Texas Dealer, March 2014

3rd Party Liability Insurance Check Must Include Lienholder

Deferred Sales Tax

Stopped $250,000 Dealer Bond Bill

Mechanics’ Lien Reform

Dealers are No Longer the Insurance Police

M A R C H

R A D N E S S

Send in Your Bracket for a Chance to Win

$500!

In This Issue: –N ational Motor Vehicle Title Information System (NMVTIS) and Title Check –A dvertising Rules and Common Infractions –M ichael W. Dunagan on Strict Foreclosure versus Private Sale

Curbstoning Crackdown

TxDMV Board Position for Independent Dealer

Stopping the Transfer of a Mechanic’s Lien

••••••••••••••••••••••••••••••••••••

BID ON 4 LANES. WATCH 7 MORE. FROM 1 SCREEN. © 2014 ADESA, INC.

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Volume XIII

2014 TIADA Board of Directors

chairman of the board Byron L. Riley/Texas Auto Solutions 409 North Loop West Houston, TX 77008 Office: 713.869.3405 Email: ub2526@yahoo.com

Secretary HL Hensley/Automax of Lubbock P.O. Box 3040 Lubbock, TX 79452 Office: 806.744.3533 Email: hl@gospac.com Treasurer Kathrine Tolsch/CICO Auto Sales 11050 Harry Hines Blvd.

Dallas, TX 75229 Office: 214.352.9282 Email: cicoauto@verizon.net 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) Tommy Gregory/Abilene Used Cars Sales Inc. 497 E.S. 11th Abilene, TX 79602 Office: 325.676.8000 Email: aucsinc@sbcglobal.net Vice President, Dallas (Region 3) Kevin Mims/VP Auto Sales 2921 S. Garland Ave. Garland, TX 75041 Office: 972.864.1300 Email: kevinm@vpautosales.com 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) Robert Beck/Stop N’Drive Motors 711 N. General McMullen Dr. San Antonio, TX 78228 Office: 210.432.1101 Email: stopdrive@texas.net 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 Sonny Paredez/Discount Auto Center 7203 NW Loop 410 San Antonio, TX 78245 Office: 210.680.5600 Email: sonnyparedez@yahoo.com TIADA Executive Director Jeff Martin 9951 Anderson Mill Rd., Suite 101 Austin, TX 78750 Office Hours M-F 8:30am - 4:30pm 800.442.5944 • Fax 512.244.6218 jeff.martin@txiada.com

Issue 3

/

M a r c h 2 014

texasDealer

President Michael Thomasson/Mike Carlson Motor Company 264 Exchange St. Burleson, TX 76028 Office: 817.366.9578 Email: mthomasson@mcmcauto.com

President Elect Brent Rhodes/Fiesta Motors 5150 Industrial Way Drive Buda, TX 78610 Office: 512.312.2201 Email: brent@fiestamotors.net

/

5 Officers’ Message

contents

by Michael Thomasson, TIADA President

8 On The Cover: March Legislative Radness 12 Local Chapters 12 2014 Auto Auction Directory & Resource Guide 15 You Can’t Say That! Can You? Common Advertising Violations

by Danny Langfield

19 Don’t Buy a Wreck. Do a Title Check.

by The TxDMV NMVTIS Project

23 Board of Directors Meeting Minutes 28 Membership Recruitment Challenge 31 Regulation Matters: Location, Location, Location

by Danny Langfield

TC Announces Sweep F Against 10 Auto Dealers 35 Fines & Violations 43 Legal Corner: The Differences Between Strict Foreclosure and Private Sale 33

by Michael W. Dunagan

44 Upcoming Events 45 TIADA Scholarship Application 46 Behind the Wheel

by Jeff Martin

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

Register now! Select the Annual Conference Expo link and you’ll be taken to www.TiadaAnnualConference.com where you can see the Schedule of Events, check out keynote presenters and get registered at 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, 9951 Anderson Mill Rd., Suite 101, Austin, TX 78750. 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 TIADA Luncheon with Attorney General Greg Abbott

by Michael

Thomasson

Mike Carlson Motor Company (Burleson) TIADA president

“Coming together is a beginning; keeping together is progress; working together is success.” ~ Henry Ford

I

n January, TIADA sponsored a lunch for Attorney General Greg Abbott at Austin’s historic Driskill Hotel.* It was a great afternoon with a “Who’s Who” of Texas dealers in attendance. Mr. Abbott, who is campaigning for governor, shared his ideas for our school system, immigration, and for continued business development in Texas.

Mr. Abbott told us that 1,400 people a day are moving to Texas because of jobs, the cost of living, and for freedoms we have in Texas that people in other states don’t enjoy. I love those freedoms and I want to be a part of protecting them.

As I sat at the luncheon, I thought about how far our association has come — from being a reactive association to a proactive association. Over the last 7-8 years, a true grass roots effort has enabled TIADA to make significant impacts on legislation.

We have successfully helped pass impactful legislation as well as block bills that would have been very harmful to our industry. (You can read about some specific TIADA accomplishments in this issue’s cover story,

Over the last 7-8 years, a true grass roots effort has enabled TIADA to make significant impacts on legislation.

March 2014

T e x a s

D e a l e r

5

and about current legislative opportunities in Jeff Martin’s, “Behind the Wheel.”)

To every dealer who was unable to make it to the event, we want to thank you for your support and let you know that you were missed. It was truly a pleasure to share time at the luncheon with fellow dealers and Mr. Abbott. There were about 30 dealers in attendance. Imagine the influence our association could have if 300 dealers attended a luncheon like that. Think of all the progress TIADA has made in the last few years and where we will go from here when we explode our membership to double or triple its size. It’s an exciting time for TIADA. We will continue to come together, keep together, and work together for the success of our industry. *This article is not an endorsement of Greg Abbott’s campaign.

TIADA recognizes that members are all impacted differently by issues and encourages you to become involved in the political process so that your individual voice can be heard.

6

T e x a s

D e a l e r

March 2014

your name:

Dealers are No Longer the Insurance Police

Mechanics’ Lien Reform

R A D N E S S

M A R C H

CHAMPION

dealership/business:

Tiebreaker: What percentage of TIADA members have renewed their membership for 2014?

Complete This Bracket for a Chance to Win $500!

hat was the most valuable TIADA legislative victory of the last twenty five years?

W

Stopped $250,000 Dealer Bond Bill

Deferred Sales Tax

Stopping the Transfer of a Mechanic’s Lien

TxDMV Board Position for Independent Dealer

Curbstoning Crackdown

3rd Party Liability Insurance Check Must Include Lienholder

HOW TO ENTER: Select the legislative victory you believe is most valuable in each matchup. The victory chosen by the most members in each matchup will advance. Two points will be awarded for each correct pick in round one, four points for round two, and eight points for the championship. Fax your completed bracket to 512.244.6218 or scan and email to info@txiada.com.

Deadline for entry is Wednesday, March 19. Complete results and winner will be published in the April issue of the Texas Dealer.

Deferred Sales Tax

Prior to passage by the Texas Legislature of TIADA’s Fair Tax Bill in 1993, dealers were responsible for paying the total amount of the motor vehicle sales tax at the time of transfer.

And there was no provision in the law for obtaining a refund (or bad debt credit) if a debtor quit paying on the car. Hailed by many as the most significant cost-saving achievement of the association, the implementation of deferred sales tax allowed for the payment of motor vehicle sales tax out of customer payments, and for the cancellation of sales tax once those payments stop. (A more thorough description of this victory may be found in the July 2012 issue of the Texas Dealer, available upon request from TIADA).

Stopped $250,000 Dealer Bond Bill

TIADA was able to stop a bill in the 81st legislature that would have increased the required dealer surety bond to $250,000.

March 2014

T e x a s

D e a l e r

Mechanics’ Lien Reform

For many years, due to a gaping hole in the titling system, car creditors were losing an ever-increasing number of vehicles to fraudulent mechanics’ liens. During the 81st legislature in 2009, TIADA spearheaded an effort to reform the system. In a nutshell, the successful passage of a complex bill authored by Sen. John Carona and Rep. Patricia Harless provided that: A mechanic must notify the county tax assessor of the lien; the tax assessor must, in turn, notify the dealer; a signed work order must be provided with the notification; and the mechanic must allow inspection of repairs. Furthermore, failure by the mechanic to meet the above requirements results in the dealer’s lien being superior to the mechanic’s lien.

Dealers are No Longer the Insurance Police

HB1707 in 1999 did away with the requirement that a licensed car dealer provide proof of liability insurance for the buyer when a title is transferred. Since the mandatory liability law was passed in 1991, the duty to have liability insurance had been placed on the operator of a vehicle.

The law, prior to passage of House Bill 1707, required county tax collectors to reject any application for registration that wasn’t accompanied with proof of insurance.

What trapped dealers in the process was the requirement in the title act that licensed dealers must handle the transfer paperwork.

