of buyer temporary E-tag. Failure to maintain complete records by licensed dealer or auction. Failure to timely transfer title and pay sales tax. $1,500.00.

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June 2013

fines& violations 12-0735 ENF Eakin-Killeen LP DBA Dennis Eakin Kia Failure to comply with a Final Order. $250.00 and attend a Dealer Training Seminar. 12-0742 ENF R T Thomas Inc. DBA Flash Auto Sales Failure to comply with a Final Order. $250.00. 12-0993 ENF Falcon Motor Company DBA Falcon Motor Company Failure to display buyer’s guide. Misuse of buyer temporary E-tag. Failure to maintain complete records by licensed dealer or auction. Filed a false title and tax document. Failure to timely transfer title and pay sales tax. Failure to discharge lien. License is revoked and oppose new or renewal for three years. 12-1039 ENF Auto Station, LLC DBA Auto Station. LLC Defrauded purchaser. Filed a false title and tax document. $3,000.00. 12-1150 ENF Motoreum LLC DBA Motoreum LLC Failure to maintain complete records by licensed dealer or auction. Failure to timely transfer title and pay sales tax. $250.00. 12-1315 ENF Luxury Auto, Inc. DBA Luxury Auto, Inc. Advertised a savings on a used motor vehicle. $1,000.00. 12-1417 ENF Euro Autohaus, Inc. DBA Euro Autohaus, Inc. Failure to notify of change of address or telephone number. Sold or offered to sell a motor vehicle at an unlicensed location. Failure to timely transfer title and pay sales tax. $1,500.00 and attend a Dealer Training Seminar. 12-1458 ENF Nkele Paul Adizue, DBA N P A Auto Repair Failure to maintain complete records by licensed dealer or auction. Failure to allow purchaser to select county for registration. $500.00 and attend a Dealer Training Seminar. June 2013

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12-1463 ENF Emilio Pittman, DBA Pittman Motors Failure to maintain complete records by licensed dealer or auction. Sold a motor vehicle without certificate of title or title receipt. $500.00 and attend a Dealer Training Seminar. 12-1578 ENF Auto Forum LLC DBA Auto Forum LLC Misuse of buyer temporary E-tag. Failure to make dealership records available for inspection. Filed a false title and tax document. Failure to timely transfer title and pay sales tax. $1,500.00 and attend a Dealer Training Seminar. 12-1611 ENF Robert J. Wenske, DBA Bobs Auto Sales Failure to display buyer’s guide. $1,000.00 and attend a Dealer Training Seminar. 12-1720 ENF Gilberto Garcia DBA Triple Seven Auto Sales Failure to maintain complete records by licensed dealer or auction. Failure to timely transfer title and pay sales tax. $2,000.00 and attend a Dealer Training Seminar. 12-1788 ENF Ride Core LTD DBA Big Dog Motorcycles of Bell County, Fort Hood Harley-Davidson Misuse of buyer temporary E-tag. Failure to timely transfer title and pay sales tax. Attend a Dealer Training Seminar. 13-0036 ENF Librado Lopez DBA Lopez Auto Truck & Equipment Misuse of temporary dealer tag or failed to comply with recordkeeping requirements. Misuse of buyer temporary E-tag. Failure to timely transfer title and pay sales tax. $500.00 and attend a Dealer Training Seminar. 13-0073 ENF Holiday Motors, LLC DBA Holiday Motors, LLC Misuse of buyer temporary E-tag. Failure to timely transfer title and pay sales tax. $3,000.00 and attend a Dealer Training Seminar. 13-0074 ENF Kevin C. Adams DBA Adams Motor Group Failure to display buyer’s guide. Failure to remove Texas plates. Failure to timely transfer title and pay sales tax. $2,500.00. 35

