What Governor Abbott’s Conference Appearance Means for the Independent Automobile Dealer in Texas
Also In this Issue:
– Bud Abraham on What You Need for Proper Reconditioning – Michael W. Dunagan on Obstacles that Made Early Association Legislative Work Daunting and Rewarding – North Texas Toll Authority Frequently Asked Questions
TIADA Board of Directors PRESIDENT Mark Jones/MCMC Corporate 264 Exchange Burleson, TX 76028 PRESIDENT ELECT Ryan Winkelmann/BJ’s Autohaus 5005 Telephone Road Houston, TX 77087 CHAIRMAN OF THE BOARD Robert Beck/Stop N’ Drive Motors 711 N. General McMullen San Antonio, TX 78228 SECRETARY Eddie Hale/Neighborhood Autos PO Box 1719 Decatur TX 76234 TREASURER Vicki Davis/A-OK Auto Sales 23980 FM 1314 Porter, TX 77365 ICE PRESIDENT, WEST TEXAS V (REGION 1) Cesar Stark/S&S Motors 7699 Alameda Ave. El Paso, TX 77915 ICE PRESIDENT, FORT WORTH V (REGION 2) Chad Lancaster/Chacon Autos 11800 E. Northwest Hwy Dallas TX 75218 ICE PRESIDENT, DALLAS V (REGION 3) Greg Reine/Auto Liquidators 39670 LBJ Freeway Dallas TX 75237 ICE PRESIDENT, HOUSTON V (REGION 4) Russell Moore/Top Notch Used Cars 900 East Davis Conroe, TX 77301 ICE PRESIDENT, CENTRAL TEXAS V (REGION 5) Robert Blankenship/Texas Auto Center 6809 Suite B S IH35 Austin, TX 78744 ICE PRESIDENT, SOUTH TEXAS V (REGION 6) Armando Villarreal/McAllen Auto Sales, LLC 4215 S. 23rd St McAllen, TX 78503 ICE PRESIDENT AT LARGE V Brad Kalivoda/Fiesta Motors – Lubbock 2599 74th Street Lubbock, TX 79423 ICE PRESIDENT AT LARGE V Greg Phea/Austin Rising Fast 8024 IH 35 North Austin TX 78753 TIADA EXECUTIVE DIRECTOR Jeff Martin 9951 Anderson Mill Rd., Suite 101 Austin, TX 78750 Office Hours M-F 8:30am – 4:30pm 512.244.6060 • Fax 512.244.6218 jeff.martin@txiada.org
Vo l u m e X X I / I s s u e 10 / O c t o b e r 2 0 21
TexasDealer contents
5 Officers’ Message
by Mark Jones, TIADA President
8 TIADA Auction Directory 11 Legal Corner: Obstacles Made Early Association Legislative Work Daunting and Rewarding by Michael W. Dunagan
12 Upcoming Events 17 On The Cover: What Governor Abbott’s Conference Appearance Means for the Independent Automobile Dealer in Texas by Stephen Pallas
19 2022 TIADA Conference & Expo 20 TIADA Member Application 21 Legislator Spotlight 23 Independent Automobile Dealers Struggle to Hire and Retain Quality Employees by TIADA Staff
25 Make-Ready Costs Keeping Pressure on the Used Car Dealer by TIADA Staff
27 Right to Repair Legislation by Earl Cooke
33 What You Need for Proper Reconditioning by Bud Abraham
39 North Texas Toll Authority Frequently Asked Questions by North Texas Toll Authority
43 New Members 43 Local Chapters 45 Behind the Wheel by Jeff Martin
Did You Know? TIADA had its most successful conference ever in 2021, with over 300 dealers in attendance. The 2022 Conference & Expo will again take place at the Kalahari Resort in Round Rock. See page 19 and visit tiadaannualconference.com for more details. Notice to all members concerning services and products: TIADA was established in 1944 to develop professional standards of service and conduct for the independent auto industry. Opinions expressed herein are not necessarily those of the TIADA management, the Board of Directors or the membership. Likewise, the appearance of advertisers or their indemnifications of TIADA does not constitute endorsement of the products or services featured.