9

3rd Party Liability Insurance Check Must Include Lienholder

In 1989, at the urging of TIADA, the 71st legislature passed a bill that placed a lien on liability insurance proceeds in favor of the holder of a perfected motor vehicle lien. Since the bill’s passage, if a liability carrier goes around the recorded lien holder, the carrier can be sued and forced to pay. The law provides that the lienholder must be included regardless of the settlement amount.

(A more complete description of this statute can be found in the April 2010 issue of the Texas Dealer, available upon request from TIADA).

Curbstoning Crackdown

While this legislative victory has only been in effect for about six months, the potential impact to the industry is significant. The passage of HB2690 (Elkins) allows any peace officer in the state, regardless of location, to take action against a person who is engaged in business as a dealer without a license. When an officer has probable cause that a vehicle is being offered for sale by an unlicensed person, the officer can attach a notice to the vehicle stating that the vehicle may be towed in two hours if not removed. A vehicle that is not removed within the two hour notice period may be towed and stored at a vehicle storage facility (VSF). The law also

provides that, once notice has been attached, a peace officer may prevent the vehicle from being removed by the curbstoner unless the person provides evidence of ownership in the person’s name.

TxDMV Board Position for Independent Dealer

The legislature elected to carve motor vehicle regulation out from under TxDOT in 2009 and establish and entirely new agency, the Texas Department of Motor Vehicles. TIADA supported the creation of the agency, provided that the governing board include a position reserved for an independent dealer. That provision was included, and Gov. Perry appointed TIADA Past President Jim Campbell to the inaugural TxDMV board of directors. When Jim stepped down, the governor replaced him with another TIADA past president, Blake Ingram, who currently serves on the board.

Stopping the Transfer of a Mechanic’s Lien

In the 83rd legislative session (2013) a bill was filed that proposed allowing a mechanic’s lien to be transferrable to a 3rd party finance company, who could then foreclose on that lien with no regard for the dealer’s original lien.

TIADA believed this legislation would open the floodgates to mechanic’s lien abuses that had been so effectively curtailed by the association’s 2009 reform bill. Fortunately, with help from the tax assessor-collectors association, Rep. Patricia Harless and other stakeholders, TIADA was able to persuade the author to leave the bill pending in committee. It was never heard on the House floor.

Here are a few significant victories that narrowly missed the cut for the Elite 8:

Related Finance Company May Defer Sales Tax: This legislation, passed in 2007, established that motor vehicle sales tax is not accelerated when a note is sold by a dealership to a related finance company (RFC) that shares at least 80% common ownership with the dealership.

Preserving the Blue Law: The 2013 session included an effort to repeal the blue law, which requires that dealerships not be open on a consecutive Saturday and Sunday.

“Repo Man” Bills: In the early 2000’s TIADA fought back several legislative efforts that would have effectively prevented a dealership from repossessing its own collateral.

Airbags: In the 2007 session TIADA successfully worked with Rep. Leibowitz to amend his counterfeit airbag bill to ensure that dealers were not held liable for the operability of previously installed airbags.

Did we fail to include one of your favorite legislative accomplishments? If so, drop us a line at info@txiada.com or give us a call at 800.442.5944 and let us know what we missed.

10

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March 2014

2 014 tiada a u t o a u c t i o n

Local Chapters Victoria Donny Cowan • Rock Motors 361.573.3325 rockmotorsllc@tisd.net 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 cicoauto@verizon.net Meetings every other month Houston Michael Zak • Dixon Motors 281.931.1300 houstoniada@gmail.com Meeting - 2nd Monday (Monthly) Waco-Heart of Texas Bill Miller • Bill Miller Used Cars 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 12

ABILENE Alliance Auto Auction of Abilene 6657 US Hwy 80 West / 79605 325.698.4391 / 866.310.3555 www.allianceautoauction.com Ben Stock, Auction Manager Danielle Staples, Office Manager Friday: 10 AM

CM Company Auctions

2258 S. Treadaway / 79602 325.677.3555 / 866.310.3555 www.cmauctions.com Gregory Chittum, Owner Thursday: 10 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 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 – N. Houston 1440 FM 3083 / Conroe / 77301 936.441.2882 www.americasautoauction.com Buddy Cheney, GM Ben Nash, Sales Manager Mondays: 6:30 pm

longview Alliance Auto Auction, LLC 6000 SE Loop 281 / 75602 903.212.2955 www.allianceautoauction.com Jeff Loftin, Auction Manager Brenda Hunt, Office Manager Friday: 10 AM T e x a s

D e a l e r

March 2014

directory & resource guide LUBBOCK

oKLAHOMA CITY, OK

Lone Star Auto Auction

Dealers Auto Auction of OKC

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

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 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. Interstate Hwy 35 / Elm Mott, TX / 76640 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

March 2014

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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 AM – GM Sponsored Factory Sale

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 13

MOTOR

VEHICL

E RETAIL

INSTAL

LMENT

SALES

RED ITOR SELL ER/C : ADD RESS ZIP: CITY, ST,

CONTRA

CT DAT E:

:

ge. ce Char vehicle of the Finan ase the motor ding ve a part BUYER: PHONE: e to purch ents accor to recei R: act, I choos to make paym its right CO-B UYE and retain By signing this contr act. I agree not. “your.” contr : . contract s do “you” or es in this the other ADD RESS assign this is also shown below red to as other charg ment even if r is refer The Seller may ZIP: Price” agree e, and any CITY, ST, ” The Selle Selle r. .” The “CashFinance Charg promises in this Purchased “I” or “me. tiated with the the ced, l Sales Price red to as Use For Which nego PHONE: to keep all the “Tota the Amount Finan be refer as ld is agree I may , r(s) below r ❒ New Family or Househo The Buye Percentage Rate t price is shown I agree to pay youn signs as a buyer respects. ❒ Personal, Commercial al License Numbe in all perso ble) ❒ Demonstrator ber The Annu TO PAY: The credi of this contract. than one ss or r vehicle(s) (if applica ion Num xe. ❒ Busine act. If more ved the moto to the terms Identificat PROMISE Vehicle t according ule in this contr ted, and appro ❒ Factory Official/E ❒ Agricultural on credi accep ent Sched Model to the Paym ughly inspected, ❒ Used CAT ION IDENTIFI I have thoro Make VEH ICLE OR No.: Year MOT License Stock No. No.: License

Trade-in( Year : Year :

s):

Make: Make:

ANNUAL TAGEmy of PERCEN The cost RATEt as a yearly rate. credi

VIN: VIN:

Model: Model:

Financed Amountof credit provided nt

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The dolla will cost

Price

ents

of Paymhave paid Total nt I will The amouI have made all uled. after as sched payments

on Total Sale purchaseof ent cost of my The totalwith down paym credit $

$

$

$ % $

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 Finan all intere ve my of the p this To secure security d of part do not recei default, Security: (1)Kee writing. get a refun t nonpayment, ge: If you ises in payment. so, I can NO.: Late Char n abou $ all prom scheduled . If I do ds.

STOC K put ...... informatio % of the er to........

I owe early yment refun ment for ................ the deal and prepa pay all that refer to this docu ................ rce. Ask nt: I can uled date, I will ................

DATE: to enfo Prepayme l Information: e the sched cult........

REDI TOR: diffi........ full befor are........

SELL ER/C ises........

Additiona repayment in .$ D ................ : ER red ken prom ................

FINA NCE : Spo ces) ........

VIN NUMB ADD RESS any requi servi ANT ................

AMO UNT ... $ ORT s, and IMP ................ sorie ION OF , ST, ZIP: ................ ........ acces CITY IZAT ........

ITEM ................ uding any ................ form. ........ER: $YEAR 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. Downpay ........: ........ .....$ RESS tions speci l:(3) Deferred ......... $ ........

ADD payment ........ ................ r to the and condi Mode ................

MAKE ZIP: Cash down ent (Refe VEHICLE ................ ................ the terms $ ................

E under CITY, ST, ................ ................ downpaym ................ you,........ ................ase from........

VEHICL $ Deferred ................ ) ................ ................ y purch ........ belowE: -in...........

PRICE Make: hereb 4.A.PHON ................ : I/We........ ................

(Optional) (St. & No.): Gross trade see Line to License NUMBER ........ ........ ........

G:SOLD........Year: ICLE “0” and by seller STOCK VEHBEIN ................ amounts.): - payoff tive, enter DEALER ........ ........ ........ THIS VEH ICLE........ . $ ge: ........Milea ........ 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 comp anies damage A. Net $ no resp damage ...mes physical company TOTAL 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 any YOU WIL comp ................ eme ........ .$ 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. Offic ess: ................ of Cash ................ tory tax... hand Addr ................ .......... $ ........ the part the nt: rs for ................ er’s inven % of Amou ................ ................ ................ to buye _ired by law.

Lienged y of G. Deal ................

Dealer's $ copal ................ ________ ................ a ada ..........$ requ tration fees. berchar and forcarg er's ntory Tax r taxes........ may er ................ ................ notice is ................ : ser labo deal but $ e and/or regis deal ........ dad ........