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June 2013

fines& violations 13-0077 ENF San Antonio Auto Acquisitions, Inc. DBA San Antonio Auto Acquisitions, Inc. Sold a motor vehicle without certificate of title or title receipt. Attend a Dealer Training Seminar. 13-0084 ENF Luna Car Center LLC, DBA Luna Car Center Misuse of temporary dealer tag or failed to comply with recordkeeping requirements. Misuse of buyer temporary E-tag. Failure to maintain complete records by licensed dealer or auction. Failure to produce records within (15) days. Failure to timely transfer title and pay sales tax. Failure to allow purchaser to select county for registration. $5,750.00. 13-0095 ENF First Global Distributing, Inc. DBA Global Auto Sales Misuse of buyer temporary E-tag. Failure to maintain complete records by licensed dealer or auction. $500.00 and attend a Dealer Training Seminar. 13-0098 ENF Clayton Moose DBA Burgin Auto Sales Failure to display buyer’s guide. Failure to remove Texas plates. Sold or offered to sell motor vehicles without the appropriate license for that type of motor vehicle. $1,500.00. 13-0100 ENF Ed Payne Motors LLP Sold a motor vehicle without certificate of title or title receipt. Attend a Dealer Training Seminar. 13-0119 ENF McCombs West Ford, Inc. DBA Drive Away Motors, Gillespie Ford Misuse of temporary dealer tag or failed to comply with recordkeeping requirements. Sold a motor vehicle without certificate of title or title receipt. $500.00 and attend a Dealer Training Seminar. 13-0131 ENF Jack Eaton Motors, Inc. DBA Jack Eaton Motors Misuse of temporary dealer tag or failed to comply with recordkeeping requirements. Failure to maintain complete records by licensed dealer or auction. Failed to discharge a lien within 10 days of final payment. Failure to timely transfer title and pay sales tax. $2,000.00. June 2013

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13-0133 ENF Marc Dalmolin Motors LLP DBA Marc Dalmolin Motors LLP Failure to timely transfer title and pay sales tax. $250.00 and attend a Dealer Training Seminar. 13-0134 ENF James P. Ashley DBA A & B Auto Sales Sold a motor vehicle without certificate of title or title receipt. $250.00 and attend a Dealer Training Seminar. 13-0138 ENF Basin Subaru, LLC DBA Basin Subaru, LLC Failure to display buyer’s guide. Failure to observe right of way. $500.00 and attend a Dealer Training Seminar. 13-0140 ENF Seyara LLC DBA The Seyara Motors Co. Failure to maintain complete records by licensed dealer or auction. Failure to timely transfer title and pay sales tax. $3,000.00 and attend a Dealer Training Seminar. 13-0148 ENF Datacom Communications, LLC DBA All Star Auto Failure to display buyer’s guide. Failure to have dealer or a bona fide employee present during posted business hours. Attend a Dealer Training Seminar. 13-0172 ENF Casa Nissan, Inc., DBA Casa Nissan, Inc. Failed to advertise the price of a new motor vehicle prior to deducting the customer rebate. $500.00 and attend a Dealer Training Seminar. 13-0218 ENF Mission Automotive, LLC DBA Mission Mitsubishi Failure to timely transfer title and pay sales tax. $1,000.00. 13-0219 ENF Mission Automotive, LLC DBA Mission Mitsubishi Misuse of buyer temporary E-tag. Sold a motor vehicle without certificate of title or title receipt. $1,000.00. 13-0225 ENF Armstrong Products, Inc. DBA H&R Auto Motors Misuse of buyer temporary E-tag. Failure to timely transfer title and pay sales tax. $1,000.00 and attend a Dealer Training Seminar.

13-0228 ENF No Limit Motors, Inc., DBA No Limit Motors, Inc. Misuse of buyer temporary E-tag. Failure to make dealership records available for inspection. Failure to timely transfer title and pay sales tax. $750.00 and attend a Dealer Training Seminar. 13-0271 ENF Fermin Dimas, DBA Amarillo Auto Sales Misuse of buyer temporary E-tag. Sold or offered to sell salvage vehicles without the proper license. $250.00 and attend a Dealer Training Seminar. 13-0273 ENF Brown County Automotive Products LLC DBA Stanley Chrysler-Dodge-Jeep Brownwood Featured a price not available to all buyers. $500.00 and attend a Dealer Training Seminar. 13-0280 ENF Town East Ford II, LP, DBA Town East Ford Misuse of buyer temporary E-tag. Sold a motor vehicle without certificate of title or title receipt. $500.00. 13-0284 ENF Mr. Victors LTD. Co. DBA Mr. Victors Misuse of buyer temporary E-tag. Sold or offered to sell new motor vehicles without the appropriate license. Sold or offered to sell motor vehicles without the appropriate license for that type of motor vehicle. $1,000.00 and attend a Dealer Training Seminar. 13-0290 ENF Santiago Zuniga DBA Zuniga Motors #2 Misuse of buyer temporary E-tag. Filed a false title and tax document. Failure to allow purchaser to select county for registration. $2,500.00 and attend a Dealer Training Seminar. 13-0293 ENF Red McCombs Hyundai LTD DBA Red McCombs Drive Away Motors Represented a lowest price claim. $500.00 and attend a Dealer Training Seminar. 13-0295 ENF Paul Young Chevrolet, Inc. DBA Family Chevrolet, Paul Young Company, Paul Young Company Paul, Paul Young Daewoo, Paul Young Hyundai, Young Hyundai Defrauded purchaser. $2,000.00 and attend a Dealer Training Seminar. 37

