Texas Dealer, November 2014

and Counting!

TIADA Breaks Previous Membership Record

In This Issue: –M ichael W. Dunagan on Seeking Criminal Sanctions for Debtors –C oming Soon: webDEALER for Used Vehicles – Rick Hackett Reveals 8 Secrets for Buy-Here-Pay-Here Dealers – TxDMV on “Two Steps, One Sticker”

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2015 TIADA Board of Directors President Brent Rhodes/Fiesta Motors 5150 Industrial Way Drive Buda, TX 78610 Office: 512.312.2201 Email: brent@fiestamotors.net

Volume XIV

Secretary Kathrine Tolsch/CICO Auto Sales 11050 Harry Hines Blvd.

Dallas, TX 75229 Office: 214.352.9282 Email: cicoauto@verizon.net Treasurer Greg Zak/Dixon Motors 7902 North Freeway Houston, TX 77037 Office: 281.931.1300 Email: gzak@windstream.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) Juan Sabillon/Mi Tierra Auto Sales 7935 Gulf Freeway Houston, TX 77017 Office: 713.644.2446 Email: brentfordct@yahoo.com 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

I s s u e 11

/

N o v e m b e r 2 014

texasDealer

chairman of the board Michael Thomasson/Mike Carlson Motor Company 264 Exchange St. Burleson, TX 76028 Office: 817.366.9578 Email: mthomasson@mcmcauto.com President Elect HL Hensley/Automax of Lubbock 1908 Avenue J Lubbock, Texas 79411 Office: 806.744.3533 Email: hl@gospac.com

/

5 Officers’ Message

contents

by HL Hensley, TIADA President-Elect

8 Board of Directors Meeting Minutes 11 Legal Corner: Seeking Criminal Sanctions for Debtors

by Michael W. Dunagan

12 Local Chapters 14 Upcoming Events 14 2014 Auto Auction Directory & Resource Guide 16 On The Cover: 1378 and Counting! TIADA Breaks Previous Membership Record

by Jenny Kroening

20 TIADA Day at the Auction 2014 Tour 24 Regulation Matters: Cash vs. Credit Pricing: Handle with Care

by Danny Langfield

26

Two Steps, One Sticker

29

hat NHTSA’s Open Safety Recall Database W Means for Dealers

by TxDMV Staff

by Dacia Rivers

33

pportunities for Buy-Here Pay-Here Transparency in O the Online Space Are Looking Up

by Brett Kelly

40

Coming Soon: webDEALER for Used Vehicles

Vice President, South Texas (Region 6) Dan Keetch/Keetch Motors 1010 S. Staples Corpus Christi, TX 78404 Office: 361.882.3541 Email: dankeetch51@yahoo.com

42

ormer CFPB Assistant Director Rick Hackett F ...reveals eight secrets for buy-here pay-here dealers

Vice President At Large Ryan Winkelmann/BJ’s Autohaus 5005 Telephone Road Houston, TX 77087 Office: 713.641.0980 Email: ryan.winkelmann@sbcglobal.net

45 New Members 50 Behind the Wheel

Vice President At Large Trey Crouch/Trey Crouch’s Wheels On Credit 636 E. Business 83 McAllen TX 78501 Office: 956.972.0700 Email: trey@wheelsoncredit.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

by TxDMV Staff

to avoid the regulatory radar

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 access online education from TIADA? Visit www.txiada.com/dealertrainingcenter to learn about course offerings, pricing and registration.

The Editor of the Texas Dealer magazine is Jenny Kroening, Special Projects 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 Join Us at Lobby Day, 2015

T

his just in: TIADA Lobby Day is approaching!

Lobby Day, slated for January 27, 2015, is the specific day members of TIADA gather in Austin to meet with various political leaders to advocate and explain support for legislation relevant to the used car industry. In addition, Lobby Day gives dealers the opportunity to tour the Capitol, attend legislative meetings and interact with other dealers from across the state.

As dealers, our instance of being physically present during this one day is very important to the comprehensive lobbying effort of TIADA. This is our opportunity to build on the work of TIADA staff by developing our own relationships with various legislators.

So what happens at Lobby Day? During the annual conference every summer, we as an organization meet and discuss various issues that are affecting dealerships across the state.

Between the conference and the actual day at the Capitol, TIADA staff drill down into those issues to arrive at the finer talking points to share with Lobby Day attendees so that everyone discusses the same issues in the same way.

On the morning of Lobby Day, we all meet together for a quick breakfast that is highlighted by various political leaders. During our breakfast we discuss the talking points and run through any clarifications necessary. As the time arrives, we are organized into small groups that will remain together throughout the day, and move from breakfast to the Capitol to attend meetings coordinated by TIADA staff.

A quick story: Before I attended my first Lobby Day, I

by HL

Hensley

Automax of Lubbock TIADA president-elect

was apprehensive about the impact a small dealer could have on the tide of legislation on the state level. My first meeting on my first Lobby Day was with a specific leader. This person listened and asked positive, inquisitive questions about our industry and pressing concerns.

Although the leader was exceptionally polite, I left somewhat skeptical that they really “understood” what we were saying. Fast forward a few years to another Lobby Day. I had the opportunity to revisit this same leader. Not only did this person remember us and was glad to see us, but they had actually taken the time to learn a little more about our organization. We built an ally!

Since this time, TIADA has been able to reach out to this leader (and others) because someone from the grassroots level took the time to meet with them and advocate for issues affecting independent dealers. Our political leaders are interested in hearing from us. While our voice may be smaller, we nonetheless have a voice.

It’s important to remember this.

Lobby Day is about doing your part to help the used car segment in Texas. When there is an issue that affects the industry as a whole, every dealer in Texas is represented in the issue. Join us this year and let’s work together to make our businesses better. See you in Austin!

Visit www.txiada.com/2015LobbyDay for registration and event details. Registration for this event is free, but you do need to register to reserve your place.

Our political leaders are interested in hearing from us.

While our voice may be smaller, we nonetheless have a voice. It’s important to remember this.

November 2014

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5

2015 TIADA Lobby Day

at# the Capitol

Monday, January 26 8:00 p.m. - 10:00 p.m. Welcome Reception DoubleTree Suites by Hilton Austin Hotel (15th Street/Lavaca)

Tuesday, January 27 9:00 a.m. - 2:00 p.m. Office visits with Legislators Texas Capitol

Visit www.txiada.com/2015LobbyDay for more information and registration.

board of directors meeting minutes October 6, 2014 | Renaissance Hotel, Austin, TX

compiled by Texas Dealer staff

At its meeting on Monday, October 6, 2014, TIADA took the following actions: President Brent Rhodes called the meeting to order at 1:03 p.m.

iscussed upcoming agency visits D Shared information on upcoming association events Provided an overview of TIADA accounting policies and procedures

Minutes Of Last Meeting

Executive Director’s Report

Treasurer’s Report

Brent Rhodes led a discussion on member retention initiatives.

Brent Rhodes presented the minutes of the last Board of Directors Meeting A motion was made to accept the minutes.

Moved by Dan Keetch, seconded by James Hobson Brent Rhodes presented the Treasurer’s report.

A motion was made to accept the report.

Moved by James Hobson, seconded by Ryan Winkelmann — Passed

President’s Report

Brent Rhodes presented the President’s report where he:

Jeff Martin presented the Executive Director’s report where he: Provided a Legislative update

Jeff Martin and Cristina Rosales-Fowler presented a report and led a discussion on the TIADA conferences.

The budget was presented by Brent Rhodes.

Danny Langfield provided an update on the Business Partner Program and submitted two candidates.

Jenny Kroening provided an update on TIADA professional development initiatives.

Better Business Through Superior Customer Service!

SALE SCHEDULE

Old Business None

New Business

Brent provided committee recommendations and appointed an ad hoc committee to study towing and storage fees.

A motion was made to accept Business Partner candidates, Ituran and AVP. Moved by Kathrine Tolsch, seconded by Juan Sabillon — Passed TIADA staff provided a summary of actions and outcomes related to the strategic plan.