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I. Gove $ ed to antyerido , excl certificate no pued ary rage will nt agre fees......... requNo.: cove ................ erfee even mor State Sales ment rnment no esStock the warr e amoungación By:A docu dealnabl mentación Color: inspection ................ Quoted anty The J. Gove give you docu duri ment rario vehicle ial fee.TY. ofdewarr faildocu d a reaso r.............. es" may rnment and that de an offic RAN to deale hono ONion............. anat not exceeems rario is not ATI License Fees $ K. Gove . Un $ anti expl TED WAR fee mayred l.syst ce fee paid Un honofor full ORM ........ lied warr ary feeLIMI a venta on INF ........"imp ty servi mentary cove Model: N: oficia ume con INuna FULL ........ document (St. & No.): os nt therario Registrati e law, ley.

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feature You Can’t Say That! Can You?

Common Advertising Violations

I

n light of the recent enforcement actions taken by the FTC (see pg. 33), the association asked TxDMV to share some of the most common advertising rule violations they encounter among their independent dealer licensees.

The violations below may come as somewhat of a surprise to some. And many dealers will no doubt see advertising rules here that they observe being broken by licensees with regularity. However, enforcement of these rules is no small task, given the breadth and scope of how “advertising” is defined: “Advertisement” means an oral, written, graphic, or pictorial statement made in the course of soliciting business.” 43 TAC §215.244(1)

According to TxDMV, this includes, but is not limited to: Newspapers, magazines, notices, signs, posters, flyers, displays, circulars, direct mail, radio, Internet, pamphlets, letters, banners, soap signs, business cards, and television. (For information on TxDMV’s enforcement authority, please see “TxDMV Advertising Enforcement,” next page.)

The violations described below are among the most common, but they do NOT constitute a complete listing of the rules. The advertising rules can be found in their entirety by going to the Links page of www.txiada.com and selecting “Texas Administrative Code – Transportation, Chapter 8 – Motor Vehicle Distribution.” On the Texas Administrative Code page that follows, choose “Subchapter H – Advertising.”

by Danny Langfield TIADA Deputy Director

sing the term “loaded” without listing the optional U equipment of the vehicle when the price of the vehicle is advertised.

Advertising a guaranteed trade-in amount or range of amounts.

Advertising disclaimers that are not clear and conspicuous (“mouse print”).

Note: A disclaimer needs to be presented so as to be readily noticed and understood.

Advertising terms such as “wholesale prices” and “wholesale to the public” in connection with retail sales.

Advertising terms such as “lowest price”, “best price”, or “best deal.”

Advertising terms including: Write Your Own Deal / Name Your Own Price / Name Your Own Payments / Everybody Financed / No Credit Rejected / We Finance Anyone

Dealer Price Advertising

hen featuring an advertised sale price of a new W or used motor vehicle, the dealer must be willing to sell the vehicle for such advertised price to all retail buyers.

The advertised sale price shall be the price before the addition or subtraction of any other negotiated items.

The following advertising terms, phrases and techniques are prohibited:

dvertising a savings claim or discount offer on a A used motor vehicle.

Advertising statements such as “everyone approved”, “we finance anyone”, and similar statements that represent or imply that no prospective credit purchaser will be rejected because of his inability to qualify for credit.

This is prohibited per Ad rule 215.247 – Untrue Claims. Note: Similar statements include “all applications accepted” and “no credit application refused.”

Failing to identify the vehicle by model year, make, and model line and style or model designation when the price of the vehicle is advertised.

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T

he Texas Department of Motor Vehicles (Department) operates pursuant to the Texas legislature’s stated purpose found at the beginning of Chapter 2301 of the Occupations Code, “…that the distribution and sale of motor vehicles in this state vitally affects the general economy of the state and the public interest and welfare of its citizens.” The objective of the Department’s Advertising Rules (Rules) is to require truthful and accurate advertising practices for the benefit of the motor vehicle industry itself and the public by providing a level playing field for all dealers and to protect buyers from unscrupulous advertising practices.

The focus of the Rules is to prevent the use of use false, deceptive, unfair, or misleading advertising.

The Department’s Enforcement Division (Division) approach to advertising is two-fold: achieve compliance through awareness and education, and, failing that, assure compliance through disciplinary actions including sanctions. The Division would much rather utilize its resources educating motor vehicle dealers on proper advertising than initiating an enforcement action for violations. The Division offers advertising specific training at its Dealer Training Seminars, and at training at events concentrating on advertising. If given enough lead time, the Division will review a dealer’s proposed advertising for compliance with the Rules prior to publication. If you are using advertising for the first time you are strongly encouraged to use this service.

If you believe a motor vehicle advertisement is in violation of the Rules and you want to file a complaint with the Department, please send the complaint form along with a full copy of the advertisement together with information on when and where the advertisement appeared. The Division will investigate the advertisement and take appropriate action and then inform you of the results.

Ray Willoughby

Managing Attorney, TxDMV Enforcement Division 16

e only charges that may be excluded Th from the advertised price are: • Tax, Title & License (TT&L) • Fees or Charges allowed by law IE: Doc Fee The price can go down, but not up

Triggering Terms

If any of the following terms are used…

Amount of a down payment (either % or $) Amount of any payment (either % or $) Number of payments Period of repayment, or Amount of any finance charge

…then the ad must clearly and conspicuously include the following: The amount or percentage of the down payment; The terms of repayment (from which the number of months to make repayment and the amount per month can be determined) including any balloon payment; The annual percentage rate (APR); and The amount of annual percentage rate, if increased, after consummation of the credit transaction.

According to the agency, a dealer may write the amount of the down payment on the windshield of a car. The required information triggered, in this case the number of months to make repayment, monthly payment, and APR, does not have to be written on the windshield. This information may be written on a card or sheet of paper and displayed inside the car or in the showroom.

Another advertising rule to be aware of: To advertise a used vehicle for sale, you must have the vehicle in your possession and have the title assigned to you.

Finally, always keep in mind ad rule §215.242 — General Prohibition: “A person advertising motor vehicles shall not use false, deceptive, unfair, or misleading advertising.”

Special thanks to TxDMV Enforcement for their contributions to this article. Enforcement Director, Bill Harbeson, will present a special session on dealer advertising rules at the 2014 TIADA Annual Conference and Expo.

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feature

Don’t Buy a Wreck. Do a Title Check.

The TxDMV NMVTIS Project

T

he Texas Department of Motor Vehicles (TxDMV) continues to roll out automation projects, and it’s on the brink of deploying one that will offer protection for dealers and consumers.

In April, the agency will “go live” with full implementation of the National Motor Vehicle Title Information System (NMVTIS). This is when the TxDMV will begin running all Texas title applications through NMVTIS, as required by federal law.

But even today, dealers and consumers can start using the system themselves by going to Title Check on the TxDMV website, www.TxDMV.gov. For as little as a couple dollars, you can check whether a vehicle you are looking to buy at auction or take in trade has a clean title.

Consumers can use it to check the Vehicle Identification Number of a vehicle they are eyeing, so they can purchase a used vehicle with confidence.

For those of you that used the previous version of Title Check, you will notice a significant change. NMVTIS provides much more complete and accurate information.

For example, in our current system if a title was previously washed, we have no way to trace it back to the state of origin. NMVTIS will do that.

We understand how important your customers are to you, and NMVTIS allows you to check the title history of a vehicle from states throughout the country, making sure neither you or your customer are surprised by any valuelimiting remarks (brands) associated with that vehicle.

“The best way dealers and consumers can protect themselves from any surprises when they go to title a vehicle is to connect to Title Check and use one of the approved title information providers before making a purchase,” said TxDMV Executive Director Whitney Brewster.

The ability to check titles across states will greatly diminish the amount of title fraud and illegal activity associated with stolen vehicles.

The American Association of Motor Vehicle Administrators (AAMVA), which administers the NMVTIS program for the U.S. Department of Justice, reports the following results from some of the states that are already fully integrated in the program: Indiana is experiencing a reduction in lawsuits by consumers who were given clear titles with missing brands.

Virginia is seeing a 17% decrease in motor vehicle thefts.

Arizona is experiencing a 99% recovery rate on vehicles identified as stolen.

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“The best way dealers and consumers can protect themselves from any surprises when they go to title a vehicle is to connect to Title Check and use one of the approved title information providers before making a purchase.”

Whitney Brewster, TxDMV Executive Director

lorida has increased the identification of cloned veF hicles prior to issuing new titles. Through the use of NMVTIS, they were able to crack a car theft ring responsible for cloning more than 250 cars valued at $8 million.

How does it work?

You will select from a list of private companies authorized as “approved providers” to obtain the title history report. Simply click on the Title Check icon anywhere on the TxDMV website or go directly to www.TxDMV.gov/titlecheck to get to the Title Check page.

Here’s what you do:

lick on the Dealers tab in the middle of the page (all C other businesses, including financial institutions will use the Consumer & Businesses tab).

