Texas Dealer, September 2013

TIADA Welcomes 2014 State President

Michael Thomasson In This Issue: - Chacon Autos Named 2013 Texas Quality Dealer of the Year - TIADA Annual Conference & Expo Wrap-Up - Complete Legislative Summary - How Can You Say, “Yes?”

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2014 TIADA Board of Directors

Volume XIII

Chairman of the Board Byron L. Riley/Uncle Buddy’s PreOwned Autos, LTD. 409 North Loop West Houston, TX 77008 Office: 713.869.3405 Email: byron@unclebuddyauto.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 PO Box 127/Round Rock 78680 Office Hours M-F 8:30am - 4:30pm 800.442.5944 • Fax 512.244.6218 jeff.martin@txiada.com

Issue 9

/

S e p t e m b e r 2 013

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 Kathrine Tolsch, TIADA Treasurer

6 On The Cover: TIADA Welcomes 2014 State President Michael Thomasson 9

2013 Legislative Summary

by Jeff Martin

19 New Members 21 Regulation Matters: Can They Do That??

Storage Charges & Mechanic’s Liens

by Danny Langfield

22 Upcoming Events 23

TIADA Annual Conference Wrap-Up

26

hacon Autos Named 2013 Texas C Quality Dealer of the Year

by Danny Langfield

34 Local Chapters 34 2013 Auto Auction Directory & Resource Guide 39 Board of Directors Meeting Minutes 41 Legal Corner: Dealers Face Increased Compliance Enforcement

by Michael W. Dunagan

45

TIADA Educational Offerings for the Fall

46 Behind the Wheel

by Jeff Martin

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

Did You Know... the fall/winter education schedule has been announced? Just visit Education/TIADA Dealer Academy Offerings Sept. 2013 – Dec. 2013 for the complete lineup.

The Editor of the Texas Dealer magazine is Danny Langfield, Deputy Executive Director of TIADA. To change your address for subscription and/or for other TIADA products, call the TIADA state office at 800.442.5944, 512.244.6060 or fax 512.244.6218. E-mail: info@txiada.com. New Membership/Subscriptions: If you are a member of TIADA, you may receive this magazine free of charge. Membership year runs from Jan 1 to Dec 31. Back issues are available for $20 each subject to availability. Send a check or money order, along with your name and mailing address to TEXAS DEALER, Attn: Back Issues, P.O. Box 127, Round Rock, TX 78680-0127.

Sorry, no billing. Notice to all members concerning services and products: TIADA was established in 1944 to develop professional standards of service and conduct for the independent auto industry. Opinions expressed herein are not necessarily those of the TIADA management, the Board of Directors or the membership.

Likewise, the appearance of advertisers or their indemnifications of TIADA does not constitute endorsement of the products or services featured.

officers’ message

by Kathrine

How Can We Say, “Yes?”

H

ow can we say, “Yes?” The concept behind the question is quite familiar: Customer First, Positively Outrageous Service (POS), Consultative Selling, and so on. It’s really a very simple question, but not always easy to answer. How can you say yes, in circumstances when it may seem unrealistic or, on the surface, like a bad business decision?

T. Scott Gross was a keynote speaker at our Annual Conference this past July. I first heard him speak in 1996 when I worked for a national staffing company and became a true believer and student of Positively Outrageous Service (POS), so I looked forward to hearing him speak again at our conference. I was not disappointed!

For over 15 years I have believed in POS, and that is what led to the idea of, “How can we say, ‘Yes’?” When a customer comes to your business, they are looking for your help. They need to solve a problem. In most cases the problem is transportation related. We all know that our customer has heard a hundred “no’s” and they are just looking for that one little “yes.” What a relief it must be for them when they finally hear it. Don’t misunderstand, we turn down customers regularly, we just don’t say “no.”

This past May was a particularly slow sales month for us, even in comparison to past years. Based on traffic logs, I knew there were enough people coming to the lot, we just weren’t selling. My staff and I sat down to discuss this slump. I determined that when the staff was talking with potential customers, they were qualifying them “out” before an application was even started. So we discussed talking with our customers in the context of how can we make this work, what are the options, instead of let’s find out reasons to say no and not even present the deal. In other words, “How can we say, ‘Yes’?”

If you really want to make a difference and truly listen to your customer, you will find out their needs and concerns, and that is when you figure out how to say yes.

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Tolsch

CICO Auto Sales (Dallas) TIADA treasurer

To apply this concept you will have to eliminate phrases such as, “I don’t know;” “We can’t;” “We don’t;” and “No, but...” and replace them with phrases such as, “I’ll find out,” “Let’s figure out how we can,” “We would be happy to when/if….,” and “Yes, we can…”

“How can we say, ‘Yes’?” is a mindset, and it must come from the top. You have to be willing to think out of the box and let your employees think out of the box too. You must adjust your attitude to developing a scenario or set of circumstances in which saying “yes” works for you and the person asking the question (very important point: solution must be attainable and agreeable for both parties).

Instead of thinking of all the reasons you shouldn’t or can’t, begin thinking of how you can and why you should.

Your employees need to see you use this approach, not just with customers but also internally.

Examples:

Can we finally replace the worn out chairs in the reception area?

Yes, when we reach our collection goal for the week/ month (assuming goal is achievable).

Can I buy this Tahoe with $500 down?

Yes, you can use our layaway plan, Deferred Down program, etc.

Can you fix my A/C for me - but I can’t pay for it all?

Yes, we just need to figure out a payment plan for you and what you can pay up front.

Following a, “How can we say, ‘Yes’?” approach is infectious, because people inherently want to feel good. Saying yes creates a positive environment, with more energy and an overall better mood and attitude. Your employees will feel it and so will your customers. I’m also happy to say sales for July and August have improved greatly!

So, how can you say, “Yes?” 5

on the cover compiled by Texas Dealer staff

Michael T. getting crazy with the cash at the 2008 TIADA conference.

TIADA Welcomes 2014 State President

M

Michael Thomasson

ichael Thomasson was elected TIADA state president at the 2013 House of Delegates meeting in San Antonio on July 13th. Michael’s dealership, Mike Carlson Motor Company (MCMC), has been very involved with TIADA for many years. Roy Carlson (an MCMC principal) was named Texas Quality Dealer of the Year in 1997, and served on the board of directors for many years, including as TIADA president in 2000 and 2001.

Michael was elected to the TIADA board of directors at the 2006 state convention. He has served as Vice President, Treasurer, Secretary, and President-Elect prior to becoming the 2014 president.

The Texas Dealer had an opportunity to visit with Michael about the

6

upcoming year, the association and the industry in general.

Texas Dealer: How did you get into the car business?

MT: I was being discharged from the air force after serving 4 years, I wanted to go into sports medicine and had planned on starting college in the fall. I went to work for my father in law the 1st of June of the same year to work for the summer.

That was 32 years ago. I guess I could still go to college if this car business hobby doesn’t work out.