A motion was made to adjourn the meeting.

Moved by Dan Keetch, seconded by Juan Sabillon — Passed.

Meeting adjourned at 5:51p.m.

Respectfully submitted, Greg Zak, 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.

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November 2014

legal corner

Seeking Criminal Sanctions for Debtors

by Michael

I

s there a buy-here pay-here dealer who hasn’t at least once wondered why it is that one slip up could cost him his business, while a debtor can steal, hide, strip, and destroy a vehicle, all the while refusing to pay, and completely avoid any negative repercussions? Car creditors, especially those who do business with the most seriously creditchallenged individuals, often lament the seeming unfairness of it all.

Why can’t we pass a law, I am often asked, that makes it a crime to refuse to return a vehicle upon default, so we can force debtors to live up to their contract obligations? It would also be nice if the law would provide that the police would use their authority to take possession, by force if necessary, of the vehicle and deliver it back to the lienholder.

My first urge is to point out that if collection of debts were that easy — that is, if all risk were removed from the equation — other creditors would jump in, possibly eliminating the market for buy-here pay-here dealers who take chances on people with damaged credit. Certainly, the high risk of the business is what has caused traditional lenders to leave this segment of the credit world to others. Be careful what you wish for.

There is, however, a more serious response to those who ask about the possibility of a criminal law directed at debtors in default. As with many such questions, the answer contains good news and bad news.

First, the good news. There is already on the books a law that just about does all of the above (more on this later). The bad news

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is that it is extremely rare for a law enforcement agency to actually attempt to enforce the law. Being that the statute appears in the Texas Penal Code, it requires the action of a police agency and/or prosecutor to invoke it.

The U.S. and Texas Constitutions contain provisions that prohibit the state, or anyone acting under authority of the state, from taking of life, liberty or property without due process of law. Generally, this means that, for a sworn officer of the law to intervene in a traditional creditor/debtor dispute (such as seizing a vehicle), there must first be notice and opportunity for a hearing before an impartial judicial officer. To do otherwise would be to create liability for the creditor and the officer. (Self-help repossession, on the other hand, doesn’t involve state action, or the action of a government employee, so the due process provisions of the Texas and U.S. Constitutions don’t apply.)

Given the constitutional and emotional restraints that limit what a state can do to turn a debtor into a criminal, the Texas legislature did in fact find a way to try to control outright avoidance of a lien on property. The Texas Penal Code, Section 32.33, provides that any

W. Dunagan

TIADA general counsel

Why can’t we pass a law, I am often asked, that makes it a crime to refuse to return a vehicle upon default, so we can force debtors to live up to their contract obligations? person who has created a security interest or lien on property commits an offense if, “with intent to hinder enforcement of the security interest or lien, destroys, removes, conceals, encumbers, or otherwise harms or reduces the value of the property.” Note that the statute requires more than merely being behind in payments.

This provision of the law can be a powerful tool in seeking enforcement of a lien on property.

However, since enforcement of Penal Code provisions is within the discretion of law enforcement officials, and some law enforcement officials are reluctant to use their resources to assist a creditor, the 11

Local Chapters Victoria Dennis Schroller Victoria Autos Direct 361.578.0530 Dennis@victoriaautosdirect.com Meeting – 1st Monday (Monthly) Fort Worth Jerry Smith HJ Smith Automobiles 817.282.0102 hjsmithauto@yahoo.com Meeting- 4th Thursday of December, February, April, June, August and October Dallas County Kevin Mims VP Auto Sales 972.864.1300 kevinm@vpautosales.com Meetings as needed/TBD 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 Robert Beck Stop N’ Drive Motors 210.432.1101 stopdrive@texas.net Meetings quarterly (dates announced at www.txiada.com) El Paso Ricardo Gardea Cars Plus 915.778.8285 cars_plus@att.net Meeting – 3rd Friday (Monthly) 12

lienholder may meet less than enthusiastic response to his efforts.

Most inquiries to police about violations, for instance, are met with the standard cop cop-out: “It’s a civil matter. Hire an attorney.” This advice is of course of little value given the high cost and time delays of bringing civil litigation.

Another excuse often heard for refusal to prosecute is that the requirement of showing “intent to hinder enforcement of the security interest or lien” is difficult or impossible to prove.

This argument belies the fact that almost all criminal offenses require the proof of some type of intent, and the intent can be inferred by the judge or jury from the surrounding facts. If a car debtor pulls a shotgun on the lienholder or lienholder’s repossession agent at a time when the debtor is behind on his payments, or refuses to tell the lienholder where the vehicle is, it would seem pretty clear that he’s intending to thwart enforcement of the lien. Likewise, the “sale” of secured property by the debtor to a third party without the knowledge of the secured party would appear to reflect the requisite intent.

Also, the statute provides that the necessary intent is presumed if the debtor fails to pay any amount owed when due, and, upon demand of the secured party, failed to deliver possession to the secured party.

In some instances, it may be possible to make a complaint directly to the district attorney. While most criminal prosecutors prefer that the police investigate and write up an offense report, some will take complaints directly. Some of the success stories I’ve heard have come from dealers in smaller towns who may know the county

or district attorney personally.

A lienholder who wishes to initiate criminal action should compile all relevant records including copies of notice letters demanding return of the vehicle, and be willing to testify before the grand jury and at a trial if necessary. A letter should be sent to the debtor by certified

Some dealers have adopted the practice of sending demand letters to debtors citing Section 32.33 and threatening the debtor with arrest and jail time. mail, return receipt requested, demanding return of the vehicle or payment. A copy of this letter and proof of mailing along with the most recent address of the debtor should be shown to the official.

If a car creditor is successful in having a case accepted for prosecution, he or she should cooperate fully with the prosecutor, including testifying at trial if necessary. One possibility is that a prosecutor may enter into a plea bargain agreement with the debtor to grant probation upon condition that the collateral is returned or paid for. The complainant should not, however, agree on his own to cease prosecution in exchange for return of the property without approval of the prosecutor.

Moving a vehicle out of the state without the lienholder’s permission, while the debtor is in default, is a felony if the collateral exceeds $1500 in value. Felonies are extraditable offenses, which means that the state has the power to have the offender arrested and brought back T e x a s

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November 2014

to Texas for prosecution. The creditor must know the debtor’s whereabouts, however, as law enforcement officials will not search for the violator.

Some dealers have adopted the practice of sending demand letters to debtors citing Section 32.33 and threatening the debtor with arrest and jail time. While a reminder of the terms of the law and the ranges of punishment for conviction may be appropriate, there is some question about threatening a debtor with arrest. Texas law forbids creditors from making false threats to debtors. For instance, telling a debtor he will go to jail if he doesn’t return the collateral may be a violation of federal and state collection practices statutes if the creditor knows that he can’t get his local officials to prosecute such cases. Great care must always be taken in making demands that include threats of criminal prosecution. In fact, the Office of

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Consumer Credit Commissioner frowns upon the use of “Hindering Secured Creditor” disclosure forms at closing as being a threat to take criminal action before the debtor is even in default.

What can a lienholder do when his local officials won’t prosecute?

District attorneys and sheriffs are elected officials. They are generally sensitive to what they perceive is the mood of the electorate.

Certainly, the involvement of groups of creditors and lienholders in the political and electoral process is one way to obtain change.

Possibly, something as simple as an invitation for the district attorney or sheriff or police chief to meet with a group of interested business people may be sufficient to bring about a change in attitude.

On an individual basis, a creditor can do as much of the leg work and paper work as possible to make it easier for the prosecutor to take the case.

And, if a case is actually prosecuted, for heaven’s sake cooperate fully with the police or D.A.’s office. If a secured creditor somehow gets his car back, then announces that he won’t testify or cooperate with prosecution, the officials are likely to avoid taking future cases.

To those lienholders who have been able to obtain enforcement of this law, the rewards have been extremely satisfying. To those who can’t convince their officials to apply it, the prospect of watching credit criminals thumb their noses at the law will continue to be a frustrating experience.