fines& violations 13-0298 ENF An Corpus Christi T Imports LP DBA Champion Toyota Corpus Christi Failure to file application for certificate of title or deliver properly assigned evidence of ownership. $500.00 and attend a Dealer Training Seminar. 13-0333 ENF RCR Corporation DBA El Rincon Auto Sales Failure to display buyer’s guide. Filed a false title and tax document. Failure to timely transfer title and pay sales tax. $3,500.00.

13-0336 ENF Billy Alford, Jr. DBA Auto Motive Sales Failure to allow purchaser to select county for registration. $250.00 and attend a Dealer Training Seminar. 13-0340 ENF Fair Deal Auto Sales, Inc. Failure to timely transfer title and pay sales tax. $250.00 and attend a Dealer Training Seminar. 13-0341 ENF Mission Automotive, LLC DBA Mission Mitsubishi Misuse of buyer temporary E-tag. $500.00.

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13-0364 ENF HSIA T. HSIEH DBA New Dallas Auto Sales Misuse of buyer temporary E-tag. Failure to maintain complete records by licensed dealer or auction. $250.00 and attend a Dealer Training Seminar. 13-0366 ENF A-Team Auto Sales, LLC Failure to maintain complete records by licensed dealer or auction. Failure to timely transfer title and pay sales tax. Failure to allow purchaser to select county for registration. $500.00 and attend a Dealer Training Seminar. 13-0370 ENF Sonic Cadillac D LP DBA Massey Cadillac Misuse of temporary dealer tag or failed to comply with recordkeeping requirements. Failure to timely transfer title and pay sales tax. $500.00 and attend a Dealer Training Seminar. 13-0385 ENF Benson Nissan, Inc. DBA Ingram Park Mazda Failure to produce records within (15) days. Failure to timely transfer title and pay sales tax. $750.00 and attend a Dealer Training Seminar. 13-0386 ENF Jose Luis Cavazos DBA Bandera Motors Failure to remove Texas plates. Misuse of temporary dealer tag or failed to comply with recordkeeping requirements. Failure to have written consignment agreement. $1,000.00 and attend a Dealer Training Seminar. 13-0443 ENF Daniel Alaniz/Victor Alaniz DBA RGV Autosource Misuse of buyer temporary E-tag. Failure to maintain complete records by licensed dealer or auction. $1,000.00 and attend a Dealer Training Seminar. 12-1070 ENF Joe E. Blanco DBA Maverick Motor Co. Failure to remove Texas plates. Misuse of temporary dealer $150.00.

tag(s).

12-1082 ENF Barrio Motors Inc. DBA Barrio Motors Inc. Failure to display buyer’s guide. Failure to maintain complete records by licensed dealer or auction. Misuse of temporary dealer tag(s). $300.00. T e x a s

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13-0261 ENF Santiago Hernandez, Santiago Hernandez III DBA Junior Motors Failure to display buyer’s guide. Failure to remove Texas plates. $150.00. 13-0349 ENF Filiberto Hernandez DBA FH Auto Sales Failure to display buyer’s guide. Failure to remove Texas plates. $150.00. 13-0376 ENF Joseph Greer DBA Greer Auto Sales Failure to remove Texas plates. $50.00. 13-0400 ENF Garcia Auto Sales Inc. DBA Garcia Auto Sales Inc. Failure to remove Texas plates. $50.00. 13-0404 ENF XFinity Car Sales Company DBA XFinity Car Sales Failure to remove Texas plates. $50.00. 13-0407 ENF El Paso Del Bravo Company DBA Del Bravo Motors Failure to display buyer’s guide. $100.00.