Texas Dealer: How did you first get involved with TIADA? Roy Carlson had been the MCMC representative for many years and he was ready to step away from the association so I stepped in to be the representative for our group. I started out

as vice president at large and worked up to president.

Texas Dealer: Tell us about your personal history – where you grew up, family, education, other ventures, etc…

I grew up in Fort Worth in a family of six. I served in the military after high school. I am involved in various real estate ventures. I am also currently the president of CAFA, Community Auto Finance Association, which was formed to better communicate the voice of the BHPH industry to the CFPB (Consumer Financial Protection Bureau).

Texas Dealer: What would summarize your personal business philosophy?

To be a good community partner. To provide a good car at a reasonable price and fulfill the transportation needs of

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September 2013

our customer. A good sumTo continue to open doors mary would be, “Take care with state agencies and comof the customer and the cusmunicate the wishes of the tomer will take care of you.”

TIADA members. To find new pathways to help the loTexas Dealer: Who has cal chapters succeed. influenced you as a car dealer?

There have been so many Texas Dealer: Where people that have influenced do you see the future of my life it’s hard to name a few TIADA? and not miss someone that I would hope that our deserves mention. Let me just membership continues to say I have been lucky to have grow, and that our confera tremendously supportive ence continues to do so well. network of TIADA memberI also hope we continue (l to r): Michael with Byron Riley and Rep. Larry Phillips, House friends as well as other dealour strong efforts at the Transportation Committee Chair, at the 2013 TIADA Legislative Day ers across the country that legislature. at the Capitol. have influenced me greatly.

Texas Dealer: Any last Texas Dealer: Why words? challenges that we must adjust to all did you decide to run for President of I said it in my speech at the the time. A big challenge now is inTIADA? awards banquet: please get involved ventory – both cost and availability.

Being president of TIADA is a small in TIADA. There are a lot of ways to Also more regulation is looming on way of giving back to an industry that do that, from signing up members the horizon, so compliance is going has given so much to my family. to serving on the board to making to be a big issue in the coming years. sure your INDEPAC money is sent Texas Dealer: What is your Texas Dealer: What do you in. Find your spot and pitch in — greatest concern for the upcoming year?

As car dealers there are many think the role of TIADA should be? we need you.

September 2013

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feature

2013 Legislative Summary

by Jeff Martin

TIADA Executive Director

T

he 83rd Texas Legislature came to a close on May 31, 2013, having considered over 6,000 pieces of legislation. TIADA took a very active interest in a number of bills related to the auto industry. On the following pages you will find a summary of some of those bills, including TIADA’s position, actions and the final fate of each piece of legislation.

Space constraints prevent a comprehensive

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September 2013

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2013 Legislative Summary listing of all bills TIADA was active with, but the complete legislative wrap-up can be found online at www.txiada.com under Advocacy.

HB 3206 (Alonzo)

This bill would have created a Texas resident driver’s permit, provisional Texas resident driver’s permit, and Texas resident driver’s instruction permit for undocumented individuals living in Texas.

TIADA’s Position: For

10

TIADA’s Action: TIADA

worked closely with the author of this bill as well as the Chair of the State Affairs Committee to try to find language that would be acceptable to Texas legislators. The association signed a letter of support with numerous other associations in effort to have this bill heard on the house floor.

What happened to this bill?

DID NOT PASS

The bill passed out of State Affairs but was never placed on the House calendar for a hearing.

HB 949 (Smithee)

This bill would extend personal automobile insurance policies to cover vehicles acquired during a policy’s term. The bill would require the insurance policy to provide coverage to an acquired vehicle if the policyholder notified his or her insurer within 20 days of becoming the owner of the acquired vehicle. The coverage level for a vehicle acquired in addition to a covered vehicle would be set at the broadest coverage for any insured vehicle already on the policy.

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2013 Legislative Summary TIADA’s Position: For TIADA’s Action: TADA (the franchised dealers association) was a major stakeholder on this bill. We testified in favor of the bill in the House Insurance Committee.

What happened to this bill?

PASSED

This bill was signed by the Governor and became law on September 1, 2013.

HB 1773 (Thompson) & SB 1567 (Davis)

Both these bills attempted to address issues surrounding named-driver only limited policies and excluded driver limited polices. HB 1773 would have eliminated the policies and SB 1567 would require more disclosures on insurance documents.

TIADA’s Position: For TIADA’s Action: Both of

these bills faced significant opposition from the insurance lobby. Our grassroots effort helped to get them out of their respective chambers. Brent Rhodes (Fiesta Motors – Buda) and Robert Beck (Stop and Drive – San Antonio) testified in favor and dealer members made over 70 phone calls and sent 90 emails. As the session wound down it became apparent HB 1773 may not have time to make it through the Senate.

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Therefore, the language in this bill was introduced as an amendment to SB 1567 which had passed the Senate and was already set to be heard on the House floor. Under the threat of a point of order from Rep. Sheets, which could have killed

both concepts, SB 1567 was not amended with the language from HB 1773.

What happened to these bills?

SB 1567 PASSED HB 1773 DID NOT PASS

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2013 Legislative Summary This bill was signed by the Governor and became law on September 1, 2013. Texas Department of Insurance will need to write rules to implement this new law.

HB 2690 (Elkins)

This is TIADA’s bill. It would give law enforcement and TxDMV effective new tools to fight curbstoning.

TIADA’s Position: For

TIADA’s Action: The association has been working on the issue with various stakeholders for numerous years. The behind the scenes work and the grassroots effort was highlighted in the cover story of the July 2013 issue of Texas Dealer.

What happened to this bill?

PASSED

This bill was signed by the Governor and became law on September 1, 2013.

HB 2947 (Harper-Brown)

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

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

sented the idea behind this bill to Rep. Harper-Brown in January and she agreed to author the legislation. The bill was considered at a public hearing in the House Transportation Committee where

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2013 Legislative Summary Scott Allen (Auto Land – Haltom City) testified in favor. The bill made it to the House floor where we sent out an action alert and over 143 of you sent emails to your legislator asking for support. It passed out of the House overwhelmingly but it stalled in the Senate Transportation Committee when a few county commissioners raised concern that the bill would decrease the amount of tax dollars coming into their county.

What happened to this bill?

DID NOT PASS

The bill was never placed on the committee agenda and died in the Senate Transportation Committee.

HB 3071 (Pitts)

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

TIADA’s Position: Against TIADA’s Action: TIADA

originally met with author’s staff to express our concern. Shortly after, we built a coalition of bankers, tax assessors and credit unions to raise opposition to the bill. TIADA met with each House member on the Business

14

& Industry Committee to express our concern over this bill and provide information prior to the hearing. When the bill was laid out before the House Business & Industry Committee, Phil Lathrop (VP Auto Sales – Garland), among others, testified against it. Many dealers made phone calls, sent emails and made personal visits to the Capitol to lobby against this bill.

What happened to this bill?

DID NOT PASS

The bill was never voted out of the House Business & Industry Committee.