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

Upcoming Events TIADA Dealer Academy

November 2014 10 Dealer 101: Nobody Told Me That!

Crowne Plaza Austin 6121 North IH-35 / Austin, TX 78752 512.323.5466 Online registration available at www.txiada.com

19 Better BHPH Financials: How to

Get Organized for Growth DoubleTree by Hilton Hotel Dallas Market Center 2015 Market Center Blvd.

Dallas, TX 75207 214.741.7481 Online registration available at www.txiada.com

20 Better BHPH Financials: How to

* 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

Get Organized for Growth Hilton San Antonio Airport Hotel 611 N.W. Loop 410 San Antonio, TX 78216 210.377.4601 Online registration available at www.txiada.com

* 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

December 2014 8 Keeping Your Dealership Legal &

DALLAS / FT. WORTH METROPLEX

Compliant DoubleTree by Hilton Hotel Dallas Market Center 2015 Market Center Blvd.

Dallas, TX 75207 214.741.7481 Online registration available at www.txiada.com

14

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

* 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 * Use your TIADA VIP Auction card at these participating auctions and get a FREE buy/sell fee (up to $200).

* Alliance Auto Auction of Dallas 9426 Lakefield Blvd. / Dallas / 75220 www.allianceautoauction.com Christopher Dean, General Manager Wednesday: 1 PM * 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 Luke Pidgeon, 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

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 T e x a s

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d i r e c t o r y & r e s o u r c e g u i d e 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

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 AM – GM Sponsored Factory Sale November 2014

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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

15

on the cover

by Jenny Kroening, TIADA Special Projects Director

and Counting!

TIADA Breaks Previous Membership Record

S

eptember 25th started out like any other day at the auction. As part of a membership recruitment effort, TIADA staff and volunteers were at Manheim DFW, one of the stops on the “TIADA Day at the Auction” tour. On an average day, TIADA could expect to recruit about 15 new members at the auction. But this day would end with 38 new TIADA members and the breaking of TIADA’s record membership high.

Ever since the record of 1,356 members was set in 1995, TIADA has been chasing that number. The economic recession that hit in the last decade made reaching new membership marks an elusive goal. But diligence pays off, and by midday on September 25, 2014, TIADA had signed up its 1,357th member.

“We were on FIRE that day!” exclaimed Cristina RosalesFowler, TIADA Meetings and Conferences Coordinator.

“Dealers just kept coming to our table and with Ahmed and Wayne there to close the deal, the memberships rolled in.”

Growing membership is a goal of every association. The more members an association has, the more influence it has with legislators, government agencies and industry decisionmakers. So it’s no surprise that TIADA has put effort into member recruitment. What is surprising is the amount of energy and time TIADA volunteers have contributed this year to make this record-breaking achievement possible.

Wayne Meagher of MD Auto Sales in Grand Prairie has been TIADA’s top recruiter for several years running.

He assisted TIADA at six different auction visits in 2014 and has recruited an astounding 80 members so far this year. When asked why he donates his time to help recruit, he replied, “I fully adhere to the premise that a strong

16

Wayne Meagher, waiting patiently while a prospective member thinks it over at America’s Auto Auction in Dallas.

business organization is beneficial to me as a dealer and projects a professional and honest image of our industry, both to legislators and regulators as well as the public.

TIADA saves my business money, keeps my entity viable, and contributes to my bottom line.”

Wayne isn’t the only one who has helped recruit members this year. As you can see in the results of the top recruiter contest on page 18, Mark Brown, Ahmed Belmeshkan and Michael Zak also volunteered their time, recruiting a total of 108 new members for the association.

“When you get to talk to others about your business, industry, and passion — that’s a good day and worth thanking the Lord Almighty for the blessings,“ says Zak. A significant factor in TIADA’s growth can be attributed to the success of the auction tour (see page 20 for details).

TIADA Administrative Assistant, Aimee Frei-Miller T e x a s

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“I am thrilled beyond words to see TIADA climb this membership ladder. You are the future of the small business person. GO TEAM, GO!” Janette Winkelmann, TIADA Past President

“It’s a no-brainer!” is the sentiment Michael Zak was sharing with prospects at Manheim TX Hobby.

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says, “It’s pretty easy to explain the value of a TIADA membership to a dealer who has the chance to save $200 on the spot by using our VIP auction card.”

With three months left to recruit, the final membership number for 2014 is still being tallied. At press time, TIADA had 1,378 members. Could breaking the 1,400 mark be on the horizon?

“I had the sincere privilege of serving on the board of TIADA back when the original record of 1,356 members was set,” remarked Janette Winkelmann, TIADA Past President.

“Even today, as president of a different non-profit, I can’t get the smile off my face when I think of those times and the TEAM we had. It’s obvious that TIADA still has an amazing team! I am thrilled beyond words to see TIADA climb this membership ladder. You are the future of the small business person. GO TEAM, GO!”

17

Congratulations

TOP RECRUITERS! Congratulations and thanks go to the TIADA top recruiters who each recruited 20 or more new members in the last year, earning them a trip to Las Vegas for the 2015 NIADA Convention. The trip includes airfare, hotel stay for four nights at Caesar’s Palace, all meals and complete event registration.

r e h g a e M e n

y a W

s, ale S o e Aut Prairi D M and Gr

Wayne Meagher will receive his second NIADA Crystal Eagle Award at the 2015 NIADA conference for recruiting 100 members in a two-year period. In fact, Wayne recruited 150 members over the last two years.

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New Members!

Way to go, Wayne!

Mark Brown

Michael Zak

Ahmed Belmeshkan

Red Carpet Auto Sales Seguin

Dixon Motors Houston

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42 New Members

35 New Members

Thanks also go to...

31 New Members

Sonny Paredez - Discount Auto Center, San Antonio, 3 new members Byron Riley - Texas Auto Solutions, Houston, 2 new members

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feature compiled by TIADA Staff

TIADA Day at the Auction The

1

2014

Tour

The TIADA booth made 13 stops at 10 different auctions during this year’s tour for a grand total of 222 new members! Special thanks to these auctions for their suppor t!

April 8 . . . . . . . . . . . . . . . . . Greater Tyler Auto Auction April 16 . . . . . . . . . . . . . . . . . . . . Manheim San Antonio April 23 . . . . . . . . . . . . . . . . . . . . . . . . Manheim Dallas April 23 . . . . . . . . . . . . . . . . . . . . . . . Alliance AA Dallas April 24 . . . . . . . . . . . . . . . . . . . . . . . . . . Manheim DFW May 6 . . . . . . . . . . . . . . . . . . . . . . . . America’s AA Buda Aug 21 . . . . . . . . . . . . . . . . . . . . . . . ADESA San Antonio Aug 28 . . . . . . . . . . . . . . . . . . . . . . . Manheim TX Hobby Sept 10 . . . . . . . . . . . . . . . . . . . . Manheim San Antonio Sept 23 . . . . . . . . . . . . . . . . . . . . . America’s AA Dallas Sept 24 . . . . . . . . . . . . . . . . . . . . . . . . Manheim Dallas Sept 25 . . . . . . . . . . . . . . . . . . . . . . . . . . Manheim DFW Sept 30 . . . . . . . . . . . . . . . . . . . . . . . Manheim Houston

2

1 – In the lanes at America’s Auto Auction in Dallas.

2–M ichael Zak describes the benefits of the VIP card to 2 potential members.

3–F rom left, Jeff Bronstad of Manheim San Antonio, TIADA Past President Mark Brown, Sonny Ritchie and Marcus Purdle of Manheim San Antonio.

We enjoyed hosting the day to support the association and all of the great work they do for all of us in the industry. It created a good buzz and much dealer interest on the day resulting in many new members.

3

Rich Curtis, General Manager, Manheim Texas Hobby

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4–M ichael Zak at Manheim Houston getting a chuckle out of a dealer by showing him the prorated dues amount.

5 – Th e thought of you NOT joining is laughable!