Shop the approved providers.

Click on a provider’s image to be linked to their website.

19

The same database used by the approved providers is the one the TxDMV will access when title history checks become mandatory in April.

The TxDMV will only provide NMVTIS information to dealers, businesses, and consumers through Title Check on the TxDMV website. Requests for national title information or NMVTIS inquiries will be directed to use Title Check, though we will continue to provide Texas title histories as we have done in the past.

Launching the program

The TxDMV is designing a public education initiative to inform consumers about Title Check/NMVTIS. We will continue to use the slogan “Don’t Buy a Wreck. Do a Title Check.” Title Check falls under our existing Protect your title, Texas campaign, which many dealers know as also helping to get more consumers to use the Vehicle Transfer Notification.

Is there a downside to NMVTIS?

There is no downside for licensed dealers in Texas.

Using an approved provider for title history information before you purchase or sell a vehicle, is totally optional. However, before a Texas title is issued, all title applications will be run through NMVTIS. For most vehicles, there will be no remarks or brands found. But for some, NMVTIS will identify that the vehicle was previously titled in another state where there was a brand applied.

Why

Change Title Check?

For all the value that NMVTIS brings, it will only require the county tax office to capture three new pieces of information from the existing title. The good news is there should be no noticeable increase in the amount of time it takes to process a title transaction. Once the information is captured, it is sent to NMVTIS to do the work.

How can you participate?

There are several ways to participate: 1. Use Title Check to check vehicles you are interested in buying or taking in trade before you make the transaction — this is a protection for you and your business.

2. Use Title Check on vehicles you already own or are looking to sell to ensure they have clear titles.

3. Help educate your customers about the importance of checking a vehicle’s title history before they buy.

4. Consider using Title Check as a sales tool, providing your customers a Title Check on a used vehicle they are looking to purchase.

TxDMV invites you to go to our website and check out Title Check. We are excited to be a full participant in this important nationwide system.

NMVTIS is under the U.S. Department of Justice. TxDMV is required to participate in NMVTIS as part of the Federal Anti Car Theft Act of 1992.

Make sure the used vehicle you want to buy has a clean title.

Don’t get taken for a ride.

It’s a big deal to get a new set of wheels. So don’t let

anyone take you for a ride on your buy. Go to Title Check Many of you may have used the Title Check application on the at www.TxDMV.gov to connect to the national motor TxDMV website in the past and are wondering, “Why change used vehicle you’re eyeing was ever salvaged, rebuilt or Title Check?” Previously, the Title Check application did a flood damaged. It’ll only cost you a couple bucks, but spending a little now can save you a lot in the future.

VIN lookup on title data in the TxDMV’s Registration and Title System database, but it only provided information on the most Find out more at www.TxDMV.gov. recent Texas title records. What was missing from it was prior and out-of-state title information — some of which may have included brands that impacted the value of the vehicles. One of the great benefits of fully implementing NMVTIS in Texas is that Texas citizens, businesses, and vehicle dealers will now have access to title history information that represents the entire history of the vehicle. Brands can be revealed by simply going to Title Check and purchasing a title history report from one of the Department of Justice approved providers. The new Title Check provides access to more complete and better information and will provide much better protection to Texans.

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TIADA Membership Application

2014

Business Name: ____________________________________________ Select one:

Dealer Member

Associate Member

Contact Person: ____________________________________________ Address: __________________________________________________ City: _________________________________________

2014 TIADA Membership Dues:

State: _______

Zip: __________________ County: _____________________________

$425 (Dues include NIADA membership)

E-mail address: _____________________________________________ Phone: _______________________ Fax: ________________________ Dealer P Number: ___________________________________________ Who referred you to TIADA? __________________________________ Mailing Address (if different from above): __________________________________________________________ City: _________________________ State: _______ Zip: ___________

PLEASE INDICATE PAYMENT METHOD: Check or Money Order payable to TIADA Check # __________ Credit Card Card Number: __________________________________________________ Expiration Date: ____________ Monthly Payments - $100 initial payment & $29.50 per month Via Credit Card (Please enter card information above. Authorization Agreement required - contact state office) Via Bank Draft (Authorization Agreement & voided check required - contact state office)

Mail or Fax Application To: TIADA Membership Services, 9951 Anderson Mill Rd., Suite 101, Austin, TX 78750 FAX 512.244.6218

www.txiada.com

512.244.6060

800.442.5944

Dues are not deductible as charitable contributions for income tax purposes but may be deductible as miscellaneous itemized deductions, subject to IRS restrictions. It is estimated that 20 percent of your dues dollars is used for lobbying activities and is therefore not deductible.

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board of directors meeting minutes January 27, 2014 | The Driskill Hotel, Austin, TX

compiled by Texas Dealer staff

At its board meeting on Monday, January 27, 2014, TIADA heard reports and took the following actions: President Michael Thomasson called the meeting to order at 1:40p.m.

Minutes Of Last Meeting

Michael Thomasson presented the minutes of the last Board of Directors Meeting.

A motion was made to accept the minutes.

Moved by Brent Rhodes, seconded by Katherine Tolsch

Treasurer’s Report

Katherine Tolsch presented the Treasurer’s report.

A motion was made to accept the Treasurer’s report.

Moved by Greg Zak, seconded by Trey Crouch

President’s Report

Board member Trey Crouch is sitting on the stakeholder group related to renewing the OCCC license.

TIADA staff member, Jenny Kroening, gave a summary of the plan for an upcoming member survey.

Katherine Tolsch presented the current budget for FY14.

Jeff Martin gave a summary of the current legislative program and plans to date for the 2014 annual conference.

Danny Langfield provided a report on the financial involvement of the associate members of TIADA in FY2013.

Michael Thomasson presented the President’s report where he provided a facility update on the TIADA office. He also provided details of the NIADA Leadership conference he attended in Washington D.C. in early November.

Executive Session

Executive Director’s Report

None

Jeff Martin presented the Executive Director report where he: Introduced a new staff member to the board.

Provided a summary of the Tax Assessor conference held in November 2013.

Described the legislative visits made this fiscal year and the contributions given per visit.

Shared a summary of the NABD conference

Deputy Director Danny Langfield updated the board on the current status of member renewal efforts for 2013.

Danny Langfield provided an update on TIADA’s interactions with TAC, DMV, TDI and OCCC.

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The board recessed to executive session from 3:10p.m. – 4:00p.m.

No actions were taken from executive session.

Old Business New Business None

A motion was made to adjourn the meeting.

Moved by Brent Rhodes, seconded by Katherine Tolsch Meeting adjourned at 5:23p.m.

Respectfully submitted, HL Hensley, 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.

23

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March 2014

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Thank You to Our Current Sponsors

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regulation matters

Location, Location, Location

E

veryone knows the old home-buying adage: What are the three most important considerations in real estate? Location, location, location. And many would argue that the same is true for a dealership.

When the time comes to consider relocating or opening a new store, there are an enormous number of business decisions to be made and factors to consider. I would expect that one would find “notify the regulating agencies” relatively low on that priority list, but notify them you must, if you wish to operate legally. Let’s take a look at what must be done to stay legal with the OCCC and TxDMV.

Office of Consumer Credit Commissioner

If you finance or arrange financing for your customers, you should already hold a Motor Vehicle Sales Finance license from the OCCC. If you are simply moving your current dealership from one location to another, you must complete the “Amendment to a License” (form ADM20, available at occc.state.tx.us) and mail it to the agency along with a $25 amendment fee and your original, current MVSF license. This needs to be filed at least 10 days prior to the actual move date. Unlike the process for TxDMV described below, this process is the same regardless of where in Texas your dealership may be relocating.

If you are actually opening an additional store in addition to your main location, you must complete the “New Registered Office” form (MV-63). Your main location is designated by OCCC as your “Licensed Location,” and each additional store will be considered a “Registered Office.” Along with the MV-63 form you will also need to remit a $455 fee and, if you have a DBA, evidence that the assumed name has been filed with the county clerk’s office or the Texas Secretary of State.

Keep in mind that all MVSF licenses expire every year on July 31, regardless of when they were issued.

Texas Department of Motor Vehicles

When it comes to informing TxDMV of a relocation, there is potential for a bit more complexity. That is because, according to state law, if you are moving to a new address within the same city, you do not need a new license (formally known as a general distinguishing number, or GDN). But if you are moving to a location outside your current city limits, or from an unincorporated area into a city’s limits, you will be required to get a new GDN.

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by Danny

Langfield

TIADA deputy director

The same principle applies if you are opening an additional location. If the new store will be in the same city as your original location, a new GDN will not be required. However, if the new store is in a different city, or an unincorporated area, you will need a new GDN. The easiest way to look at it is this: If you have to cross over a city limit to get from your original location to your new store, you will need a new GDN. If you do not need a new GDN, simply complete the Application to Amend Independent Motor Vehicle Dealer’s License (form LF-021, available at www.txdmv.gov) and send it to the agency along with a $25 amendment fee and a rider from your bond company showing the new location. The agency will need to approve the application before the new location may conduct business. This should be filed at least 10 days prior to the actual move date.