HB 759 (Toth)

This bill would have repealed the prohibition on the sale of motor vehicles on consecutive Saturdays and Sundays (blue law).

TIADA’s Position: Against TIADA’s Action: We

expressed our concern to the author of the bill.

What happened to this bill?

DID NOT PASS

HB 38 (Menendez)

This bill would increase the penalty for installing counterfeit airbags.

TIADA’s Position: Neutral (as amended)

TIADA’s Action: The association did not have an issue with this bill as it was introduced.

However, the bill was amended to include the following: “knowingly or recklessly sells a motor vehicle in which an airbag is not installed without clearly disclosing that the vehicle does not have an airbag” We explained to the author our concern of using the phrase “recklessly sells a motor vehicle…” and why that would create a problem for dealers. The author agreed to remove the entire amendment and we remained neutral.

What happened to this bill?

PASSED

This bill was signed by the Governor and became law on September 1, 2013.

HB 2305 (Rodriguez, E.)

The relevant portion of this bill proposed the combination of the inspection and registration stickers – a concept termed, “single sticker.” As amended this bill will require new inspection on vehicles sold which had NOT been inspected in the 180 day period preceding the vehicle sale date.

TIADA’s Position: Against TIADA’s Action: The lan-

guage that was added as an amendment to HB 2305 was introduced in two other bills prior to it being placed on this bill.

The association voiced our significant concern to the authors

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2013 Legislative Summary of each bill and offered language that would mitigate the damage of a single sticker scenario and new registration if the vehicle had not been registered in the last 90 days prior to the sale, as originally proposed. Both bills ended up dying but HB 2305 was amended in the last couple of days of the session with the single sticker language. We immediately starting working with the new author to amended the new language. Rep. Rodriguez understood our concern and agreed to increase the time frame between when a vehicle was last inspected from 90 days to 180 days.

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What happened to this bill?

PASSED

This bill was signed by the Governor and became law on September 1, 2013. However, the department will need to write rules on this bill and at this time it is not clear when it will be implemented.

HB 894 (Kolkhorst)

This bill amends the Transportation Code to authorize an independent motor vehicle dealer or an employee of such a dealer

to use a metal dealer’s license plate on a service or work vehicle used to transport a vehicle in the dealer’s inventory to or from a point of sale.

TIADA’s Position: For TIADA’s Action: This bill

came from a concern of a constituent in the author’s district.

The author ask us to review the language to make sure we there was no conflict. After our review of the language and brief conversation with her constituent we supported the bill.

15

2013 Legislative Summary What happened to this bill?

TIADA’s Position: For

This bill was signed by the Governor and became law on September 1, 2013.

worked closely with other industry stakeholders on this issue.

We registered our support in both the Senate and House.

PASSED

HB 2462 (Thompson, S.)

This bill allows a retail seller, at the time a retail installment contract is executed for a motor vehicle sale, to offer to sell to the retail buyer an automobile club membership for a reasonable charge.

A special thank-you goes to each dealer who attended TIADA Legislative Day at the Capitol, came to the Capitol to walk the halls, testified, made calls and sent emails throughout the session. Thanks to these members, your voice is not only being heard, it’s growing in unity, strength and influence.

TIADA’s Action: TIADA

What happened to this bill?

PASSED

This bill was signed by the Governor and became law on September 1, 2013.

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Please Welcome Our Newest TIADA Members Dealer Members 410 Motors, LLC Greg Gould 410 S. 38th Street Killeen, TX 76543 A & B Auto Sales Michael Nichols 917 W Hwy 83 Pharr, TX 78577 Amal Auto Sales & Services Kamaljeet Bhamra 13610 Floyd Cr Dallas, TX 75243 Amistad Auto Sales John Phillips P.O. Box 6147 McAllen, TX 78502 Apache Motors Sergio Espinosa Avenida Revolucion 1012 Nuevo Laredo, Tamaulipas, MX 88000 Apple Remarketing Rick Hinton 2227 Michigan Ave. Arlington, TX 76103 Austin Auto Sales & Service James Waldron PO Box 270014 Austin, TX 78727 Auto Deals LLC John Rockey 11723 IH 35 N San Antonio, TX 78233 Auto Maxx Karim Hasbun 1721 Hwy 6 South Houston, TX 77077 AutoAmerica Jay Goodart PO Box 543069 Grand Prairie, TX 75052 Barney’s Auto Sales Barney Stagner 3201 Shaver St Pasadena, TX 77504 Bright Luxury Motors LLC Todd Bright 925 St Andrew St Gonzales, TX 78629 Capital Motor Co - San Antonio Ramiro Tanguma 1543 S.E. Military Dr. San Antonio, TX 78214 Car City Jason Canal 3015 Morgan Ave., Suite 1 Corpus Christi, TX 78405 Carizma Motors BJ Lewis 5733 58th Street Lubbock, TX 79424 CarMex Auto Brokers Andres Chavarria 2823 Chalk Hill Rd. Dallas, TX 75212 CARZ Ready Samuel Engler 2107 Capitol San Antonio, TX 78201 Caudle Motors Inc. Ryan Stone 5534 E. Belknap St Haltom City, TX 76117 September 2013

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Corporate Cars Inc Frank Tajgardown 8406 N Freeway Houston, TX 77034

Lone Oak Motors Bart Milam 10010 Hwy 290 W Austin, TX 78736

TX HWY Auto Sales LLC James Courtney PO Box 612 Kennedale, TX 76060

D & J Auto, LLC Doug Richardson 101 Lane Prairie Rd Cleburne, TX 76031

Manny G Motors Manuel Gavarrete 3518 Nogalitos San Antonio, TX 78211

Veracruz Auto Sales Mike Nader 9901 Mateo Cove Austin, TX 78717

Diamond Auto Sales Humberto Martinez PO Box 5208 Corpus Christi, TX 78465

Medical District Auto Group Tom Ryan 1320 Chemical St., Suite A-1 Dallas, TX 75207

Washington Auto Sales LLC Kevin Washington 10111 US Hwy 183 S Austin , TX 78747

ECO Auto Zareh Khanbabaei 704 N. Lamar Blvd.