Being able to provide members a tangible benefit like the auction VIP card is a huge part of our recruitment success this year. A sincere thank you goes out to our auction partners who participated in the VIP card program and hosted us during the auction tour this year. Their continued support of TIADA helps strengthen the auto industry in Texas.

5

Jeff Martin, TIADA Executive Director

We love to host TIADA Day at the Auction because it gives our local dealers a chance to learn all the great things TIADA has to offer when they might have never known about the association otherwise.

Eddie Pope, General Manager, Manheim Houston

6

7 6–A hmed Belmeshkan, making a point of explaining member benefits to a prospective member at Manheim DFW. 7–T IADA staff member Aimee FreiMiller talking math with a dealer at Manheim DFW. 8–A hmed Belmeshkan of New Rio Grande Motors, gets the membership paperwork started for a member recruit at Manheim Dallas.

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9–W ayne Meagher with Manheim DFW GM Nicole Graham-Ponce 21

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regulation matters

Cash vs. Credit Pricing: Handle with Care

by Danny

R

ick Hackett, partner at the law firm Hudson Cook and a former assistant director of the CFBP, recently provided some recommendations for our industry aimed at minimizing the exposure dealers have to a possible enforcement action from the CFPB (see pg. 40).

One of Mr. Hackett’s suggestions, found below, has caused a bit of a stir among some TIADA members and resulted in a few phone calls and email queries to our office.

“If a car buyer is paying cash, never sell (or even offer to sell) a vehicle for a lower price than what you charge when the customer finances. If the financed price is higher, regulators may conclude you added an undisclosed finance charge. You may also be in violation of usury laws.”

Of course, cash discounts have long been a staple of buyer/seller negotiations in many arenas where financing is an option. For example: Catherine Consumer comes into Billy’s Roll Today Motors and wants to buy a car Billy has advertised for $12,995. “Tell you what,” says Catherine, “I’ll give you $10,500 cash out the door right now, TT&L, everything included. Deal?”

Billy replies, “Hey, hey, what do ya say, looks like you’re going to Roll Today!”

“I will take that as a ‘yes,’” Catherine answers.

So, does Billy have a problem? In the fact pattern described above, he probably does not, actually. As long as the sale proceeds as planned, buyer and seller have bartered and arrived at a mutually agreeable price, and the deal is done.

Where a dealer can run into a problem is if the $10,500 price applies only if the consumer pays cash, and is, in fact, dependent upon the consumer paying cash. For example: Catherine Consumer comes into Billy’s Roll Today Motors and wants to buy a car Billy has advertised for $12,995. “Tell you what,” says Catherine, “I’ll give you $10,500 cash out the door right now, TT&L, everything included. Deal?”

Billy replies, “$10,500 cash? Yes ma’am, you got yourself a deal! Let’s get started on the paperwork…”

Catherine reaches for her pocketbook and realizes all her cash has been stolen.

“Dang,” says Catherine. “I can’t pay cash after all. Will you finance me on this deal?”

“Sure,” says Billy. “But I gotta have $12,995 in that case.”

24

Langfield

TIADA deputy director

“The federal Truth-inLending Act strictly governs the way finance charges must be disclosed to the consumer.”

“You sure about that?” says Catherine.

“Yes ma’am, to finance this vehicle I’m sorry but the price is $12,995.”

Now Billy probably does have a problem. The problem is that a federal regulator may take the position that the difference between the $10,500 cash price and the $12,995 finance price (+$2,495) is actually a finance charge which must be properly disclosed as a finance charge.

Not a huge deal, you might be thinking. Maybe Billy could just add the $2,495 as a line item on the contract?

That would be a definite no-no. The federal Truth-inLending Act strictly governs the way finance charges must be disclosed to the consumer. The accompanying rules, collectively known as Regulation Z, spell out the specific terms and information that must be disclosed. (When incorporated into the retail installment contract, Reg Z disclosures are grouped together and referred to as the “fed box.”) As a result, calculating and accurately disclosing the additional $2,495 in conjunction with the other contractual finance charges would be extremely difficult, if not impossible, to do.

In summary, while a dealer certainly has a right to enter negotiations which may lower the sales price of a vehicle, a dealer should keep in mind that s/he is then effectively bound by the new price established after negotiation, regardless of whether the final purchase ends up being cash or financed.

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feature Two Steps, One Sticker

by TxDMV Staff

T

he State of Texas will stop issuing inspection stickers and transition to “Two Steps, One Sticker” next year. Beginning March 1, 2015, vehicles will no longer be issued an inspection sticker, and the registration sticker will serve as proof of inspection and registration. In order to keep the dates aligned, the following year motorists will have a convenient 90 day window to complete both their inspection and registration.

There are two general steps for dealers under “Two Steps, One Sticker”, which are not a significant departure from their current practices. The first step is inspection. Dealers are still required to ensure vehicles have a current inspection. Once a vehicle has been inspected, the results will be entered into the state’s inspection database. The second step is registration. When a dealer submits the buyer’s title and registration documentation to the county, the vehicle’s inspection status will be electronically verified and the buyer will be issued a registration sticker to serve as proof of inspection and registration. The date on the registration sticker is now the expiration date for both inspection and registration.

The First Year

Transitioning to “Two Steps, One Sticker” requires every vehicle’s inspection and registration dates to expire at the same time. In order to do this, during the first year, all motorists will be allowed

to renew their vehicle registration if the vehicle has a current, passing inspection the day they renew. A similar exception will be granted to dealers during the first year.

From March 1, 2015 to February 29, 2016, all vehicles with a current, passing inspection on the date of sale can be titled and registered without obtaining a new inspection. Essentially, there is no change for the dealer community during the first year of “Two Steps, One Sticker”. The second year is when dealers will experience a change, but only in terms of used vehicle sales. “Two Steps, One Sticker” does not change the title and registration process for new vehicle sales. All that is required to register a new vehicle on behalf of a buyer is proof of current, passing inspection.

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Extra Time on Used Vehicle Sales

Used vehicles are also required to have a current, passing inspection for purposes of initial registration.

However, unlike new vehicles, starting March 1, 2016, it will matter when that inspection occurred. Under “Two Steps, One Sticker” used vehicles which have a current, passing inspection may be sold without obtaining a new inspection, if the inspection occurred within 180 days of the date of sale. If, on the date of sale, it has been more than 180 days since the vehicle was last inspected, the vehicle must be inspected before registration and title paperwork is submitted to the county tax assessor-collector’s office.

Prior to March 1, 2015, a tool will be made available on www.TwoStepsOneSticker.com, which will allow dealers to check the date of last inspection. Dealers will simply enter the VIN into the look-up tool and it will return valuable information about the type of inspection performed, the date of last inspection, and any associated fees.

Test on Resale

“Two Steps, One Sticker” does not change requirements related to emissions test on resale. If a vehicle is being registered in an emissions county and previously received a safety-only inspection, an emissions test

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must be performed prior to registration. The vehicle inspection report (VIR) will continue to serve as proof to the county that a vehicle has passed an emissions test in the county in which it is to be registered. It is important to keep in mind that model year 1996 and newer used vehicles with 50,000 or more miles that are sold in emissions counties must have passed an inspection within 90 days of the title transfer.

Fee Collection

On March 1, 2015, vehicle inspection stations will no longer be responsible for collecting the state’s portion of the inspection fee. Instead, for vehicles inspected on or after March 1, 2015, the state’s portion of the fee will be collected by the county tax assessor-collector’s office at the time of registration.

Learn More

If you haven’t already done so, you are encouraged to check out www.twostepsonesticker.com. Here you will find additional valuable information on how “Two Steps, One Sticker” will impact your dealership. It’s important to familiarize yourself with the new program now because before you know it, it’ll be time to kick up your heels and do the new Texas Two Step and TxDMV wants to ensure that you are ready.

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feature What NHTSA’s Open Safety Recall Database Means for Dealers

by Dacia Rivers Freelance Writer

T

hanks to a new database compiled by the National Highway Traffic Safety Administration (NHTSA), dealers can now quickly and easily search for open safety recalls on used inventory.