Editor: Stephen Pallas
Magazine Ad Sales: Patty Huber, 512-310-9795
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officers’ message TIADA’s Growing Influence in Austin
by Mark
Jones
MCMC Corporate (Burleson) TIADA PRESIDENT
T
his month I would like to talk with you about the massive gains that our Association has made on behalf of Independent Dealers at the State Capitol and how each one of us can collectively make sure that this trend continues into the future. “Influence” is defined as the power to make other people agree with your opinions and do what you want. When we as Independent Dealers have influence, we begin to affect the legislators, policymakers, and stakeholders that control the various situations and laws that impact our business interests on a daily basis. In my opinion, there are 3 things that we as TIADA members must do to continue to increase our growing influence in Austin. First, influence is gained through friendships. Each legislative year, our association hosts a “TIADA Day at the Capitol” that allows you to visit your hometown legislators in person. I have had the pleasure of attending several of these events and will tell you that this is a very powerful opportunity to explain the Legislative implications (for or against) of bills that are being considered that session. Of course, I would also encourage you to visit the local offices of your State Representatives and Senators when they are not in session. Letting them know that you are an active
I am very thankful for the members that contribute each month and/or year to INDEPAC. This money allows us to support legislators who share the association’s legislative positions. October 2021
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constituent in the system goes a long way in their interest of your input. Secondly, influence is gained when we have a knowledge of how the political system functions. Fortunately, we have a tremendous team at TIADA! Our crew of experts in Austin fully understand the Texas political system and every day are watching out for our industry interests both legislatively and when it comes to the state agencies that have impact on our businesses. TIADA has established genuine relationships with agencies like the OCCC, TxDMV, TxDOT, the State Comptroller’s office, and YES, even the Governor’s Office. Knowing the correct people in key positions is invaluable, and Jeff Martin and team have done a fabulous job. Lastly, a big part of what we do is support candidates who share our philosophical position. This is part of the political process and contributes to our overall success. I am very thankful for the members that contribute each month and/or year to INDEPAC. (See page 30 for this year’s list and make sure your name is there.) This money allows us to support legislators who share the association’s legislative positions. When we collectively contribute to our Political Action Committee, it enables independent dealers to speak with one strong,
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unified voice. Just like your individual business, in order to continue to grow, it takes an investment, and that is exactly what INDEPAC is. When you make a contribution to INDEPAC, it’s an investment in your industry and your business. If you have never calculated how much of an impact INDEPAC has had on your business, please go to txiada.org and visit the INDEPAC savings calculator. One of the proudest moments in TIADA’s seventy seven year history occurred this past July when Governor Greg Abbott attended and spoke to our membership in person at our Annual Summer Conference. The Governor specifically addressed many of our industry issues and concerns and he proudly shared with the audience the legislation that he had signed into law in support of Independent Dealers in Texas. Folks, no matter what side of the isle you stand on this is direct evidence that the voices of both our great association and our members are being heard loud and clear in Austin by Democrats and Republicans! Thank you fellow members for what you have done in the past, but let’s not forget how we have gotten to this point and realize that we must continue to keep doing what we are doing — and hopefully we will add some new politically active TIADA Members to our team!
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TIADA Auction Directory
Save thousands on buy or sell fees at these participating auctions! * VALID FOR SELL FEE ONLY AT INSURANCE AA LOCATIONS ** ONLINE AUCTION AVAILABLE
Abilene ALLIANCE AUTO AUCTION ABILENE
www.allianceautoauction.com 6657 US Highway 80 West, Abilene, TX 79605 325.698.4391, Fax 325.691.0263 GM: Brandon Denison Friday, 10:00 a.m.
$AVE : $200
C.M. COMPANY AUCTIONS, INC. www.cmauctions.com
2258 S. Treadaway, Abilene, TX 79602 325.677.3555, Fax 325.677.2209 GM: Gregory Chittum Thursday, 10:00 a.m. $AVE : $200
IAA ABILENE*
www.iaai.com 7700 US 277, Hawley, TX 79601 325.675.0699, Fax 325.675.5073 GM: Terrie Smith Thursday, 9:30 a.m.
$AVE : up to $200 Sell Fee
Amarillo IAA AMARILLO*
www.iaai.com 11150 S. FM 1541, Amarillo, TX 79118 806.622.1322, Fax 806.622.2678 GM: Shawn Norris Monday, 9:30 a.m.
$AVE : up to $200 Sell Fee
Austin ADESA AUSTIN
www.adesa.com 2108 Ferguson Ln, Austin, TX 78754 512.873.4000, Fax 512.873.4022 GM: Michele Arguijo Tuesday, 9:00 a.m.
$AVE : $200
ALLIANCE AUTO AUCTION AUSTIN
www.iaai.com 2191 Highway 21 West, Dale, TX 78616 512.385.3126, Fax 512.385.1141 GM: Geoffrey Rabb Tuesday, 9:00 a.m.
$AVE : up to $200 Sell Fee
METRO AUTO AUCTION AUSTIN www.metroautoauction.com 8605 Cullen Ln., Austin, TX 78748 512.282.7900, Fax 512.282.8165 GM: Brent Rhodes 3rd Saturday, monthly
$AVE : $200
Corpus Christi CORPUS CHRISTI AUTO AUCTION
www.corpuschristiautoauction.com 2149 IH-69 Access Road, Corpus Christi, TX 78380 361.767.4100, Fax 361.767.9840 GM: Hunter Dunn Friday, 10:00 a.m.
$AVE : $200
IAA CORPUS CHRISTI*
www.iaai.com 4701 Agnes Street, Corpus Christi, TX 78405 361.881.9555, Fax 361.887.8880 GM: Patricia Kohlstrand Wednesday, 9:00 a.m.