Austin, TX 78703

MG Mega Motors Manuel Gonzalez 702 Spencer Hwy South Houston, TX 77587

Weeks Motors Mandy Weeks 2635 Jacksboro Hwy Wichita Falls, TX 76302

Empire Motorcars Eric Rioja 309 W Ave. B Garland, TX 75040

Novak Motors Beth Hollander 210 Airport Freeway Bedford, TX 76022

Witt Motors, Inc Ray Witt PO Box 1058 Dumas, TX 79029

Fairway Auto Center Chris Beaty 4827 Troup Hwy Tyler, TX 75703

Only 1 Motors, LLC Kevin Bury 13825 FM 2769 Austin, TX 78726

Y Walk Auto Sales William Barreda 812 Stamps Ave Ft. Worth, TX 76114

Gonzalez Auto Sales Saul Gonzalez PO Box 454 Del Rio, TX 78841

Peek Motor Co., Inc. Michael Peek 10914 Eastex Freeway Houston, TX 77093

Z Auto Place LLC Joe Zeidan 3600 Jeanetta Street, Apt. 1001 Houston, TX 77063

Greenline Motors Hussein Yeha 4305 Vintage Way Garland, TX 75042

Performance Cars of Texas Charles Malec 1900 Preston Road, Suite 267-258 Plano, TX 75093

Associate members

H&H Autos Tammy Hannon 719 West 2nd Street Taylor, TX 76574

Popular Motors Karl Morrow 1842 Wirt Rd Houston, TX 77055

Happy Motors LLC Robert Wharton 148 S. Dowlin #622 Beaumont, TX 77707

Pruitt Auto Sales Beth Pruitt 4411 E. Hwy 377 Granbury, TX 76049

Irving Motors Corp.

Jose Engler 3907 Blanco Road San Antonio, TX 78212

Rotex Truck Center, Inc Roberto Rosas 11802 Sara Rd. Laredo, TX 78045

Irving Motors IH-10 Branch Jose Engler 5400 IH10 West San Antonio, TX 78201

South Eastex Auto Sales Sammy Mize 155 W Freeway Vidor, TX 77662

J & B Pavelka, Inc Benji Pavelka 4410 CR 36W Robstown, TX 78380

SpaCars Enterprises Inc Gerardo Barona 4004 San Pedro San Antonio, TX 78212

Lighting Associates Incorporated Chris Myers 1557 W. Sam Houston Parkway N. Suite 100 Houston, TX 77043

J. B. Auto Sales, Inc. Michael Box 2012 N. Alexander Dr. Baytown, TX 77520

Straight Line Automotive Group Jeremy Wiggains 2727 Northhaven Rd. Dallas, TX 75229

Melanie Jones Consulting Melanie Jones 148 Clover Lane Decatur, TX 76234

J.E. Motors Jaime Engler 8874 Grissom Rd. San Antonio, TX 78251

Sunset Auto Group Trey Stockton 6751 CR 110 Round Rock, TX 78665

NextGear Capital Patty Turner 1320 City Center Drive , Suite 100 Carmel, IN 46032

Jim’s Discount Auto Center LLC. Elizabeth Volz 706 E. 53rd St. Austin , TX 78751

Super Deal Auto Sales Yitshak Eini 6225 Beechnut St Houston, TX 77074

PrimaLend Dealer Services Dolores Avila 200 E. Abrams St., Suite 200 Arlington, TX 75060

King’s Auto Sales Co. Rene Aguirre 7325 New Laredo Hwy San Antonio, TX 78211

Swiss Auto, LLC Goldie Petri 3325 SW Military San Antonio, TX 78211

Texas Credit Union League Richard Grady 4455 LBJ Freeway, Suite 1100 Farmers Branch, TX 75244

Lakeside Autos Chase Gries 8475 FM 2673 Canyon Lake, TX 78133

Sycamore Creek Motor Co. Jim Silva 1818 E. Lancaster Ave. Ft. Worth, TX 76103

Wayne Reaves Software Bob Higgins 6211 Thomaston Road Macon, GA 31220

D e a l e r

Arcana Insurance Services Gary Kirkindoll 14755 Preston Road, Suite 430 Dallas, TX 75254 CalAmp Wireless Networks Corp.

Steve Farlow 1401 N. Rice Ave Oxnard, CA 93030 Dealer Funding Partners, LLC Michael Tinberg 1110 North Loop 336 West, Ste 300 Conroe, TX 77301 DealerRater Andrew Chase 203 Crescent Street, Suite 503 Waltham, MA 2453

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TIADA DeAler AcADemy 2013

Dealer 101: Nobody Told Me That!

This class is designed for those dealers new to the business, those considering opening their own dealership, new employees, family members or anyone else needing a refresher on the basics. We’ll cover everything you need to know to run a clean, compliant used car dealership in Texas. Topics include:

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

n n

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TIADA teaches you the business from an experienced, practical point of view.

Presenters will include:

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

Monday, September 16, 2013 Austin, Texas

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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.

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Texas Independent Automobile Dealers Association

AT E D C O L L E C T I O N TECHNOLOGY

regulation matters

Can They Do That?? Storage Charges & Mechanic’s Liens

by Danny

W

hat an interesting conference.

Of course, all TIADA conferences are interesting to me, as a staff member, but this last one was unique in the sense that I had the opportunity to moderate one of the dealer round table discussions, namely: “Can They Do That?? Storage Charges & Mechanic’s Liens.”

The table was co-moderated by the inestimable Dorothy Starr, Director of Motor Vehicles for Tarrant County, who helped connect the dots regarding what the county requires of an individual looking to obtain title from a mechanic’s or storage lien.

The round table sessions had sort of an ivory-towermeets-the-street feel, in that I was prepared with statutory references and code cites (aka, how it is “supposed” to work), but the dealers were armed with significantly more valuable information gleaned from personal experience (aka, how it actually works in real life). While we certainly can’t adequately sum up 3 ½ hours of discussions in this space, I wanted to touch on a few points that came up repeatedly.

We started each round by discussing towing charges.

Towing rates are set by municipalities, not by the state. As a result, those charges are often dependent on where the hookup occurs. Not a popular fact, but a fact nonetheless.

Next we moved on to storage charges. The first fork in the road comes in determining whether you are dealing with a licensed VSF (Vehicle Storage Facility) or a nonlicensed facility. Contrary to popular belief, non-licensed facilities may legally charge storage fees. The difference between a VSF and a non-VSF is that a VSF is licensed

Langfield

TIADA deputy director

Contrary to popular belief, non-licensed [vehicle storage] facilities may legally charge storage fees. and regulated by TDLR (Texas Department of Licensing and Regulation), and as a licensed entity, is subject to the limitations of Chapter 2303 of the Occupations Code. That statute sets out what charges are permissible and allowable amounts for each. All that is the good news. The bad news is that a VSF storage lien is superior to a dealer’s lien, and therefore a VSF licensee is able to get title to a vehicle without obtaining a release of lien from the car creditor. (cont’d on pg. 22)

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Upcoming Events TIADA Dealer Academy September 2013 16 Dealer 101: Nobody Told Me That!

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

October 2013 14 Keeping Your Dealership

Legal & Compliant DoubleTree by Hilton - Dallas Market Center 2015 Market Center Blvd. / Dallas, TX 75207 214.741.7481 Online registration available at www.txiada.com

November 2013 4 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

13 Dealership Accounting for BHPH Arlington, TX 14 Dealership Accounting for BHPH

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

December 2013 2 Keeping Your Dealership

Legal & Compliant Crowne Plaza Hotel 6121 N. IH-35 @ Hwy 290 / Austin, TX 75752 512.371.5210 Online registration available at www.txiada.com

Other TIADA Events October 2013 21 Board of Directors Meeting

Austin, TX 22

Regulation Matters — Can They Do That?? (cont’d from pg. 21)

A non-VSF, on the other hand, is not subject to the terms of Chapter 2303 above and is regulated by…well, no one. Such a facility is defined (sort of) in Chapter 683 of the Transportation Code, but it is neither licensed nor regulated – more bad news. On the bright side, however, their lien is inferior to a dealer’s lien, and therefore a non-VSF should not be able to get title without a release of lien from the car creditor.