By simply entering a VIN into the database on the NHTSA website, you can instantly see if a vehicle has any outstanding, unperformed safety recalls. In the past, recall information was released based on certain makes and models of cars, but recall information wasn’t readily searchable by VIN, making detailed information on a specific vehicle difficult to find.

This new database marks the first time outstanding safety recall information has been available all in one place.

“Getting this information wasn’t that easy prior to this,” says Mike Williams, VP of Direct Sales at Black Book. “For dealers, this is actually useful and it’s something that we’re looking into integrating into our mobile products, just as another checkpoint on a vehicle.”

Williams believes the database could result in big changes at dealerships.

“You may start to see dealers start to leverage this to their advantage, the same way you’d post a, ‘Clean Carfax,’ and things like that,” says Williams. “I think you’ll start to see guys advertising ‘No open recalls.’’’

In the past, there hasn’t been a responsibility for a dealership to research open recalls on used inventory and disclose these notices to their customers. But it’s possible this database will have an effect on dealers’ responsibility.

Michael Dunagan, TIADA general counsel agrees.

“The safest practice for a dealer would be to pull a recall report on each vehicle sold and pass the information on to the buyer,” Dunagan suggests.

The potential for lawsuits is always something for dealers to consider, and Dunagan recommends sticking to the best practices to avoid potential litigation.

“While we don’t know at this stage whether the existence of a central repository for recall information will give rise to some type of legal duty for used car dealers to research every vehicle, there will probably be litigation over the issue, especially if someone is injured as a

Best Practices

“There’s no specific law that would prohibit a dealer from selling a used vehicle that has an open recall,” says NIADA Counsel Shaun Petersen. But that doesn’t mean doing so is what he’d recommend.

“From a best practices standpoint, what we have always recommended is that dealers use this tool to find out if there is an open recall, and if there is an open recall, to disclose that to the consumer or to take it and have it fixed,” Petersen says.

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The actual recall results above are for a specific 2006 Acura MDX. The query was run on October 10, 2014 and shows one incomplete safety recall.

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result of an unrepaired safety issue that wasn’t disclosed at the time of sale,” Dunagan cautions.

In some instances, the database will show that a car has an open safety recall for which a fix is not yet available. In that case, Petersen urges disclosure.

“At a minimum, it would be a good idea for dealers to disclose to the consumer that the vehicle has a recall, what the recall is, and the fact that there is no fix available,” Petersen says.

Business As Usual

In the end, the new database will make things easier for dealers.

For some folks, this new database doesn’t necessarily equal a huge change in day-to-day business.

“Carfax has been working with manufacturers for years to get more of their open recalled cars in to get fixed,” says Carfax PR Manager Chris Basso. “We started doing that by providing the recall information reported to us by manufacturers in Carfax reports, and we’ve been doing that for years.”

When running Carfax reports or using the My Carfax app, dealers are able see if a car has outstanding unperformed recalls. Basso says Carfax’s end goal is seeing more open recalls get closed.

30

“We’ve been focused on helping our dealer customers get the information they need, especially the independent dealers who don’t have direct access to OEM recall information, and making it available through the Carfax report and other products that the dealers can sign up the customer for, like the My Carfax app, with the ultimate goal of helping the manufacturers get more of their recalled cars in to get fixed,” Basso says.

In the end, the new database will make things easier for dealers.

“The main benefit of the new database for dealers is the presence for the first time of a central source of information that doesn’t require searches of multiple sources for recall information,” Dunagan says.

The NHTSA database includes all major light vehicle brands along with several motorcycle manufacturers.

However, it won’t show you the recalls that have been completed on an automobile. The database does not include information on non-safety recalls or recalls that are more than 15 years old.

You can visit the database online at http://vinrcl.safercar.gov/vin.

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feature Opportunities for Buy-Here Pay-Here Transparency in the Online Space Are Looking Up

by Brett Kelly, director, Buy-Here Pay-Here Center and Independent Dealer Business, AutoTrader.com

T

ransparency is the buzzword in the automotive industry in 2014, but it is typically not associated with the Buy-Here Pay-Here industry. The trend toward a more transparent business model is still controversial even in the franchise space, but there will be a tipping point. This trend will ultimately carry over to the Buy-Here Pay-Here model, so it’s important for BHPH dealers to be mindful of what customers expect out of the shopping process. Many BHPH dealers would prefer to be transparent with their customers, but they have a hard time conveying this message in their advertising when competing alongside the traditional dealership model that offers incentives, low down payments or low interest rates.

What exactly does transparency mean?

Transparency implies openness, communication and accountability. Transparency is operating in such a way that it is easy for customers to see and understand how decisions are made. It also means staying compliant. Required down payments and/or estimated monthly payments, length of the term, actual inventory, warranties and service factor (if applicable) are components of transparent communications and business operations. Even advertising environments like AutoTrader’s new Buy-Here Pay-Here Center (buyherepayhere.autotrader.com) rely on a dealer’s willingness to be transparent.

Transparency, though, is a two-way concept that works for dealers, too. So while a BHPH shopper has more access and insight into a dealership, the dealer has just as much information about the customer when they submit an online credit app. Accordingly, this two-way communication provides a huge opportunity to connect with more customers.

Buy-Here Pay-Here and credit-challenged shoppers, though, use the Internet just as much as traditional car shoppers. Our studies indicate there are few differences between traditional shoppers and BHPH shoppers in terms of computer and mobile device ownership; therefore, it is safe to assume they expect a similar experience.

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Transitioning toward a transparent model that connects with the BHPH segment

Typically, these shoppers do not have a reliable, easy way to find dealers who can meet their needs. That’s because BHPH consumers don’t shop for a car like traditional shoppers. Their needs are different, so their focus is different. For this segment, the top priorities are financing and finding a local dealer that can fulfill their need for financing approval.

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ducate consumers and set proper E expectations for purchase Nearly two out of three BHPH customers enter the vehicle shopping process with securing financing and/ or identifying a dealer as their first priority. So it’s important to align advertising messages with the shopping priorities of this customer base.

Tips for building an effective online presence:

1. Focus on features for your website and any third-party site where your cars are listed Approval messages – Since approval is BHPH shoppers’ top concern, messages about financing approval should take precedence in all advertising — both online and offline.

Speed of process – Many BHPH shoppers are interested in finding a dealer who can handle the vehicle purchase process quickly. The good news is that 83% of BHPH dealers complete the car buying process in 2 hours or less. This is an important message to include in advertising. For example, “Get Your Car in Less Than 2 Hours!”

D own payments and payments Access to credit apps

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nline payment capabilities O Information about what’s needed for approval, including list of required documents for financing Consider reporting customer payments to credit bureaus — Only 37% of BHPH customers’ payments appear on their credit report; however, 63% of BHPH customers would like their payments reported. As a result, consider using messages like, “We Can Help You Rebuild Your Credit.” Just be sure that if you advertise this message follow through on it. Vet this message with your legal counsel, too.

Inventory – Most BHPH consumers live within 40 miles of a dealership. Be sure they can view all of the inventory they’re qualified for and that you provide vehicle specs, too.

L anguage options Contact information 2. Merchandise your dealership online Align messages with customers’ priorities.

Clear descriptions and comment plus photos and video Customer testimonials Tout experience FAQ section

S howcase special dealership features Link to map and driving directions Use signage on the lot to promote financing, quick approvals and vehicle availability. Include your web address on all signage and other forms of communication.

3. Get involved in social media According to a Pew Internet study, two-thirds of adults who use the Internet use social networking sites.

In fact, only email and search engines such as Google and Yahoo are used more frequently. Social media, especially sites like Facebook, provide huge opportunities to reach and connect with shoppers.

4. Manage your online reputation Because content is consumer-generated, customers often turn to these sites for opinions and reviews of other shoppers’ experiences with a dealership. Monitor Google Places, Dealer Rater, Yahoo, Yelp, Kudzu, CitySearch, YouTube and Facebook. Respond to all comments, attempt to resolve negative reviews and don’t write fake reviews.