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13-0408 ENF Eloy Zuniga DBA America Motors Failure to remove Texas plates. $50.00.

13-0445 ENF Chelsea Furrow DBA Auto Connection Failure to display buyer’s guide. $100.00.

13-0412 ENF Joel Sexton, Kristel Sexton DBA RT66 Sales Failure to display buyer’s guide. Failure to remove Texas plates. $150.00.

13-0453 ENF Texas La Fiesta Auto Sales LLC DBA La Fiesta Auto Sales Failure to display buyer’s guide. $100.00.

13-0444 ENF Northtown Auto Center GP LLC DBA Northtown Auto Center Failure to remove Texas plates. Failure to maintain complete records by licensed dealer or auction. $150.00. 13-0412 ENF Joel Sexton, Kristel Sexton DBA RT66 Sales Failure to display buyer’s guide. Failure to remove Texas plates. $150.00. 13-0444 ENF Northtown Auto Center GP LLC DBA Northtown Auto Center Failure to remove Texas plates. Failure to maintain complete records by licensed dealer or auction. $150.00.

13-0475 ENF Abel Motors, Inc. DBA Abel Motors Inc. Failure to remove Texas plates. $50.00. 13-0480 ENF Erick Teran DBA Universal Auto Sales Failure to remove Texas plates. $50.00. 13-0482 ENF Julio C. Calle DBA Premium Autoplex Failure to remove Texas plates. $50.00. 13-0486 ENF Sand Dollar Auto Plex, LTD DBA Quality Used Cars and Trucks Failure to remove Texas plates. $50.00.

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legal corner

Privacy Notice Requirements for Independent Dealers by Michael

e all get them from time to time. They come with our insurance premium notices, in our bank statements, and in our credit card bills. They are innocent-looking pieces of paper that most likely go right to the trash can. “They” are privacy notices, the formal notices from banks, insurance companies, and credit card companies, amongst others, informing us what the companies’ policies are with regard to exchanging our personal information with other companies. In most cases, we are given the opportunity to “opt out” of some of the sharing practices, by filling out a portion of the form and returning it to the issuing company. One thing all these companies have in common is they fall within the definition of “financial institution” that appears in the GrammLeach-Bliley Act (G-L-B) and the FTC’s Privacy Rule. And, at least one thing that many car dealers have in common with the big boys of the financial world is that they too are often “financial institutions” under the very expansive definition. The Privacy Rule applies to car dealers who (1) extend credit in connection with the purchase of a car for personal, family, or household use (typically a BHPH transaction), or (2) arrange for someone to finance or lease a car for personal, family, or household use (typically an indirect lender transaction). There are two occasions when privacy notices are generally required to be given: (1) no later than when a retail installment contract is signed, and (2) annual follow-up notices

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W. Dunagan

to customers whose accounts are active. Here’s how the rule applies to different types of dealer sales:

Cash Sales

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

Buy-Here-Pay-Here Transactions

While they technically fall under the requirements of the G-L-B and the Privacy Rule, BHPH dealers are not the main target of the rule’s requirements. The central thrust of G-L-B and Privacy Rule is to limit sharing of personal information (name, address, phone number, driver’s license number, and social security number, for instance) with unaffiliated third parties. Independent BHPH dealers (unlike, banks, insurance companies, and credit card companies, and maybe franchised dealers) typically don’t sell customer lists or otherwise share customer information with third parties. When they do share personal information with third parties, the sharing most often falls under one of the exceptions to the Privacy Rule (as explained below).

Pre-sale

A BHPH dealer who does not share personal information with third parties, except under the exemptions discussed below, would not

TIADA general counsel

be obligated to give a privacy notice to a potential buyer until the person actually entered into a contract. If the dealer intends to share personal information with third parties, it would be necessary to give a privacy notice with an opt-out provision upon the receipt of personal information.

Post-sale

If a BHPH transaction is completed, the dealer would have to give the appropriate privacy notice, even if no unexempted sharing is intended, no later than the time of the signing of the retail installment contract. Also, once the contract is entered into, the BHPH dealer becomes obligated to send an annual privacy policy notice (which can be the same notice as the one given at the time of sale) on to each debtor as long as the debtor’s account remains active.