Both types of entities above are prohibited under Chapter 683 from charging more than five days of storage until notice is mailed to the owner and any lienholder on the vehicle. Many dealers in our discussions were frustrated by the five day notification period, which, in practice, obligates the dealer to pay for at least five days (plus mail delivery time) of storage without even knowing where the vehicle is. Some attendees also pointed out that certain shady operators engage in a practice of basically holding a vehicle hostage for storage fees, whether they are authorized or not.

These operators may disregard the notification laws entirely, and in some cases illegally part the car out a piece at a time when they are unable to get title.

In a scofflaw situation such as this, a dealer has little choice other than to file a writ of sequestration and have the vehicle removed by a constable. This option is understandably not very appealing to the car creditor when the collateral in question does not justify such an expense.

The tables also touched on mechanic’s liens from time to time. One common theme was that this type of lien had become much less troublesome since the successful passage of the TIADA bill in 2009 addressing fraudulent mechanic’s liens. We discussed the law itself, which is found in Chapter 70.006 of the Texas Property Code. Ms. Starr also mentioned that an individual may not include charges for storage when foreclosing on a mechanic’s lien — only the repair charges are allowable in that situation.

Later on in the day the members of the House of Delegates were given an opportunity to prioritize the various recommendations that came out of the Legislative Caucuses. (By the way, if you have an opinion as to what the association should be working on legislatively, you really need to be at the conference.) The delegates selected the following as the top recommendation: ddress the issue of unreasonable fees and A lienholder notification requirements regarding towing and storage.

Keep in mind that other important (and wellrepresented) stakeholders are also involved in this issue, and their interests may not always parallel ours. But if the first step to change is identifying the problem, it looks like we are underway.

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feature TIADA Annual Conference Wrap-Up

by Danny Langfield

TIADA Deputy Director

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20 dealer attendees packed the 2013 TIADA Annual Conference & Expo in San Antonio for three days of learning, fun and networking.

Joined by more than 80 associate member registrants from 61 sponsoring companies, TIADA dealer members and their families got a full load of education as well as plenty of great experiences at the Hyatt Regency Hill Country.

“I really like having the conference here! It is a GREAT family hotel,” stated Brent Rhodes of Fiesta Motors in Buda. “I really believe that this conference gives us more for our dollar by far than any other conference I attend.”

Following the welcome reception on Sunday night, attendees kicked off the conference Monday morning with the humor and insight of keynote speaker Scott Gross’s presentation on “positively outrageous service” at the opening general session. The rest of the day was devoted primarily to education, with four concurrent sessions in each of four different timeslots.

Among those speaking in the morning sessions were TxDMV’s Bill Harbeson, who talked about the new curbstoning law; Rudy Aguilar, who spoke about OCCC dealer audit issues; and Jennifer Suzuki, who delivered a session on sales skills.

“Ms. Suzuki made several solid points,” said Michael Zak of Dixon Motors in Houston. “I plan on incorporating a number of them in my hiring process.”

After a networking lunch at the sold-out Expo, dealers returned to afternoon breakouts including BHPH dealer panels on collections and insurance issues, sessions on asset protection & estate planning, lead management, marketing to women buyers, comptroller audits, and attorney Mike Dunagan on switching from “as-is” to a warranty, among others.

“The best part was talking to different dealers – it was very nice to see so many new dealers. For this being just my second year attending, I thought it was great!” said Ricardo Gardea of Cars Plus in El Paso.

Tuesday morning saw the return of Ingram Walters, an outstanding speaker and dealer from North Carolina who had last presented at the TIADA Conference in 2010.

“Ingram should open and close the convention!” enthused Mark Brown of Red Carpet Auto Sales in New Braunfels. “Once again, he was very entertaining.” (cont’d on pg. 27)

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“For this being just my second year attending, I thought it was great!�

Ricardo Gardea, Cars Plus in El Paso

September 2013

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Chacon Autos Named 2013 Texas Quality Dealer of the Year

C

hacon Autos is truly a family business, with three generations contributing to the company’s growth and success. Gary Chaney is the son of Chacon Autos founder William Chaney, who founded the company in 1958. Gary began working for the family business in 1987, and currently serves as the company’s CEO. In 2011, Chacon won the NIADA/Manheim community service award and presented a $5000 check to the Martha Turner Reilly elementary school in Dallas.

According to Gary, Chacon Autos was founded on the simple idea that if you treat your customers right, you will be successful — a philosophy they continue to embody to this day.

Texas Dealer: How do you feel about being selected Texas Quality Dealer of the Year? We are very excited to be nominated

Texas Dealer: How did you get involved in TIADA? We began by serving on the TIADA Budget

and selected as Texas Quality Dealer of the year. There are so many great dealers in Texas that we are honored to receive this award. To us, this award is not about one person. It is a true testament to the hard work and contribution of all of the employees at Chacon. So that each one of our employees can share in the excitement we are sending the plaque around to all of our locations to allow every person to see it and take part in the celebration.

& Finance committee and by being involved legislatively with some events organized by the association in the Dallas area. We were fortunate enough to be nominated and then selected as the winner of the Manheim/NIADA Community Service award in 2011. Like many dealers, we began attending the TIADA annual conference to take advantage of the training seminars, to hear the speakers, and to meet and network with other dealers.

Texas Dealer: What about the state association has been most helpful to you? TIADA does a great job of supporting and

Texas Dealer: How has community involvement played a role in your success? Community involvement does two

promoting dealers in many ways. From the annual conferences, the training throughout the year, and the relationship building with the state legislature and regulators, TIADA is a great supporter of our business.

Texas Dealer: What dealer or dealers have been most influential to you?

There are many outstanding family dealers that have

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been in business for 30, 40, or 50+ years. Like them we have tried to keep the same strategy of hard work and taking care of the customer that was established by the founding generation.

great things. It allows us to build relationships with our customers in the local communities where we operate, and it allows Chacon and its employees an opportunity to be a part of something where we can make a difference. In doing this, we are reminded that our customers are not just transactions, but are people whom we care about. Our customers are able to see us as not just a business or institution, but also as people.

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TIADA Annual Conference Wrap-Up (cont’d from pg. 23)

Next up were four rounds of the dealer roundtable discussions, with topics ranging from “Family Members in the Business” and “It’s All About Collections” to “Marketing and Advertising: Where is Your Best Spend?” and “Dealership Management Software Challenges.”