If you do require a new GDN, you will need to complete an Application for GDN (form LF-001) and submit that along with the $700 application fee, photocopy of ID, a new bond, and any required attachments, depending on your organizational structure.

One might well ask — why would city limits matter when the license is being issued by a state agency?

Excellent question. The short (and unsatisfactory) answer is because that’s what the Transportation Code decrees. However, the TIADA Legislative Committee is considering this issue for potential action during the 2015 legislative session. If you want to register your opinion about changing the TxDMV licensing process above (or any other legislative matter), your opportunity will come at the 2014 TIADA Annual Conference & Expo (see pg. 24). At the conference members have the chance to participate in the Legislative Caucuses, where issues are identified and prioritized. Members also have the opportunity to vote on the association’s Legislative Program at the House of Delegates meeting.

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feature FTC Announces Sweep Against 10 Auto Dealers ‘Operation Steer Clear’ Drives Home That Auto Ads Must Be Truthful

T

he Federal Trade Commission recently announced that nine auto dealers agreed to settle deceptive advertising charges, and the agency is taking action against a 10th dealer, in a nationwide sweep focusing on the sale, financing, and leasing of motor vehicles.

According to the complaints, the dealers made a variety of misrepresentations in print, Internet, and video advertisements that violated the FTC Act, falsely leading consumers to believe they could purchase vehicles for low prices, finance vehicles with low monthly payments, and/or make no upfront payment to lease vehicles. One dealer even misrepresented that consumers had won prizes they could collect at the dealership.

“Buying or leasing a car is a big deal, and car ads are an important source of information for serious shoppers,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection.

“Dealers’ ads need to spell out costs and other important terms customers can count on. If they don’t, dealers can count on the FTC to take action.”

‘Operation Steer Clear’ is the latest effort from the FTC to protect consumers in the auto marketplace. The dealerships that settled are charged as follows:

California

Casino Auto Sales of La Puente, Calif., and Rainbow Auto Sales, of South Gate, Calif., allegedly violated the FTC Act by deceptively advertising that consumers could purchase vehicles at specific low prices when, in fact, the price was $5,000 higher. Both dealers’ ads involved a mix of English and Spanish. Honda of Hollywood, Los Angeles, and Norm Reeves Honda of

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Cerritos, Calif., violated the FTC Act by deceptively advertising that consumers could pay $0 up-front to lease a vehicle when, in fact, the advertised amounts excluded substantial fees and other amounts. The ads also allegedly violated the Consumer Leasing Act (CLA) and Regulation M, by failing to disclose certain lease related terms. Norm Reeves Honda’s ads also allegedly violated the Truth in Lending Act (TILA) and Regulation Z, by failing to disclose certain credit related terms.

Texas

Southwest Kia companies, including New World Auto Imports, Dallas, Texas, New World Auto Imports of Rockwall, Rockwall, Texas, and Hampton Two Auto Corporations, Mesquite, Texas, allegedly violated the FTC Act by deceptively advertising that consumers could purchase a vehicle for specific low monthly payments when, in fact, consumers would owe a final balloon payment of over $10,000. The companies also allegedly deceptively advertised that consumers could drive home a vehicle for specific low up-front amounts and low monthly payments when, in fact, the deal was a lease and they would owe substantially more up-front. The ads also allegedly violated the CLA and Regulation M, by failing to disclose certain lease related terms, and the TILA and Regulation Z, by failing to disclose certain credit related terms.

Georgia

Nissan of South Atlanta of Morrow, Ga., allegedly violated the FTC Act by deceptively advertising that consumers could finance a vehicle purchase with low monthly payments when, in fact, the payments were temporary “teasers” after which consumers would owe a different amount. The ads also allegedly violated TILA and Regulation Z, by failing to disclose certain credit related terms.

33

Illinois

Infiniti of Clarendon Hills of Clarendon Hills, Ill., allegedly violated the FTC Act by deceptively advertising that consumers could pay $0 up-front to lease a vehicle when, in fact, the advertised amounts excluded substantial fees and other amounts. The ads also allegedly violated the CLA and Regulation M, by failing to disclose certain lease related terms.

North Carolina

Paramount Kia of Hickory, N.C., allegedly violated the FTC Act by deceptively advertising that consumers could finance a purchase with low monthly payments when, in fact, the payments were temporary “teasers” after which the consumer would owe a much higher amount, by several hundred dollars. The ads also allegedly violated the TILA and Regulation Z, by failing to clearly and conspicuously disclose certain credit related terms.

Michigan

Fowlerville Ford of Fowlerville, Mich., allegedly violated the FTC Act by sending mailers that deceptively claimed consumers had won a sweepstakes prize, when, in fact, they had not. Some of their ads also allegedly violated TILA and Regulation Z, by failing to disclose certain credit related terms.

Final Consent Orders Approved

Following a public comment period announced in September of 2013, the Federal Trade Commission approved final consent orders settling charges that two automotive dealers deceptively advertised the cost or available discounts for their vehicles.

The FTC charged Don White’s Timonium Chrysler Jeep Dodge of Cockeysville, Md., with advertising “dealer discounts” and “internet prices” not available to a typical consumer. Ganley Ford West, Inc., in Cleveland, was charged with misrepresenting that vehicles were available at a specific dealer discount, when in fact the discounts only applied to specific, and more expensive, models of the advertised vehicles.

Under the settlements, both dealers are prohibited from advertising discounts or prices unless the ads clearly disclose any qualifications or restrictions.

The settlements also prohibit the auto dealers from making misrepresentations regarding the existence, price, value coverage, or features of any product or service associated with the motor vehicle purchase, and the number of vehicles available at particular prices.

The Commission vote to approve the final orders was 4-0.

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March 2014

fines& violations 10-1592 ENF Professional Fleet, Inc. DBA Professional Fleet Sales Failure to display buyer’s guide: 16 C.F.R. 455.2, Occ Code 2301.651(a)(4). Failure to remove Texas plates: Transp Code 502.451, 43 TAC 217.41. Misuse of buyer temporary E-tag: Transp Code 503.063, 503.0631 and 503.038(a)(14), 43 TAC 215.151, 215.152, 215.153 and 215.155, Transp Code 503.038(a)(12) and 43 TAC 215.141(a)(10)(11) and Occ Code 2301.651(a)(8). Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). $1,500.00 and attend a Dealer Training Seminar.

11-0120 ENF Grapevine Chrysler Jeep Dodge Inc. DBA Grapevine Chrysler Jeep Dodge Inc. and Grapevine DCJ LLC. DBA Grapevine Dodge Chrysler Jeep Failure to timely transfer title and pay sales tax: Transp Code 501.0234. $500.00.

11-0955 ENF Houston Mac Haik Dodge Chrysler Jeep LTD, DBA Mac Haik Dodge Chrysler Jeep Advertised the amount of down payment in connection with a credit transaction without including the terms of repayment: 43 TAC 215.263. $2,000.00.

11-1424 ENF Pablo Cordova DBA Gigante N Autos Failure to timely file annual Motor Vehicle Inventory Tax statements: Transp Code 503.038(a)(10) and Tax Code 23.122. $250.00.

12-0052 ENF Johnnie Motor Co., Inc. Failure to timely file Motor Vehicle Inventory Declaration reporting sales: Transp Code 503.038(a)(10) and Tax Code 23.121. $250.00.

12-0344 ENF Nabeelco Enterprises, LLC. DBA Houston Direct Auto Failure to comply with a Final Order: Occ Code 2301.651(a)(3). $500.00.

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Final orders for January, 2014. 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.

12-0573 ENF Cosme Hernandez DBA Cosme’s Auto Sales Failure to comply with a Final Order: Occ Code 2301.651(a)(3). $500.00 and attend a Dealer Training Seminar.

12-0603 ENF Texas Credit Cars, Inc. DBA Texas Credit Cars, Inc. Represented a lowest price claim: 43 TAC 215.266(a). $2,000.00.

12-0604 ENF Allen Samuels Katy Dodge, Inc. DBA Allen Samuels Dodge Chrysler Jeep Failure to make dealership records available for inspection: 43 TAC 215.144(a) and 43 TAC 215.141(a)(3). Failure to timely transfer title and pay sales tax: Transp Code 501.0234. $1,000.00.

12-0724 ENF W W House, Inc. DBA Worldwide Homes Sold or offered to sell a motor vehicle at an unlicensed location: Occ Code 2301.362(a), Transp Code 503.021 and 503.027, 43 TAC 215.136. $9,000.00 and attend a Dealer Training Seminar.