Transparency, loyalty and compliance are the key pain points for dealers. BHPH dealers who are lined up with customers’ needs and expectations increase their potential to improve sales, profits and customer loyalty.

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Thursday, November 20, 2014

Dallas, Texas

San Antonio, Texas

DoubleTree by Hilton Dallas Market Center 2015 Market Center Blvd. | Dallas, TX 75207 | 214.741.7481

Hilton San Antonio Airport Hotel 611 N.W. Loop 410 | San Antonio, TX 78216 | 210.377.4601

$99 TIADA Members, $199 Non-members (includes up to 3 attendees per dealership) Sponsored by:

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Sponsored by:

Register online at www.txiada.com or by phone at 800.442.5944.

www.cliftonlarsonallen.com

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Texas Independent Automobile Dealers Association

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BUY ONLINE AT

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

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TIADA Membership Application

2014

Business Name: ____________________________________________ Select one:

Dealer Member

Associate Member

Contact Person: ____________________________________________ Address: __________________________________________________

2014 TIADA Membership Dues:

City: _________________________________________ State: _______

Join Date:

Dues:

Zip: __________________ County: _____________________________

Jan. / Feb. / Mar.

$425

Apr. / May / Jun.

$320

Jul. / Aug. / Sep.

$215

Oct. / Nov. / Dec.

$425

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

(includes all of 2015) (all dues include NIADA membership)

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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November 2014

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feature Coming Soon: webDEALER for Used Vehicles

by TxDMV staff

Texas dealers have been busy! Over 500,000 more titles were issued statewide in fiscal year 2014 compared to fiscal year 2013, an increase of about 7.28 percent according to TxDMV records. Fortunately, the TxDMV webDEALER system makes titling faster and easier than ever. Using the built-in, step-by-step application process, dealers can reduce errors that delay processing and submit forms online for quicker turnaround. webDEALER is helping dealers set new standards for how business gets done in Texas, and by early 2015, dealers who sell used vehicles can take advantage of the many benefits webDEALER offers.

Faster, More Convenient Processing

Processing applications online reduces paperwork, eliminates postage costs, and speeds up transactions.

Dealers are able to easily upload the 130-U and submit vehicle information directly to the county at any time, 24/7. Most importantly, the webDEALER step-by-step application process reduces the likelihood of errors.

A selected group of independent dealers is scheduled to begin using webDEALER this November. TxDMV’s goal is to collect feedback and make improvements before expanding system availability early next year. By January 2015, all dealers who sell used vehicles can check the Dealer page on TxDMV.gov to see if their county is actively utilizing webDEALER. Active counties can be contacted for help with system setup and access.

TxDMV is continuing to assist and train counties that have expressed an interest in using the system. Once counties have received training and are ready to bring dealers onto the webDEALER system, they will be added to the active county list.

For more information about webDEALER, go to the Dealer page on TxDMV.gov. Click the webDEALER tab in the middle of the page for important updates, resources, and the active county list.

Easier Tracking

Viewing transactions in webDEALER enables dealers to track all process steps. Title applications can be monitored as they move from the dealership, to the county, and on to TxDMV. If a transaction is declined, dealers can view the information explaining why and take corrective action.

Better Fraud Prevention

Checking vehicle titles in webDEALER can help resolve errors and prevent fraud. webDEALER enables the dealer to verify that surrendered titles match current Texas records prior to submission.

Improved Fee Calculation

Utilizing webDEALER’s fee calculator takes the guesswork out of determining tax and fee amounts and ensures greater accuracy.

Simplified Specialty Plate Transfer

Transferring specialty plates is easier since fees are provided in the webDEALER system. Dealers no longer need to contact their local tax office for fee information and can complete the transfer process onsite, at the time of sale. This convenience saves dealers, customers, and tax offices time.

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November 2014

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feature Former CFPB Assistant Director Rick Hackett reveals eight secrets for buy-here pay-here dealers to avoid the regulatory radar

R

ick Hackett, former Consumer Financial Protection Bureau assistant director and current partner at Hudson Cook, delivered a keynote on the automotive and buy-here pay-here industries at AutoStar Solutions’ 7th annual Innovate conference held in September in Grapevine, Texas.

“As the CFPB and its allies in state attorney general offices turn increasing focus to ‘high-priced’ credit for nonprime consumers, it’s important for dealers of all types — and especially for independent dealers with buy-here pay-here operations — to proactively plan for outreach from regulators,” said Hackett.

“It’s hard enough as it is to run a nonprime credit dealership, with wholesale inventory prices inflated and consumer incomes stagnant,” Hackett said. “Now federal regulators and state attorneys general have decided they have the power to declare when a seller’s price is ‘inflated to hide the true cost of credit provided.’ The result is an automatic truthin-lending violation and a claim of unfair and deceptive practices.”

Hackett said that no surefire way exists for dealers to completely protect themselves from a regulator who can decide what a reasonable price is. But he recommends these steps to minimize exposure: 1. I f a car buyer is paying cash, never sell (or even offer to sell) a vehicle for a lower price than what you charge when the customer finances. If the financed price is higher, regulators may conclude you added an undisclosed finance charge. You may also be in violation of usury laws.

2. Get your house in order when it comes to technical disclosures. This

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includes the Truth in Lending Act, adverse action notices, as well as compliance with privacy laws and Article 9 of the Uniform Commercial Code.

3. Train your F&I managers, just like you train your mechanics. The world of F&I has become incredibly complicated, so mere hope is not a viable strategy. You must invest in education and training — and be able to demonstrate to regulators that you’ve done so.

4. Underwrite for the borrower’s ability to pay, rather than focusing solely on the collateral value. You’ll prevent accusations of predatory lending while still protecting your financial interests.

5. Treat your complaints as a resource, and remember they can come back to bite you. Do you receive multiple complaints about the same salesperson? Have your collectors been accused more than once of the same illegal practice? Take note of the trend — and fix it — before the regulators do it for you.

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6. Work with troubled borrowers, and try your best to keep them in their cars. Premature repossession only reinforces the appearance of predatory lending.

7. Proactively manage your repo agents and all other vendors. Do you know whether your repo agent has been sued, has any judgments against him, or is the subject of BBB complaints? Has he been trained by a recognized recovery compliance organization? Is your cleaning service bonded and insured? Do they conduct thorough background checks? If you outsource collections, does the agency adhere to all applicable laws, have all necessary licenses, and receive adequate training? Are your vendors’ procedures similar to your own? It may seem overwhelming, but regulators hold dealerships responsible for who they do business with.

8. Approach ancillary products carefully. Don’t sell the customer options they can’t afford. And make it clear that these items are truly optional. If every buyer leaves your lot with the same aftermarket products, regulators may conclude that you require them for financing.

November 2014

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Cipg insurance issued by

Vehicular Service insurance Company, RRg* insured/Reinsured

Limited Warranty program (LW) ceded for Thirteen Dollars

($13) per LW

insured/Reinsured

Vehicle Service Contract program (VSC)

ceded for Sixty Nine Dollars

($69) per VSC

Bhph/Lhph “pay-As-You-go” programs Available This reduced fee program is for 100% internet transactions only. please visit

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*Texas Department of insurance License # 13764570

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e-Tag Supplies —

In Stock for Immediate Shipment!