Vicki Smith of A-Ok Auto Sales in Porter had this to say about the roundtables: “I really thought they were great and wished we had even more time we could spend on them. It seemed like as soon as you got started your time was over.”

After lunch in the Expo, the association provided a legislative update and approved bylaws changes at the House of Delegates meeting shortly thereafter.

Tuesday culminated in the traditional presidential awards banquet and dinner, which began with the swearing in of incoming TIADA President Michael Thomasson of Mike Carlson Motor Company in Burleson. The evening’s award recipients included Brandi Brown, winner of the TIADA Scholarship; Wayne Meagher, Top Recruiter; Texas State Representative Rob Orr, who was presented a special Presidential Award; and TxDMV’s Bill Harbeson, who was presented with the Independent Award. (cont’d on pg. 28)

September 2013

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TIADA Annual Conference Wrap-Up (cont’d from pg. 27)

TIADA also inducted a dealer into the TIADA Hall of Fame – Keith Hagler of Taylor Auto Credit who is a past president of the association, a past quality dealer of the year and the current president of NIADA. Brent Rhodes of Fiesta Motors, Sam Harless of Fred Fincher Motors and Gary Chacon of Chacon Autos were the three nominees for the final award of the evening — Texas Quality Dealer of the Year.

The 2013 winner was Chacon Autos (see pg. 26).

Due to the major growth the annual conference has experienced over the last few years, TIADA staff is still looking to make a final determination for the dates and location of the 2014 conference. “Frankly, with the type of property we are looking for, there are not too many venues in Texas that can accommodate us at this point,” said TIADA executive director Jeff Martin. “It is a great problem to have and I know we will find the perfect place for our dealers for 2014.”

Wayne Meagher of MD Auto Sales in Dallas summed up his experience this way: “The whole event was most enjoyable. I especially enjoyed Mr. Walters. The ability to interact with other dealers and receive excellent training and information makes the trip more than worthwhile.”

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Burrel 2009 · Addendum Copyr ight Insurance 09 · © · 9/1/20

316 bpc #24-4

TIADA Membership Application Business Name: ____________________________________________ Select one:

Dealer Member

Associate Member

Contact Person: ____________________________________________ Address: __________________________________________________

2013 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 2014) (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, P.O. Box 127 FAX 512.244.6218

www.txiada.com

512.244.6060

Round Rock, TX 78680-0127 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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2 013 t i a d a 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 Greg Zak • Dixon Motors 281.931.1300 houstoniada@gmail.com Meeting - 2nd Monday (Monthly) Waco-Heart of Texas Bill Miller • Bill Miller Used Cars 254.753.4161 bmillercars@hot.rr.com Meeting - 2nd Monday (Monthly) For more information contact Eddie Massey, Massey Motors 254.753.6661 San Antonio Sonny Paredez • Discount Auto Center 210.680.5600 sonnyparedez@yahoo.com Meetings quarterly (dates announced at www.txiada.com) El Paso James Hobson • H -Town Motors 915.564.9797 htownmotors@aol.com Meeting - 3rd Friday (Monthly) Austin Brent Rhodes • Fiesta Motors 512.312.2201 brent@fiestamotors.net Meetings quarterly Beaumont Laura Miller Sattler Automotive Group 409.866.2987 lsattler@sattlerautomotive.com Meetings quarterly 34

ABILENE CM Company Auctions 2258 S. Treadaway / 79602 325.677.3555 / 866.310.3555 www.cmauctions.com Gregory Chittum, Owner Thursday: 10:00 AM

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

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

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

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

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

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

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

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

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

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

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

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

WACO Heart of Texas Auto Auction (Waco’s oldest auto auction- Proudly serving dealers for 20 years!)

2508 HWY 6 / 76705 / 254.755.7713 www.heartoftexasautoauction.com Allan Wichkoski, Owner Kenny Reigert, General Manager Shirley McMillan, Office Manager Thursday: 7 PM Alliance Auto Auction 15735 N. IH-35 (exit 346) / 76715 254.829.0123 / 254.829.1298 (fax) www.allianceautoauction.com Darren Darnell, GM darren.darnell@allianceautoauction.com Carmen Klaus, Office Manager Every Friday: 10 AM

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

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The TIADA Website:

www.txiada.com Members can log in with their username/password and access our Dealer Member Directory, Legislative Action Center, Legal Consultation Service and much more. Register for all upcoming TIADA events online at the Calendar of Events; access our online membership application; find contact information for all our Local Chapters, and find many additional resources at our Links page.

Texas Department of Motor Vehicles 888.368.4689 www.txdmv.gov Office of Consumer Credit Commissioner 800.538.1579 www.occc.state.tx.us Texas Comptroller 800.252.1382 www.window.state.tx.us NIADA 800.682.3837 www.niada.com

Repossessions

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

Forms

Burrell Printing 800.252.9154 www.burrellprinting.com

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board of directors meeting minutes July 28, 2013 | San Antonio, TX Hyatt Regency Hill Country Resort and Spa

compiled by Texas Dealer staff

At its meeting held on Sunday, July 28, 2013 TIADA heard reports and took the following actions:

New Business None

President Byron Riley called the meeting to order at 1:06p.m. A motion was made to adjourn the meeting.

Moved by Kathrine Tolsch, seconded by Michael Minutes Of Last Meeting Thomasson – Passed Secretary Brent Rhodes presented the minutes of the last Board of Directors meeting.

A motion was made to accept the minutes.

Moved by Greg Zak, seconded by HL Hensley – Passed

Treasurer’s Report

Treasurer HL Hensley presented the Treasurer’s report.

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

Moved by Michael Thomasson, seconded by Kathrine Tolsch – Passed

Meeting adjourned at 3:20p.m.

Respectfully submitted, Brent Rhodes, 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.

Greg Zak updated members on the new City of Houston background check process.

Byron Riley presented the president’s report.

Jeff Martin presented the Executive Director’s report.

Jeff Martin presented the Auction Liaison, Awards, Bylaws, Convention, Dealer Education, Membership Recruitment and Membership Services committee reports.

A motion was made to accept all reports as presented.

Moved by Kathrine Tolsch, seconded by Sonny Paredez – Passed

Executive Session

The board recessed to executive session from 2:00p.m. – 2:12p.m.

No actions were taken from executive session.

Jeff Martin reviewed the upcoming Annual Conference & Expo events.

HL Hensley presented the current budget for FY13.

HL Hensley presented the proposed budget for FY14.

A motion was made to accept the budget.

Moved by Ryan Winkelmann, seconded by Brent Rhodes – Passed Jeff Martin reviewed the process for the upcoming Legislative Summary, Legislative Caucuses and House of Delegates meeting.

Old Business None

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Custom Collateral Protection for the Texas BHPH Dealer Collateral Protection Insurance Agency and Bill Murphy developed the Collateral Protection Insurance Program for Texas Buy Here Pay Here Dealers.