Retail or Indirect Transactions

Because at the time of signing the dealer is listed on the retail installment contract as the seller and creditor, the same rules as those that apply to the BHPH dealer would apply here. That is, a privacy notice would have to be given no later than the time of the signing of the retail installment contract, even though the dealer intends to assign the contract immediately afterward to a third party. 41

After the assignment to the third party takes place, the responsibility for sending the annual notices shifts to the assignee of the contract, and the dealer is relieved of that duty. However, the dealer must continue to honor the terms of the privacy policy with regard to protecting the personal information of the debtor.

Turn-downs

Third-Party Lenders

The Opt-Out Notice

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

If the dealer denies the extension of credit to an applicant, and has no intention of sharing this person’s information, then no privacy notice is required. (However, an Adverse Action Notice under the Equal Credit Opportunity Act and Regulation B is probably required, but that’s another topic for another article). Most real financial institutions give their customers the long-form privacy notices that disclose to whom, under what circumstances, and which types of personal information might be shared with unaffiliated third parties. Because they intend to share personal information that is not exempt under the exceptions to the Privacy Rule, they must give their customers the opportunity to opt out of having certain types of information shared. The opt-out is usually exercised by sending in a tear off coupon or calling a toll-free number.

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

The Exceptions

Much has been said to this point about the exceptions to the Privacy Rule and how exchange of personal information under an exception doesn’t constitute a violation of the Privacy Rule or trigger the requirement of giving an opt-out opportunity. What are the exceptions that allow the sharing of information? • The most common type of sharing of information by BHPH dealers is the information given to collectors

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and repossession agents to locate Some due diligence should be exercised to verify that the person redebtors and repossess vehicles questing the information is in fact when a debtor is in default. This a law enforcement officer. information can be shared under an • Information can be shared at the reexception to the opt-out rules for quest of and with the permission of third-party vendors, as long as only the debtor (such as pay-off informainformation necessary to carry out tion requested by a bank or dealer the purpose of the sharing is given, taking a vehicle in trade), or to and as long as the third-party vendor agrees in writing (1) not to pass the information The dealer who doesn’t along to a third party and (2) to protect the informashare customers’ personal tion and properly dispose of it when it is no longer information with third needed. (A form vendor agreement is available parties, other than under at NIADA.com or from the exceptions described TIADA.) • Another commonly used above, can use a simplified, exception is the “secondary market sales” excepshort-form notice form. tion that allows the holder of a car receivable to pass comply with a subpoena, or a civil, on personal information to a third criminal or regulatory investigation. party in conjunction with the sale or assignment of the receivable to The Short-Form a third party without violating the Privacy Rule or triggering the optPrivacy Notice out requirement. The dealer who doesn’t share cus• Credit information given to credit tomers’ personal information with reporting agencies is also exempt. third parties, other than under the That is, a creditor who routinely exceptions described above, can use reports credit information to a a simplified, short-form notice form. credit bureau is not considered The simplified notice describes the to be sharing or trading personal categories of nonpublic personal information. information collected; states the fact • Personal information can also lethat the creditor does not share nonpublic personal information about gally be given to law enforcement customers to third parties, except as officers, or otherwise to comply authorized by law; and describes the with federal, state or local laws.

FOUND IT.

steps taken to protect the privacy and security of the information. No opt-out provision is necessary. A form that meets this requirement is available from Burrell Printing (800-531-5234). The Burrell form comes in duplicate with a signature line to acknowledge receipt. One copy is given to the debtor at the time of closing and the other should be kept in the dealer’s file. Many dealer compliance and contracting programs also have forms available. The same form can be used to meet the annual notice requirement. No signature is necessary, and the form can be mailed. If a dealer does not qualify for the simplified form, it is necessary to go to the special website set up to offer creditors an “online form builder.” The site is www.federalreserve.gov/ bankinforeg/privacy_notice_ instructions.pdf. A copy of the rule and model forms can be found at TXIADA.com. Michael W. Dunagan is an attorney in Dallas, Texas who has represented the Texas Independent Automobile Dealers Association for over 36 years. He has written a number of books and hundreds of articles for trade journals and law reviews. His clientele includes dealers, banks, finance companies, auto auctions and credit unions.