MOTO

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ETAIL

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SALES

REDITOR SELLER/C : ADDRESS ZIP: CITY, ST,

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316 bpc #24-4

Please Welcome Our Newest TIADA Members Auto Web Expo, Inc Morrison Hassan Rahmanian 11106 Morrison Ln Dallas, TX 75229

Dealer Members

A & J Motors, LLC Larry Cumba 1307 Main St Grand Prairie, TX 75050

Baytown Auto Park Adnan Kowni 8621 Richmond Ave Houston, TX 77063

Accelerate Motorsports Zafar Khan 11311 Harry Hines Blvd, Ste 511 Dallas, TX 75229

BDI Auto Group Adrian Fields 10859A Ed Hardin Ln Terrell, TX 75161

Ace Automotive Nadeem Ghazali 14089 Bellaire Blvd #C Houston, TX 77083

Bengal Auto Sales Rawshanu Khan 770 East Irving Blvd Irving, TX 75060

AJ’s Auto Sales Priscilla Elizondo PO Box 2822 Elsa, TX 78543

Best Car Auto Service 2 Mustafa Taksh 10220 Marry Hines Dallas, TX 75235

Al King Tire & Auto Service Ahmad Al Jafari 2825 N Hwy 360 Grand Prairie, TX 75050

Brogs Auto Francis Reyes 2475 South Well Rd Dallas, TX 75229

Al’s Auto Sales LLC Greg Rhines 2721 Cedar Springs Ct Bedford, TX 76021

C & N Auto Group Paul Noumir 213 Lavon Dr Garland, TX 75040

ASM Auto Nancy Lemus 302 South Masters Dr Dallas, TX 75217 Atla Pacific Trading LLC Omar Kolaghassi 5909 Forest River Dr Ft. Worth, TX 76112 Auto America Eiad Al Chami 3702 Callstone Ct Richardson, TX 75082 Auto Haus Imports Samir Juma 2034 W. Main St. Grand Prairie, TX 75050 Auto Icon Roger Tajgardoon 423 E. 29th St Houston, TX 77008 Auto Web Expo, Inc Farmers Branch Hassan Rahmanian 4630 Alpha Rd Farmers Branch, TX 75244 November 2014

T e x a s

City Auto Import Nelson Flores 11311 Harry Hines Blvd, Ste 514 Dallas, TX 75229 Compass Auto Sale Saeed Habibzeed 8033 Rendon Bloodworth Rd Mansfield, TX 76063 Cost Plus Auto Sales Khalid Abu Anbar 519 W. Division St Arlington, TX 76011 Coyote Autos Mustafa Yassin PO Box 412 Helotes, TX 78023 D & M Enterprise Group Omar Al-Sadi PO Box 162992 Fort Worth, TX 76161 Dallas Autos Direct Hodi Bayatneh 3228 Skylane Dr Dallas, TX 75006 Dari’s Auto Land Dari Ortiz 3620 E. Belknap St Ft. Worth, TX 76111

East Texas Auto & Finance Jenny Hugghins 480 S. Dickinson Rusk, TX 75785 Elite Motors Attique Dar 201 W. Division St Arlington, TX 76011 Elm Street Motors David Whitehead 3707 Elm Street Dallas, TX 75226 Eurodrive Motors Eugenio Lozano 1820 Forest Lane Garland, TX 75042 Excellence Auto Direct Matt Riani 15510 Midway Rd Addison, TX 75001 Express Auto Group Said Jayyusi 333 E. Division St. Arlington, TX 76011 Familia Auto Sales Sean Paul Segura 605 N Vernon Dallas, TX 75208

Car City Adriana Almeida 22102 Silverfield Park Ln Katy, TX 77449

Denemy Logistics Ltd Okey Obukwelu 13527 Vargon Street Dallas, TX 75243

Fidelity Financial Bobby Alavi PO Box 251671 Plano, TX 75025

Car Depot Aaron Mitchell 2164 Jacksboro Hwy #200 Ft. Worth, TX 76114

Destination Motorscars Josh Feldman 2806 Capital St Wylie, TX 78098

Five Star Autoplex Harmit Chattha 6301 E. Lancaster Ave Ft. Worth, TX 76112

Car One Autoplex Hakim Ismail 3600 W. Division Arlington, TX 76012

DFW Car Mart Ed Kent 2020 E Division St Arlington, TX 76011

Five Stars Chrysler & Dodge Iyad Obaid 2323 NW 25th St Ft. Worth, TX 76164

Car Stop Inc. Abbas Mirzadeh 6021 S. Cooper Arlington, TX 76001

Diabco Auto Sales Mohammad Diab 1777 E. Balm Canyon Palm Springs, CA 92264

Forest Motors LLC Akalu Nurye 13529 Vargon St Dallas, TX 75243

Chevy of Brazoria Fred Matar 2901 Bingle Houston, TX 77055

DLA Motorcars Luis Leal 1820 Forest Ln Garland, TX 75042

Fox Auto Sales Sergio Serrano 2321 Colony Ct Dallas, TX 75235

Citi Investments Irvin Castillo 6203 Knollwood Trl Spring, TX 77373

Dynamic Motors- I-35 Mark Fish 8113 S. IH-35 Austin, TX 78744

Friends Auto Sales Vanessa Jones 7491 Grissom Rd San Antonio, TX 78251

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Please Welcome Our Newest TIADA Members Frontier Wheels & Deals Linda Scott P.O. Box 305 Gardendale, TX 79758

Gutierrez Auto Sales Edgar Gutierrez 3001 NE 28th Street Ft Worth, TX 76111

Kian Motors Esmail Mazrooee 831 E. McKinny St Denton, TX 76209

North Texas Autoplex Chad Snider 7270 Colwell Dr Midlothian, TX 76065

G & S Sales Co James Baker Po Box 5392 Arlington, TX 76005

Hiline Motors Sami Shawwa 14809 Venture Drive Dallas, TX 75234

King’s PreOwned SuperCenter Sunny Le Dizon 3105 Bert Kouns Shrevport, TX 71118

Oliver Auto Sales Inc Joel Oliver 525 N. Interurban Richardson, TX 75081

Hodges Auto Sales Levi Hodges 8132 Jacksboro Hwy. Fort Worth, TX 76114

L A Motorcars Lance Adams 346 S Central Expressway Richardson, TX 75080

Padillas Auto Sales Martin Padilla 3812 South Frwy Ft. Worth, TX 76110

Legend Auto Hassan Rahmanian 11106 Morrison Ln Dallas, TX 75229

Pitre-V Auto Robert Pitre 2642 S. Harwood Dallas, TX 75215

McKinney Auto Sales Todd Farek 901 S. McDonald St McKinney, TX 78069

Pre-Owned Express Farshid Hadaegh 1703 Spring Cypress Rd Spring, TX 77388

IPC Investments Inc Jajib (Gib) Nabbout 23 Lake Sterling Gate Dr. Spring, TX 77379

Mega Deals Automart LLC Lee Miako 413 E. Irving Blvd Irving, TX 75060

Pro Select Autos Amin Noor 4901 E. California Pkwy.

Forest Hill, TX 76116

J & R Auto Center Mohammad Wafayee 5309 James Ave. Ft. Worth, TX 76115

Mi Pueblo BRP Robert Edenfield 8483 North Fwy Houston, TX 77037

Q Motorcars Abex Adane 3316 E. Pioneer Parkway Arlington, TX 76010

J & R Auto Sales Javier Neira 2001 San Bernardo Ave Laredo, TX 78040

MJM Auto Imports Carlos Carvalho 4340 W Davis, Suite 4 Dallas, TX 75211

Quame Emmanuel John Umosen 709 Gunters Mt Lane Wylie, TX 75098

J Foreign Auto Repair & Sales, Inc Jameez Ayad 115 S Bowen Rd, Suite B1 Arlington, TX 76012