“A BIG TIADA Thanks to all of the TIADA Staff and all the TIADA DEALERS who made the 2013 TIADA Conference the ”BEST EVER!” For your Collateral Protection Insurance needs as well as your Reinsurance needs, please contact Bill Murphy, 512-799-2886.

WARNING: Only purchase a Reinsurance Program from an expert who specializes in the Reinsurance Industry, not a product salesman who “oh, by the way, we can sell you a reinsurance program.”

Call Bill or Bob and make an appointment for us to show you how we can Customize a CPI Program and maximize your profits.

FOR INFORMATION CALL Bill Murphy

P.O. Box 568 • Huntsville, TX 77342-0568 Cell 512-799-2886 • Fax 512-828-6128 E-mail: murphy.wjm@gmail.com

Bob Burke

P.O. Box 568 • Huntsville, TX 77342-0568 Cell 936-295-0370 or 800-366-0036 Fax 936-295-5358 • E-mail: reb@cpiai.com

legal corner

Dealers Face Increased Compliance Enforcement

by Michael

F

or the past several years, subscribers to TIADA’s monthly magazine, Texas Dealer, have been flipping to the Fines and Violations section of each issue to see what their fellow dealers have been charged with and what kind of fines they face from the Department of Motor Vehicles for the infractions.

While some controversy has been generated about the propriety and value of publishing the list, few would argue that it has become one of the most-read features of the magazine (second only to the Legal Corner, we would hope).

Some feel that publishing the list amounts to unfair humiliation and kicking someone who is already down. Indeed, many of the names that appear are prominent dealers (both franchised and independent) who have good reputations in their industry and respective communities. We also have

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personal knowledge of dealers who have been improperly charged with violations, but who settled their cases to avoid the costs of having to hire counsel and travel to Austin to contest the matter.

Occasionally, some of the violations reflect behavior that is so outrageous as to qualify as outright thievery.

But a large number of the citations are for “status” violations, in which a temporary lapse occurred in procedures and quality control, often with no harm to consumer or the state.

W. Dunagan

TIADA general counsel

...many of the names that appear [in Fines and Violations] are prominent dealers (both franchised and independent) who have good reputations in their industry and respective communities.

Of course, ignorance of the law is no excuse, and the failure of underlings to properly handle the duties they have been assigned does not relieve the owner of responsibility for the offenses.

Regardless of anyone’s opinion of whether or not it is appropriate to publish the list, I believe that a major benefit of listing the violations and fines is that seeing real names and dollar amounts drives home the message that enforcement is for real. The information also represents an opportunity for well-intentioned dealers who may be inadvertently out-of-compliance to see the error of their ways based on the experience of those who have done the same thing.

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Hot Compliance Issues Here is a list of some of the more common violations found on TxDMV and OCCC audits:

TxDMV

Failure to timely transfer title

Consistently ranking near the top of complaint and violation lists is late transfer of titles.

Failure to keep adequate records

Dealers are required by rule to keep all sales and title records for 24 months, with the last 13 months of records on premises. Many of the other DMV violations are accompanied by a citation for incomplete records.

FTC Buyer’s Guides

This document must be displayed on any vehicle offered for sale by a retail dealer, but many dealers are caught with less than perfect compliance.

Misuse of temporary tags

Issuing multiple tags, failing to keep tags secure, or allowing someone other than a bona fide purchaser to use a buyer’s tag are violations.

OCCC

Finance License

Creating, holding, or servicing motor vehicle retail installment contracts without a finance license subjects the violator to severe fines.

Failure to send post-repossession notice

The UCC requires that notice be sent to debtors after a repossession, and the failure to do so is a violation.

Charge of unauthorized fee on retail installment contracts

OCCC examiners review contracts for the presence of unauthorized charges, such as charges for insurance or service contracts that don’t exist; “deputy fees” by dealers who aren’t actually deputized by a county tax assessor to issue tags and enter registration transactions; and documentary fees that exceed $50 without first registering with OCCC for charging a higher fee; and adding a fee for GPS devices.

Pass-through of unauthorized charges after the sale

The Texas Finance Code authorizes the addition of an actual, out-of-pocket repossession fee, or reasonable fees paid to an attorney for collection or foreclosure. It does not allow a “collection” or “door-knocker” fee and the passing through of such a fee is a violation. Similarly, charging a fee for in-house repossessions and charging more than paid for a repossession are violations.

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Once upon a time, it was difficult to convince some dealers that compliance was important.

Administrative actions against dealers were rare, and the occasional private lawsuit provided the only real test of the seriousness of violations. Those days, however, are gone. The present reality is that state and federal agencies are, on a regular basis, reviewing what goes into deal jackets and how customers are treated. We are seeing evidence that more and more attorneys are learning about the car business as a way to serve their clients who have a beef with a car dealer. The old “everyone does it,” and “it’s what I’ve always done” excuses won’t fly.

The Office of Consumer Credit Commissioner (OCCC) has been auditing dealers who have a finance license, and those who don’t (but should) for several years now. The OCCC also audits dealer finance files for issues involving use of proper forms and contracts and the proper charging of fees and finance charge, as well as compliance with the myriad of requirements and limitations found in the Texas Finance Code.

Like DMV, which primarily investigates violations as a result of consumer complaints, OCCC will perform audits based on consumer complaints. But OCCC puts more emphasis on random, routine audits with a goal of eventually performing audits of all license holders once every four years.

When an audit is based on a consumer complaint, there is a good chance that the complaint the consumer makes has nothing to do with the actual violations found.

In a typical case, the consumer complains to DMV or OCCC, or both, (usually after buyer’s remorse has set in) that the dealer refused to cancel the deal and give the customer his money back, or refused to pay for some repair.

The investigator or auditor will ask for copies of paper work from T e x a s

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the consumer (or if not available, from the dealer). Sometimes, the investigator or auditor will find no basis for the original complaint, but will find some technical deficiencies in the paperwork that become the basis for an enforcement action.

The state comptroller’s office also performs audits on dealer’s handling of state taxes. In addition to collecting and paying motor vehicle sales tax, dealers face scrutiny, as do all businesses, for paying limited sales tax on certain goods and services. Recently, some dealers have been assessed taxes and penalties for not paying sales tax on GPS devices and repossession fees.

Another set of eyes looking over the dealer’s shoulder will be that of a plaintiff ’s attorney.

Several years ago, class-action suits were filed against hundreds of Texas independent dealers claiming overcharges on contracts and failure to properly send repossession notices. Although the suits ended up being dismissed, they generated many sleepless nights and cost dealers thousands of dollars to defend.

Financing used cars, whether as a buy-here-pay-here dealer, or in special finance, is no longer a business that can be entered into on a shoestring. The worst mistake a new dealer can make is picking up the bad habits of an existing dealer. How, then, does a would-be dealer acquire the information necessary to do business in compliance with applicable laws? And how does the existing dealer determine whether he’s in compliance before a state investigator knocks on the door?