12-0731 ENF Chehraz Borhani, DBA Ryan’s Autoplex Failure to meet premises requirement(s): Transp Code 503.032 and 503.038(a) (14); 43 TAC 215.140(1)(B). Sold or offered to sell a motor vehicle at an unlicensed location: Occ Code 2301.362(a), Transp Code 503.021 and 503.027, 43 TAC 215.136. Misrepresentation in an application or other document filed with the agency: Transp Code 503.038(a)(6) and 43 TAC 215.141(a)(19). $2,000.00 and attend a Dealer Training Seminar.

12-0910 ENF GPVN Motors Limited Partnership DBA Texas Nissan of Grapevine Advertisement which made an alluring, but insincere offer to sell a motor vehicle for the advertised price and then switched from the advertised price to a higher selling price: 43 TAC 215.265 and Occ Code 2301.651(a)(3). $2,000.00.

12-1021 ENF Eric Rioja DBA Empire Motorcars Failure to comply with a Final Order: Occ Code 2301.651(a)(3). $250.00.

12-1202 ENF Jorge Alberto Cordova/Jose Martin Cruz/ Reyna Lizeth Yanes, DBA Nino’s Auto Sales #1 Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). $500.00.

12-1204 ENF GPVN Motors Limited Partnership DBA Texas Nissan of Grapevine Failure to issue a disclosure statement in a format approved by the Motor Vehicle Division: Occ Code 2301.610 and 2301.651 (b)(3) and 43 TAC 215.210(4). $500.00.

12-1274 ENF Adesa Texas, Inc. DBA Adesa Austin Aided and abetted or indirectly facilitated the sale of a motor vehicle by allowing the use of GDN: Occ Code 2301.351(2) and Transp Code 503.021. $1,000.00.

12-1319 ENF Duncanville N, LLC DBA Clay Cooley Nissan Misuse of buyer temporary E-tag: Transp Code 503.063, 503.0631 and 503.038(a)(14), 43 TAC 215.151, 215.152, 215.153 and 215.155, Transp Code 503.038(a)(12) and 43 TAC 215.141(a) (10)(11) and Occ Code 2301.651(a)(8).

Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). $500.00.

12-1533 ENF Greig Automotive, Inc. DBA Auto Maxx Failure to timely transfer title and pay sales tax: Transp Code 501.0234. Attend a Dealer Training Seminar.

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fines& violations 12-1677 ENF Hernandez Beltran, LLC DBA MWM Cars Failure to notify of change of address or telephone number: 43 TAC 215.141(a)(6). $500.00.

12-1717 ENF Freshway Autos, Inc. DBA Best Way Autos Sold or offered to sell a motor vehicle at an unlicensed location: Occ Code 2301.362(a), Transp Code 503.021 and 503.027, 43 TAC 215.136. Failure to timely transfer title and pay sales tax: Transp Code 501.0234. $1,500.00 and attend a Dealer Training Seminar.

12-1759 ENF Midway Autos LLC DBA Viva Chevrolet Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). Failure to allow purchaser to select county for registration: Transp Code 501.0234(d),(e). $1,000.00.

12-1803 ENF Expressway Autos LLC DBA Viva Ford Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). Sold a motor vehicle without certificate of title or title receipt: Transp Code 501.152. $1,000.00.

13-0011 ENF Paul H. Beitman DBA Phillip’s RV’s Misuse of buyer temporary E-tag: Transp Code 503.063, 503.0631 and 503.038(a)(14), 43 TAC 215.151, 215.152, 215.153 and 215.155, Transp Code 503.038(a)(12) and 43 TAC 215.141(a) (10)(11) and Occ Code 2301.651(a)(8). $500.00 and attend a Dealer Training Seminar.

13-0020 ENF Apolinar Garcia DBA P & L Auto Sales Misuse of buyer temporary E-tag: Transp Code 503.063, 503.0631 and 503.038(a)(14), 43 TAC 215.151, 215.152, 215.153 and 215.155, Transp Code 503.038(a)(12) and 43 TAC 215.141(a) (10)(11) and Occ Code 2301.651(a) (8). Failure to allow purchaser to select county for registration: Transp Code 501.0234(d),(e). $500.00 and attend a Dealer Training Seminar.

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13-0026 ENF Sahara One, Inc. DBA Delta Autogroup Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). Failure to allow purchaser to select county for registration: Transp Code 501.0234(d),(e). Attend a Dealer Training Seminar.

13-0149 ENF Gateway Autos LLC DBA Gateway Autos LLC Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). Failure to timely transfer title and pay sales tax: Transp Code 501.0234. $500.00 and attend a Dealer Training Seminar.

13-0163 ENF Wilbert R. Escobedo DBA Wilbert Autos Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). Sold a motor vehicle without certificate of title or title receipt: Transp Code 501.152. $500.00 and attend a Dealer Training Seminar.

13-0253 ENF Raymundo Enrique Ramos DBA West Side Cars Failure to have inventory separated from another dealer’s inventories housed at the same physical location: Transp Code 503.032 and 43 TAC 215.140. Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). $250.00.

13-0256 ENF Amin Sardaryzadeh DBA Lone Star Auto Sales Sold a motor vehicle without certificate of title or title receipt: Transp Code 501.152. $250.00.

13-0277 ENF Forest River, Inc. DBA Forest River, Inc. Aided and abetted the unlicensed sale of a motor vehicle: Occ Code 2301.351. $500.00.

13-0392 ENF DG Auto Sales LLC DBA DG Auto Sales LLC Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). Attend a Dealer Training Seminar.

13-0466 ENF Hekmatollah Mohebpour DBA LM Motors Misuse of buyer temporary E-tag:

Transp Code 503.063, 503.0631 and 503.038(a)(14), 43 TAC 215.151, 215.152, 215.153 and 215.155, Transp Code 503.038(a)(12) and 43 TAC 215.141(a)(10)(11) and Occ Code 2301.651(a)(8). $250.00 and attend a Dealer Training Seminar.

13-0515 ENF Gregory Castille Sr. DBA Good To Go Auto Sales Failure to notify of change of address or telephone number: 43 TAC 215.141(a)(6). $250.00 and attend a Dealer Training Seminar.

13-0596 ENF Putnam Darwin Richardson DBA Casual Car Sales Failure to provide written notice of repaired or replaced odometer: Occ Code 2301.651(a)(4). Failure to timely transfer title and pay sales tax: Transp Code 501.0234. $500.00 and attend a Dealer Training Seminar.

13-0649 ENF Cosme Hernandez DBA Cosme’s Auto Sales Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). Failure to timely transfer title and pay sales tax: Transp Code 501.0234. $1,000.00.

13-0802 ENF Alberto Julio Iglesias DBA Coiffure International Failure to timely file Motor Vehicle Inventory Declaration reporting sales: Transp Code 503.038(a)(10) and Tax Code 23.121. $250.00.

13-0819 ENF Jamal Auto Sales, Inc. Failure to timely file Motor Vehicle Inventory Declaration reporting sales: Transp Code 503.038(a)(10) and Tax Code 23.121. $1,000.00.

13-0824 ENF Sergio’s Paint & Body Shop, Inc. DBA Sergio’s Auto Mart Failure to timely file Motor Vehicle Inventory Declaration reporting sales: Transp Code 503.038(a)(10) and Tax Code 23.121. $500.00 and attend a Dealer Training Seminar.

13-0853 ENF Kenneth Cavitt DBA K&J Auto Sales Failure to timely file Motor Vehicle Inventory Declaration reporting sales: Transp Code 503.038(a)(10) and Tax Code 23.121. $250.00.

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fines& violations 13-0861 ENF Alfred Yanez Jr. DBA Al Yanez Motor Co. Failure to display buyer’s guide: 16 C.F.R. 455.2, Occ Code 2301.651(a)(4). Failure to remove Texas plates: Transp Code 502.451, 43 TAC 217.41. Misuse of buyer temporary E-tag: Transp Code 503.063, 503.0631 and 503.038(a)(14), 43 TAC 215.151, 215.152, 215.153 and 215.155, Transp Code 503.038(a)(12) and 43 TAC 215.141(a)(10)(11) and Occ Code 2301.651(a)(8). Failure to make dealership records available for inspection: 43 TAC 215.144(a) and 43 TAC 215.141(a) (3). Filed a false title and tax document: Transp Code 503.038(a)(2). Failure to timely transfer title to out of state purchaser: 43 TAC 215.144(f). $2,500.00 and attend a Dealer Training Seminar.

13-0862 ENF Alfred Yanez Jr. DBA Al Yanez Motor Co. Failure to timely file Motor Vehicle Inventory Declaration reporting sales: Transp Code 503.038(a)(10) and Tax Code 23.121. Failure to timely file monthly Motor Vehicle Inventory Tax statements: Transp Code 503.038(a)(10) and Tax Code 23.122. $500.00.

13-0864 ENF Antonio J. Huerta DBA San Antonio A/C Failure to timely file Motor Vehicle Inventory Declaration reporting sales: Transp Code 503.038(a)(10) and Tax Code 23.121. Failure to timely file annual Motor Vehicle Inventory Tax statements: Transp Code 503.038(a)(10) and Tax Code 23.122. $500.00.