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Legislative Bulletin: The Final Countdown (cont’d from pg. 14)

HB 2947 Harper-Brown

This bill proposes the elimination of the VTR-136 form as a required document in the deal jacket.

TIADA’s Position: For TIADA’s Action: TIADA pre-

sented the idea behind this bill to Rep. Harper-Brown in January and she agreed to author the legislation. The bill was considered at a public hearing in the House Transportation committee where Scott Allen (Auto Land – Haltom City) testified in favor. The bill made it to the House floor where we sent out an action alert and over 143 of you sent emails to your legislator asking for support. It passed out of the House overwhelmingly but it stalled in the Senate Transportation committee when it was not placed on the committee agenda.

made phone calls, sent emails and made personal visits to the Capitol to lobby against this bill. At press time the bill itself is dead, but the association is watching closely for amendments to other bills that might include similar language. As you might guess, there is more to each of the stories above. A special Legislative Summary will be offered at this year’s Annual Conference (during the House of Delegates) which will include some of the behind-the-scenes activities from this session. If you can’t make it, keep an eye out for the September issue where we will discuss key bills that passed and their effect on our industry. A special thank-you goes to each dealer who attended TIADA Legislative Day at the Capitol, came to the Capitol to walk the halls, testified, made calls and sent emails throughout the session. Thanks to these members, your voice is not only being heard, it’s growing in unity, strength and influence.

HB 3071 Pitts

This bill would allow a third party company to finance vehicle repairs, and would allow a mechanic’s lien to be assignable to that third party. It would allow the third party to repossess the vehicle in the event of a default on the repair contract, and to foreclose on the mechanic’s lien without a release of lien from the original lienholder.

TIADA’s Position: Opposed TIADA’s Action: TIADA origi-

nally met with author’s staff to express our concern. Shortly after, we built a coalition of bankers, tax assessors and credit unions to raise opposition to the bill. When the bill was laid out before the House Business & Industry committee, Phil Lathrop (VP Auto Sales – Garland), among others, testified against it. Many dealers June 2013

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behind the wheel

Martin

Do You Have It Covered?

ive years ago while reviewing the education lineup at one of my favorite conferences, the American Society of Association Executives (ASAE), I concluded they had way more education in three days than I could attend by myself. The only way to truly get the most out of the conference was to bring someone with me. The conference was in San Diego and the registration was just under $1,000, so I knew it would be quite an investment to attend. But, I had attended in the past and knew the value was there. If you have seen the lineup for the TIADA Annual Conference & Expo you might be struggling with the same quandary I faced five years ago. How are you going to take advantage of all the simultaneous education? Take the very first breakout session scheduled for 9:45 to 10:45 on Monday morning. Do you really want to miss the peace of mind Bill Harbeson, the director of DMV Enforcement could give you and your dealership? Or do you want to choose between newcomer Jennifer Suzuki and the national dealer panel discussion? I guarantee you both will have nuggets you want to take home. And then there is Mark Dubois on Collecting the Problem Customer; if you are a BHPH operator you can’t miss this one – and all this is just the first hour! The choices don’t get any easier later in the day or on Tuesday with the dealer roundtable discussions. The Expo has grown too — with over 75 exhibiting sponsors, there is bound to be an exhibitor or two you

by Jeff

tiada executive director

want to spend some extra time with. When that happens you can make sure your key employees are attending the education and can share that insight when you return to your dealership. After assessing the value I received by attending the ASAE conference in the past it was an easy decision for me. Two staff members attended the conference and we have continued budgeting for at least two staff members to attend the ASAE or the Texas Society of Association Executives conference every year since. Our plan is simple: before the conference we get together and identify sessions we would like to attend and exhibitors we want to visit. After the conference we debrief and follow up when needed. Many of the products and ideas we use today were introduced to me or one of our staff members during these conferences. The board has tiered the pricing structure to make it more cost-effective for those of you bringing two or more employees, and this year your VIP Auction Card is worth $100 cash if you bring it to the Conference Exhibit Hall. Last year I was constantly asked by attendees, “Which session should I attend?” My answer — all of them. You know the one session you don’t attend will be the one everyone will be talking about at breakfast the next morning. I have already seen the registration forms coming in and I see dealers who have attended in the past bringing three and four attendees this year. Make sure your dealership doesn’t miss out on the session everyone will be talking about, whichever one that is.

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