Compliance, in this age of increasing regulation, and overlapping and often contradictory laws and rules, generally comes from a focused approach to obtain information about what needs to be done, and an aggressive program to implement proper procedures. The primary source of information for any compliance program has to be TIADA, which supplies dealers with compliance information through its magazine, Annual Conference, reference books, seminars, and other educational sessions.

Just reading the list of violations in Texas Dealer is an excellent source of information about what the DMV is looking for

Recently, some dealers have been assessed taxes and penalties for not paying sales tax on GPS devices and repossession fees.

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when it investigates a dealer.

My Legal Corner column and Danny Langfield’s Regulation Matters are must reading, along with the periodic Dealer Alerts which are faxed and e-mailed from the TIADA office when there’s not enough time to include something important in the magazine. TIADA members are also eligible for a free legal consultation to answer their questions.

This year’s TIADA Annual Conference & Expo featured breakout sessions from Bill Harbeson of TxDMV Enforcement, the OCCC’s Director of Consumer Protection Rudy Aguilar and 43

Curt Swenson of the Texas Comptroller’s Office, all focused on dealer compliance issues.

TIADA also offers such compliance materials as Dealer Financing of Used Car Sales and Texas Automobile Repossession: A Lien Holder’s Legal Guide, that are offered a discount to TIADA members. Both should be read by every Texas BHPH dealer.

Compliance seminars on a variety of topics, including periodic all-day programs on compliance, are put on

by TIADA across the state. Local Chapters of TIADA also provide informative speakers and educational opportunities.

The state agencies offer brochures and copies of laws and rules which should be read for

Financing used cars, whether as a buy-here-payhere dealer, or in special finance, is no longer a business that can be entered into on a shoestring.

seminars around the state that cover a range of regulatory requirements (go to the TIADA website at txiada.com for scheduling and more information).

Compliance issues are no longer just abstract concepts for dealers to discuss in a vacuum. They are as real as the cars sold and can have a severe impact on the bottom line.

Michael W. Dunagan is an attorney in Dallas, Texas who has represented the Texas Independent Automobile Dealers Association for over 36 years. He has written a number of books and hundreds of articles for trade journals and law reviews. His clientele includes dealers, banks, finance companies, auto auctions and credit unions.

a full understanding of what is required of dealers. The DMV also puts on free dealer training

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44

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TIADA DeAler AcADemy 2013 Education Offerings for the Fall Seminar Schedule Dealer 101: Nobody Told Me That!

Keeping Your Dealership Legal & Compliant

Dealership Accounting for BHPH

Monday, September 16, 2013 – Austin Monday, November 4, 2013 – Houston

Monday, October 14, 2013 – Dallas Monday, December 2, 2013 – Austin

Wednesday, November 13, 2013 – Arlington Thursday, November 14, 2013 – Houston

8:30 a.m. - 5:00 p.m.

This class is designed for those dealers new to the business, those considering opening their own dealership, new employees, family members or anyone else needing a refresher on the basics, including: • Transferring Titles • Odometers • Title & Registration Fees • Temp Tags & Metal Dealer Plates • Requirements for Maintaining Dealer License • The Buyer’s Guide - As Is • SOLD! The Deal Jacket

9:00 a.m. - 3:30 p.m.

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

• Record Keeping • Motor Vehicle Sales Tax • Vehicle Inventory Tax • Consignment • Online Sales • Out of State / Out of Country • OCCC: the MVSF License • Federal Requirements

$149 per registrant

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

• What is the Comptrollers position on GPS units?

• Credit Card Convenience Fees – what is allowable?

• Consumer Financial Protection Bureau (CFPB) – how might it affect dealers?

• Bankruptcy – when do we have to give the vehicle back?

MEMBERS - 1st Registrant $149, each additional $99 NON-MEMBERS $299

8:30 a.m. - 12:00 p.m.

Successful BHPH accounting means more than just keeping the books clean. This session will address hot-button accounting issues as well as the overall aspects of a dealership’s financials that most affect your bottom line, including: • Key Benchmarks and Metrics • Internal Controls • Cost Analysis

• Bank Covenants • When to File the 1099-C • The Impact of Healthcare Reform

• Lease-Here, Pay-Here • Related Finance Companies • Sales Tax on GPS Units

MEMBERS - $99, includes up to 3 attendees per dealership • NON-MEMBERS $199

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

behind the wheel

Martin

Big Country Remembered

M

y favorite part of the rodeo is the memorial calf. For almost 20 years I have attended the Texas Cowboy Reunion (TCR) in Stamford, TX with my family. My wife grew up in that area and for anyone who has spent some time in the “Big Country” you know the TCR is a must come 4th of July.

The rodeo is an amateur rodeo which means you see some unusual events like the wild mare race, double mugging and the wild cow milking just to name a few.

I even participated in the wild cow milking a couple of times. I have no prize money or scars to show for my effort — the two seem to go together. The short story is I am not much of a rodeo guy. But the one event that has easily become my favorite over the years is the memorial calf. On the last day of the four day rodeo, the announcer will calm the crowd and in a very low, somber voice introduce the memorial calf. One calf is released into the arena and it will immediately sprint to the other end as if a cowboy were giving chase. As 2,000 people fall completely silent the announcer explains, “There will be no cowboy. This calf is dedicated to the memory of all the cowboys who passed away.”

Marvin Norwood was from the “Big Country.”

He was very familiar with the TCR and would ask me about it every time we saw each other. Marvin passed away this year and if we had our version of the memorial calf at the TIADA conference I would have been thinking of him. Thanks to Cal Sumrall of Cal’s Auto Sales in Abilene for providing the following obituary:

46

by Jeff

tiada executive director

Marvin H. Norwood, long time Abilene used car dealer passed away. He was born September 20th, 1935.

Marvin learned the car business working with his father, who opened Abilene Auto Sales at 834 Pine Street (then “used car row”) in 1946. The original building is still standing.

After graduating high school, Marvin attended The University of Texas and sold car parts out of a panel truck for income. He also served in the National Guard and had a successful clothing business in Dallas, but later returned to Abilene to join his father on Pine Street.

Marvin opened Fiesta Motors in 1991. His company slogan was, “The Little Bitty Lot With A Great Big Heart.”

He then went on to expand Abilene Auto Sales and started Bing Motors. In 1999, Marvin opened a dealer supply store called Flag World.

Marvin was active in many local civic organizations, including Abilene Founder’s Lions Club, The Better Business Bureau, and the Abilene Chamber of Commerce.

However, his true calling was with professional organizations including; Abilene Independent Automobile Dealers Association, NIADA and especially TIADA. Marvin was never afraid to speak his mind, often underscoring the theme of “Independent” as it pertained to used car dealers. He served on several committees and received many awards from TIADA for his service, including the Go Getter Award and was elected to the TIADA Hall of Fame in 2010.

I missed Marvin Norwood at this year’s conference, our visit about the Big Country, the auto industry and the TCR.

T e x a s

D e a l e r

September 2013

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