13-0871 ENF Laura Isela Castillon DBA Toro’s Auto Sales Misuse of dealer’s metal plate: Transp Code 503.038(a)(5) and 43 TAC 215.141(a)(10). Sold or offered to sell motor vehicles without the appropriate license for that type of motor vehicle: Transp Code 503.038(a)(14). $500.00 and attend a Dealer Training Seminar.

13-0972 ENF Robert Hernandez, Santiago Martinez DBA Sanford Auto Sales Failure to timely file monthly Motor Vehicle Inventory Tax statements: Transp Code 503.038(a)(10) and Tax Code 23.122. $500.00 and attend a Dealer Training Seminar.

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13-0997 ENF GMZ Innovation Enterprises LLC DBA Express Auto Plex Failure to have dealer or a bona fide employee present during posted business hours: Transp Code 503.032, 503.038(a)(14) and 43 TAC 215.140(1) (B). $500.00.

13-1083 ENF Genesis Autoplex LLC DBA Genesis Autoplex LLC Failure to timely transfer title and pay sales tax: Transp Code 501.0234. $500.00 and attend a Dealer Training Seminar.

13-1000 ENF Victor Trevino DBA Trevino’s Quality Cars Misuse of metal plates: 43 TAC 215.138.

Misuse of temporary dealer tag or failed to comply with recordkeeping requirements: Transp Code 503.062, 503.0626 and 503.068 and 43 TAC 215.151, 215.152, 215.153 and 215.154. Misuse of buyer temporary E-tag: Transp Code 503.063, 503.0631 and 503.038(a)(14), 43 TAC 215.151, 215.152, 215.153 and 215.155, Transp Code 503.038(a)(12) and 43 TAC 215.141(a)(10)(11) and Occ Code 2301.651(a)(8). Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). $500.00 and attend a Dealer Training Seminar.

13-1087 ENF FMD Investments LLC DBA Team Ford Mercury of Navasota Misuse of a temporary tag on a vehicle without a valid certificate of inspection: 37 TAC 3.76(b), Occ Code 2301.651(a)(4), Transp Code 503.038(a)(12) and 43 TAC 215.141(a)(10)(11). Failure to produce records within fifteen (15) days: 43 TAC 215.144(d) and 215.141(a)(3). Defrauded purchaser: Occ Code 2301.651(a)(6). $1,000.00 and attend a Dealer Training Seminar.

13-1056 ENF Juan Adrian Arredondo DBA Auto Mundo Sold or offered to sell motor vehicles on consecutive Saturday and Sunday: Transp Code 728.002. $500.00.

13-1067 ENF Eduardo Martinez DBA Auto Martz Failure to make dealership records available for inspection: 43 TAC 215.144(a) and 43 TAC 215.141(a)(3). Defrauded purchaser: Occ Code 2301.651(a)(6).

Falsified or forged tax or title document: Transp Code 503.038(a)(1). Filed a false title and tax document: Transp Code 503.038(a)(2). $3,500.00.

13-1070 ENF Onesimo Ortiz DBA East Edinburg Auto Sales Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). Failure to timely transfer title and pay sales tax: Transp Code 501.0234. $500.00.

13-1082 ENF Eagle Pass Ford Mercury LTD DBA Ancira Eagle Pass Ford Mercury Failure to produce records within fifteen (15) days: 43 TAC 215.144(d) and 215.141(a)(3). Failure to timely transfer title and pay sales tax: Transp Code 501.0234. Failure to fulfill written agreement with retail purchaser: Occ Code 2301.651(a)(7). $1,500.00 and attend a Dealer Training Seminar.

13-1164 ENF Chreshaun Morrow DBA Xclusive Automotives Misuse of buyer temporary E-tag: Transp Code 503.063, 503.0631 and 503.038(a)(14), 43 TAC 215.151, 215.152, 215.153 and 215.155, Transp Code 503.038(a)(12) and 43 TAC 215.141(a) (10)(11) and Occ Code 2301.651(a)(8).

Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). Filed a false title and tax document: Transp Code 503.038(a) (2). Failure to timely transfer title and pay sales tax: Transp Code 501.0234. $1,500.00 and attend a Dealer Training Seminar.

13-1169 ENF Timothy Lester DBA Worldwide Investments Failure to have dealer or a bona fide employee present during posted business hours: Transp Code 503.032, 503.038(a) (14) and 43 TAC 215.140(1)(B). Failure to answer the telephone, have it answered by a bona fide employee or to have an answering machine or service in operation during posted business hours: Transp Code 503.032, 503.038(a)(14) and 43 TAC 215.140(1)(B). $500.00 and attend a Dealer Training Seminar.

13-1178 ENF McAllen Auto Sales, LLC Failure to observe right of way: 43 TAC 215.140(11)(c). Failure to timely transfer title and pay sales tax: Transp Code 501.0234. $750.00 and attend a Dealer Training Seminar.

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March 2014

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March 2014

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fines& violations 13-1179 ENF Teresa V. Sanchez DBA Terry’s Auto Sales Misuse of buyer temporary E-tag: Transp Code 503.063, 503.0631 and 503.038(a)(14), 43 TAC 215.151, 215.152, 215.153 and 215.155, Transp Code 503.038(a)(12) and 43 TAC 215.141(a) (10)(11) and Occ Code 2301.651(a)(8).

Failure to notify of change of address or telephone number: 43 TAC 215.141(a) (6). Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). Delivered title directly to retail buyer: Transp Code 501.0234, 503.038(a)(14), Tax Code 152.0411 and 43 TAC 215.141(a)(23). Sold or offered to sell a motor vehicle at an unlicensed location: Occ Code 2301.362(a), Transp Code 503.021 and 503.027, 43 TAC 215.136. Failure to timely transfer title and pay sales tax: Transp Code 501.0234. $1,000.00 and attend a Dealer Training Seminar.

13-1186 ENF Weslaco Ford, L.L.P. Misuse of buyer temporary E-tag: Transp Code 503.063, 503.0631 and

503.038(a)(14), 43 TAC 215.151, 215.152, 215.153 and 215.155, Transp Code 503.038(a)(12) and 43 TAC 215.141(a) (10)(11) and Occ Code 2301.651(a) (8). Failure to timely transfer title and pay sales tax: Transp Code 501.0234.

Failure to allow purchaser to select county for registration: Transp Code 501.0234(d),(e). $500.00.

13-1194 ENF Bert Ogden McAllen Motors, Inc. Misuse of buyer temporary E-tag: Transp Code 503.063, 503.0631 and 503.038(a)(14), 43 TAC 215.151, 215.152, 215.153 and 215.155, Transp Code 503.038(a)(12) and 43 TAC 215.141(a) (10)(11) and Occ Code 2301.651(a) (8). Failure to timely transfer title and pay sales tax: Transp Code 501.0234. $500.00.

13-1195 ENF Constantine Roidopoulos DBA Gemini Auto Sales Failure to remain actively engaged in business as a motor vehicle dealer by failing to sell at least five (5) vehicles in a 12 month period: Transp Code 503.038(a)(9) and Tax Code 23.121. $500.00.

13-1214 ENF Fischbone Enterprises, LLC DBA Fisch-Bone Enterprises Defrauded purchaser: Occ Code 2301.651(a)(6). $500.00.

13-1228 ENF Temple Mac Haik Dodge LTD DBA Mac Haik Dodge Chrysler Jeep Participated in a new motor vehicle show without obtaining written approval in a timely manner: Occ Code 2301.358. $1,000.00.

13-1231 ENF Midway Autos LLC DBA Viva Chevrolet Failure to clearly and conspicuously disclose that the advertisement is for the lease of a motor vehicle: 43 TAC 215.260. $1,000.00.

13-1237 ENF Mariana Alejandra Gaona DBA K Imports Failure to maintain complete records by licensed dealer or auction: 43 TAC 215.144(a). $500.00 and attend a Dealer Training Seminar.

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March 2014

legal corner

The Differences Between Strict Foreclosure and Private Sale Dealer Question: What do

the terms “Private Sale” and “Strict Foreclosure” refer to and what are the differences between them?

Answer: Private sale and strict

foreclosure are terms used to describe the two main methods of disposing of repossessed collateral by secured creditors as set forth in the Uniform Commercial Code (the Texas version of the UCC is entitled Texas Business and Commerce Code).

There are significant differences in the procedures necessary to carry them out and in the legal consequences of each method. A car creditor must choose which method to use when disposing of a repossessed vehicle. The UCC also recognizes a “public sale” disposition, but this method is impractical for disposition of individual vehicles and thus won’t be discussed here.

Prior to the mid-1980’s, almost all repossessions were handled as private sales. In a private sale, the collateral is held for a period of time after notice of private sale is sent to the debtor (usually 10 days), then the collateral is resold in a commercially reasonable manner, and the proceeds of sale are applied against the indebtedness. If the proceeds of resale fall short of the amount owed, there is a deficiency, and the creditor can pursue collection of that deficiency.