Motor Car Finance Moe Abid 2209 FM 1960 Houston, TX 77073

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

MUSA Auto Sale Mousa Mahmoud 4415 NE 28th St Haltom City , TX 76117

Reyes Motors Francisco Reyes PO Box 276347 San Antonio, TX 78227

JW Auto Sales Branch Mario Clemente 3215 NE 28th St Ft. Worth, TX 76111

myBay Automotive LLC Jessily King 1019 Dallas Dr. Denton, TX 76205

S.I.D. Motors Ivan Sampayo 1506 N Zarzamora St. San Antonio, TX 78207

Gigante N Autos Pablo Cordova 707 Fort Worth Ave. Dallas, TX 75208

K & M Motors Khaleel Khaleel 201 W. Division St Arlington, TX 76011

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

Salem Autos Adel Elhindawi 3515 E. Division St Arlington, TX 76011

Global Motor Co. Nabil Alzienati 240 S. Bagdad Grand Prairie, TX 75050

KA Dealer David Aburamadan 8747 Daffodil Houston, TX 77063

North American Financial Mario Garcia 2323 NW 25th St Ft. Worth, TX 76164

Sam’s Discount Autos Sam Aldaas 3301 E. Division St Arlington, TX 76011

Garfias & Sons Auto Sales Luis Garfias 3801 South Freeway Fort Worth, TX 76110 General Auto Acceptance Hani Saadalla 3320 NE 28th Street Fort Worth, TX 76111 Genesis Auto Sales Amadeo Serna 1005 E. Rio Grande St. Victoria, TX 77901 Genuine Motors Direct Ever Delcid 13715 Floyd Circle Dallas, TX 75243 Gerald’s Auto Sales (Airport Fwy) Gerald Maldonado 5213 Airport Fwy Ft. Worth, TX 76117 Gerald’s Auto Sales (Mansfield Fwy) Gerald Maldonado 3621 Mansfield Fwy Ft. Worth, TX 76119 Gerald’s Auto Sales (South Fwy) Gerald Maldonado 4416 South Freeway Fort Worth, TX 76107 Gerald’s Auto Sales, Inc. Gerald Maldonado 208 NW 28th Street Fort Worth, TX 76106

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Honda of Burleson Victor Bernal 632 N Burleson Blvd Burleson, TX 76028 Impress Motorz Inc David Brito 11311 Harry Hines Blvd.

Ste 514 Dallas, TX 75229

Jeno Autoplex Abex Adane 6301 Denton Hwy Watauga, TX 76148

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Please Welcome Our Newest TIADA Members Silva Auto Sales Sandra Silva 3116 E. Lancaster Ave Ft. Worth, TX 76103

Texas Carz Sam Nimer 2399 Midway Rd Carrollton, TX 75006

Top Quality Autos Olufemi Onreti 6606 Ridgetree Ln #911 Arlington, TX 76017

Smart Choice Auto Sales – Pasadena Khalid Mehmood 2631 South Shaver Pasadena, TX 77502

Texas Exclusive LLC Megan Wells 17529 State Highway 6 S College Station, TX 77845

Trey Jackson Motors Trey Jackson 1980 IH 35 New Braunfels, TX 78130

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

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

Unique Auto Sales Mark Beard 709 S. Main St Waetherford, TX 76086

Stovall Used Cars Perry Stovall 1796 Mystic Rockwall, TX 75032

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

US Auto Sales Abdelmoneim Elhassan 2625 Castle St Irving, TX 75038

Supreme FCU Bahram Behjoo 650 S Walton Walker, Ste 100 Dallas, TX 75211

The Kimp Group Ivan Martin 1212 Bradbury Lane Grand Prairie, TX 75052

US Direct Auto Inc Asghar Mohebpour 11527 Jones Rd Houston, TX 77076

Terry’s Used Cars Terry Jacks 1355 N. 11th Street Beaumont, TX 77702

Top Line Autos Inc Armen Martirosyan 1148 Luke St Irving, TX 75061

Z Max Auto Khaled Lahham 1705 W. Division St Arlington, TX 76012

associate Members

Frost Bank Clint Cockerell 777 Main St. Ste 500 Fort Worth, TX 76102

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November 2014

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TIADA DeAler AcADemy 2014

Keeping Your Dealership Legal and Compliant a seminar with Michael W. Dunagan, TIADA General Counsel Author of the standard-setting books, “Dealer Financing of Used Car sales” and “Texas Automobile repossession: A Lien Holder’s Legal Guide.”

This class is the 2014 version of attorney Michael W. Dunagan’s ongoing quarterly compliance seminar. Featuring updates on both federal and state compliance issues, this session focuses on advanced dealership financing issues. This is the practical side of compliance from the association that understands you have a business to run — and you want to run it right.

The seminar will focus on advanced financing concepts, with special emphasis on in-house financing, repossession & bankruptcy issues, OCCC compliance and federal regulations. u u u u u u u u u u

u u

Customer ID requirements – what is acceptable?

Privacy Notice requirements – do we need a new, custom form? risk-based Pricing – what does the rule require?

Credit Card Convenience Fees – what is allowable?

Adverse Action rule – who is affected?

Consumer Financial Protection bureau (CFPb) – what can dealers expect? bankruptcy – when do we have to give the vehicle back? repossessions – When does the 60% rule apply? Is repo notice required?

Do we have to return custom wheels? Do we have to disclose a GPs unit?

OCCC Audits – what are the most common mistakes dealers make?

TxDMV enforcement – advertising violations, title management issues & more

PLUS: Texas Legislative session – an update on bills that will affect the industry Q & A – don’t leave until you get all your questions answered by the top industry expert in Texas, Michael W. Dunagan

Monday, December 8, 2014 Dallas, Texas

seminar will be held from 9:00am - 3:30pm DoubleTree by Hilton Hotel Dallas Market Center 2015 Market Center blvd. | Dallas, TX 75207 214.741.7481

sponsored by: Collateral Protection Insurance www.cpiai.com

Discount Pricing for Multiple Attendees!

MeMbers – First registrant $149, each additional $99 (Must be from same dealership)

NON-MeMbers – $299

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register online at w w w . t x i a d a . c o m or by phone at 800.442.5944.

Texas Independent Automobile Dealers Association

www.passtimeusa.com

behind the wheel TIADA Launches Dealer Training Center

by Jeff

Martin

tiada executive director

C

course sitting at your computer any time of day, saving an you tell me how to transfer a title?” I get this you travel costs and time away from your dealership. The question from time to time from dealer members modules are short and self-paced, so you can leave and who go on to explain that the individual who had come back later if you need to. For larger dealerships, you been doing their title paperwork for years quit abruptly. I can use the TIADA courses to supplement the training usually reply by telling them we have an upcoming Dealer you provide new employees as they come onboard. Every 101 class that includes a whole section on transferring participant will receive a certificate of completion at the titles. That is about the time when I hear the caller’s disend of a course, which appointment as they say, will help promote good “It’s in four weeks in San quality control.

Antonio. I live in Lamar An Introduction to Speaking of quality, County (brief pause) Tr a n s f e r r i n g T i t l e s we have over 1,000 man and I just sold a car this (English or Spanish) hours in development morning.” They continue, Members and production on just “I will have a new person H $ 49 single-user access. this first course, which starting on Monday but I This provides you with one account and has been reviewed by the can’t wait four weeks.” access to the course for 14 days after purchase.

Tax Assessor-Collectors Although TIADA Association of Texas staffers are happy to help H $ 199 multi-user access.

(TACA) for accuracy. We a member work through This provides you with up to 5 accounts and want to thank the TACA the ins and outs of a title access to the course for 90 days after purchase. president, the TACA application, we realNON-Members board and its members, ized that spending an H $ 99 single-user access. and the various county hour on the phone with This provides you with one account and access to tax office staff members a dealer every time this the course for 14 days after purchase. Multi-user across the state who proissue came up probably access is not available for non-members. vided countless hours wasn’t the most efficient of input, guidance and plan. That scenario, support. along with other inquiAs I mentioned earlier, the TIADA Dealer Training ries from members, prompted us to create an online Center will continue to add new sessions. Initially we training center for dealers, with our first online course will focus on helping you stay compliant and getting being, “An Introduction to Transferring Titles,” offered answers when you need them. Over time, we hope to in both English and Spanish. This is just the first in a grow the center into your first and only stop for Texas catalogue of courses we plan to offer. independent dealer education.

Our goal is to build online training sessions that help For information on how to access the TIADA dealers with some of the more common but essential dayDealer Training Center, visit www.txiada.com/ to-day operations of your dealership. For a smaller dealer, DealerTrainingCenter/. this should provide the perfect solution—you can take a

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November 2014

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