If, on the other hand, the resale brings in more than the amount owed by the debtor, then there is a surplus, and the creditor must remit this amount to the debtor.

Another way to describe this latter situation is that the debtor has a positive equity position in the collateral and is entitled by law to

In a strict foreclosure, a notice of intent is sent to the debtor, and, if no written objection is received in 20 days, ownership of the collateral reverts back to the creditor.

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receive the surplus amount from the creditor. The creditor in a private sale does not take ownership of the repossessed collateral, but instead has a property right in the collateral that enables the creditor to sell the property and apply the proceeds to the indebtedness owed.

That is, the creditor’s interest in the collateral in a private sale is limited to the indebtedness owed.

Strict foreclosure, which is also known as “acceptance of collateral in satisfaction” is another method of disposition provided for in the Uniform Commercial Code. Strict

by Michael

W. Dunagan

TIADA general counsel

foreclosure started catching up with private sale as the method of choice in the buy-here-pay-here industry in the late ‘80’s and by the early ‘90’s had actually overtaken the private sale as the preferred method by BHPH dealers. Currently, strict foreclosure is by far the predominate method.

In a strict foreclosure, a notice of intent is sent to the debtor, and, if no written objection is received in 20 days, ownership of the collateral reverts back to the creditor. Because the collateral is taken in satisfaction of the indebtedness, there can be no deficiency (and correspondingly, there is no surplus).

The 20-day holding period is statutory and can’t be shortened by the creditor.

The following is a list of the main characteristics and differences between private sale and strict foreclosure. (A much more detailed explanation can be found in Texas Automobile Repossession: A Lien Holder’s Legal Guide, available from TIADA.)

Private Sale:

Holding period is at least 10 days.

Debtor can redeem vehicle at any time before disposition is completed.

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Upcoming Events TIADA Dealer Academy

March 2014 24 Dealer 101: Nobody Told Me That!

Hilton San Antonio Airport 611 N.W. Loop 410 / San Antonio, TX 78216 210.340.6060 Online registration available at www.txiada.com

April 2014 28 Keeping Your Dealership

Legal & Compliant Radisson Hotel Fossil Creek 2540 Meacham Blvd. / Fort Worth, TX 76106 817.625.9911 Online registration available at www.txiada.com

May 2014 12 Dealer 101: Nobody Told Me That!

Crowne Plaza Hotel 12801 Northwest Frwy. / Houston, TX 77040 713.462.9977 Online registration available at www.txiada.com

June 2014 9 Keeping Your Dealership

Legal & Compliant Hilton San Antonio Airport 611 N.W. Loop 410 / San Antonio, TX 78216 210.340.6060 Online registration available at www.txiada.com

Other TIADA Events

April 2014 21 TIADA Board of Directors Meeting

Austin, TX

July 2014 27–30 TIADA Annual

Conference & Expo Hyatt Regency Lost Pines Resort & Spa 575 Hyatt Lost Pines Road Lost Pines, Texas 78612

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Disposition must be “commercially reasonable.”

Disposition can be retail sale, wholesale sale, or sale at wholesale auto auction.

Creditor must apply proceeds of disposition to balance owed and calculate surplus or deficiency.

If surplus occurs, payment of surplus amount must be made to repossessed debtor along with a post-disposition accounting.

Creditor can sue for deficiency and/or report deficiency to credit bureau, if post-disposition accounting is given.

Strict Foreclosure (also known as “Acceptance of Collateral in Satisfaction”):

Balance owed is extinguished. Deficiency no longer exists and can’t be reported to credit reporting service.

Holding period is 20 days from date that notice of intent to accept collateral in satisfaction is sent. A debtor has the right to redeem the collateral upon payment of balance during 20-day holding period.

No accounting to debtor is required.

Collateral ownership reverts to the creditor if 20 days expire without written objection to the strict foreclosure from debtor or guarantor.

If written objection is received in the 20-day holding period, the creditor must use the private sale procedure and make a commercially-reasonable resale.

Strict foreclosure can’t be used if more than 60 per cent of original cash price has been paid in (“60-per-cent rule”). If the 60-per-cent rule applies, the creditor must use a private sale to dispose of the collateral.

This brief summary of the differences between private sale and strict foreclosure isn’t intended to cover all the technical legal requirements for postrepossession procedure. Car creditors should familiarize themselves with and strictly follow the rules.

Notice forms should be obtained only from trusted sources and care should be taken to ensure that the actual procedure used matches the type of disposition for which notice was given.

Michael W. Dunagan is an attorney in Dallas, Texas who has represented the Texas Independent Automobile Dealers Association for over 35 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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March 2014

ATTENTION STUDENTS!!!

$1,000 TIADA

SCHOLARSHIP

SCHOLARSHIP APPLICATION

DEADLINE

May 1, 2014 {Applications and/or any required documents received after May 1, 2014 will NOT be accepted.}

Date: Name:

DOB:

Address:

Criteria and Guidelines 1. Each applicant must be entering or currently enrolled in an accredited college or a trade school. Proof of enrollment must be included with this application.

City:

State:

Zip:

State:

Zip:

Telephone Number: High School Last Attended: Address:

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

City:

3. Each applicant must complete the application form.

Other High Schools Attended (Names and Addresses):

4. Applicant must be in the top 25% of class.

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

5. Provide a detailed description of participation in any academic, honorary, civic or extracurricular activities in college. In addition, a detailed description of high school activities is required from college freshmen along with a college acceptance letter.

6. Compose an essay of no more than two typed, double-spaced 8 ½” x 11” pages. The essay should discuss the applicant’s relationship with their TIADA scholarship sponsor, current education goals and future aspirations as it relates to the applicant’s subject/training area.

7. Provide at least two (but no more than three) letters of recommendation, no older than one year, from college/high school faculty, employers or other appropriate sources (not related).

March 2014

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Dates of Attendance: Date of Graduation:

College(s) you are attending or plan to attend for admission:

Parents Name(s): TIADA Member Name (Sponsor): TIADA Member Company Name: TIADA Member Address: City:

State:

Zip:

Sponsor Signature Should you have any questions, please contact TIADA at 800.442.5944. Please return the completed application with all required documents to: TIADA Attention: Scholarship Applications 9951 Anderson Mill Rd., Suite 101 / Austin, TX / 78750

45

behind the wheel

Martin

Persistence is Rewarded

L

ast month the Texas Lieutenant Governor and the Speaker of the House appointed interim committees to study various issues while the Texas Legislature is out of session. Each committee was given a charge by the leaders of their respective chambers.

The “charge” is to study specific important issues to help guide the legislature’s decisions in the future.

Due to the persistence of TIADA and its members, I am pleased to inform you Speaker Strauss’s Interim Committee Charges included two key issues TIADA worked on during the last legislative session.

1. Study the imposition of mechanics’ liens on automobiles and its impact on mechanics, car owners and purchasers, and lenders.

2. Examine the benefits and drawbacks of prohibiting or restricting the use of “named driver” auto insurance policies.

What does this mean for TIADA members?

Lien issues and named-driver policies rank at the top of the list of TIADA member concerns. Having these issues included in the Interim Charges gives TIADA a meaningful opportunity to educate committee members about the true impact of the issues in an environment less strained than the heated frenzy of a legislative session.

What are the possible outcomes of an interim study?

An interim study can result in a piece of legislation being introduced in the future or the release of a formal committee opinion on the topic. Therefore, it is critical that the committee members have the perspective of independent car dealers in mind when deciding how to act in response to these studies.

What can I do to help?

The TIADA state office will be in touch with members throughout the process to let you know how you

46

by Jeff

tiada executive director

specifically can assist. We may ask you to contact your legislator by sending an email or making a phone call.

We may even ask some members to testify at a hearing. However, the interim is unique in that only the appointed committee members will be involved in the study. Therefore, it is imperative that you stay informed and involved throughout this process if one of the legislators listed below is in your district or is someone with whom you have a relationship. Your independent dealer friends are counting on you.

4 Study the imposition of mechanics’ liens on auto-

mobiles and its impact on mechanics, car owners and purchasers, and lenders.

House Committee on Business and Industry: Rep. Rene Oliveira (Brownsville) Rep. Dwayne Bohac (Houston) Rep. Rob Orr (Burleson) Rep. Eddie Rodriguez (Austin) Rep. Jason Villalba (Dallas) Rep. Armando Walle (Houston) Rep. Paul Workman (Austin)

4 Examine the benefits and drawbacks of prohibiting

or restricting the use of “named driver” auto insurance policies.

House Committee on Insurance: Rep. John T. Smithee (Amarillo) Rep. Craig Eiland (Texas City) Rep. Greg Bonnen (League City) Rep. Brandon Creighton (Conroe) Rep. Geanie W. Morrison (Victoria) Rep. Sergio Munoz Jr. (Mission) Rep. Kenneth Sheets (Dallas) Rep. Van Taylor (Plano) Rep. Chris Turner (Arlington) T e x a s

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March 2014

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