$AVE : up to $200 Sell Fee
Dallas-Ft. Worth Metroplex ADESA DALLAS
www.adesa.com 3501 Lancaster-Hutchins Rd., Hutchins, TX 75141 972.225.6000, Fax 972.284.4799 GM: Allan Wilwayco Thursday, 9:30 a.m.
$AVE : $200
ALLIANCE AUTO AUCTION DALLAS
www.allianceautoauction.com 1550 CR 107, Hutto, TX 78634 737.300.6300 GM: Brad Wilson Wednesday, 9:45 a.m.
www.allianceautoauction.com 9426 Lakefield Blvd., Dallas, TX 75220 214.646.3136, Fax 469.828.8225 GM: Robert Kersh Wednesday, 1:30 p.m.
AMERICA’S AA AUSTIN / SAN ANTONIO
AMERICA’S AA DALLAS
$AVE : $200
www.americasautoauction.com 16611 S. IH-35, Buda, TX 78610 512.268.6600, Fax 512.295.6666 GM: Jamie McCollum Tuesday, 1:30 p.m. / Thursday, 2:00 p.m.
$AVE : $200 8
IAA AUSTIN*
$AVE : $200
www.americasautoauction.com 219 N. Loop 12, Irving, TX 75061 972.445.1044, Fax 972.591.2742 GM: Ruben Figueroa Tuesday, 1:00 p.m. / Thursday, 1:00 p.m.
$AVE : $200
IAA DALLAS*
www.iaai.com 204 Mars Rd., Wilmer, TX 75172 972.525.6401, Fax 972.525.6403 GM: Joshua Boyd Wednesday, 9:00 a.m.
$AVE : up to $200 Sell Fee
IAA DFW*
www.iaai.com 4226 East Main St., Grand Prairie, TX 75050 972.522.5000, Fax 972.522.5090 GM: Robert Brown Tuesday, 9:00 a.m.
$AVE : up to $200 Sell Fee
IAA FORT WORTH NORTH*
www.iaai.com 3748 McPherson Dr., Justin, TX 76247 940.648.5541, Fax 940.648.5543 GM: Jack Panczyk Tuesday, 9:00 a.m.
$AVE : up to $200 Sell Fee
MANHEIM DALLAS**
www.manheim.com 5333 W. Kiest Blvd., Dallas, TX 75236 214.330.1800, Fax 214.339.6347 GM: Rich Curtis Wednesday, 9:00 a.m.
$AVE : $100
MANHEIM DALLAS FORT WORTH**
www.manheim.com 12101 Trinity Blvd., Fort Worth, TX 76040 817.399.4000, Fax 817.399.4251 GM: Nicole Graham-Ponce Thursday, 9:30 a.m.
$AVE : $100
METRO AUTO AUCTION DALLAS
www.metroaa.com 1836 Midway Road, Lewisville, TX 75056 972.492.0900, Fax 972.492.0944 GM: Scott Stalder Tuesday, 9:00 a.m.
$AVE : $200
El Paso EL PASO INDEPENDENT AUTO AUCTION www.epiaa.com 7930 Artcraft Rd, El Paso, TX 79932 915.587.6700, Fax 915.587.6700 GM: Luke Pidgeon Wednesday, 10:00 a.m.
$AVE : $200
IAA EL PASO*
www.iaai.com 14651 Gateway Blvd. W, El Paso, TX 79927 915.852.2489, Fax 915.852.2235 GM: Jorge Resendez Friday, 10:30 a.m.
$AVE : up to $200 Sell Fee T e x a s
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MANHEIM EL PASO
www.manheim.com 485 Coates Drive, El Paso, TX 79932 915.833.9333, Fax 915.581.9645 GM: JD Guerrero Thursday, 10:00 a.m.
$AVE : $100
IAA HOUSTON NORTH* www.iaai.com 16602 East Hardy Rd., Houston-North, TX 77032 281.443.1300, Fax 281.443.4433 GM: Aracelia Molina Thursday, 9:00 a.m.
$AVE : up to $200 Sell Fee
Harlingen/McAllen
MANHEIM HOUSTON
IAA MCALLEN*
www.iaai.com 900 N. Hutto Road, Donna, TX 78537 956.464.8393, Fax 956.464.8510 GM: Ydalia Sandoval Tuesday, 9:00 a.m.
$AVE : up to $200 Sell Fee
BIG VALLEY AUTO AUCTION**
www.bigvalleyaa.com 4315 N. Hutto Road, Donna, TX 78537 956.461.9000, Fax 956.461.9005 GM: Lisa Franz Thursday, 9:30 a.m.
www.manheim.com 14450 West Road, Houston, TX 77041 281.924.5833, Fax 281.890.7953 GM: Brian Walker Tuesday, 9:00 a.m. / Thursday 6:30 p.m.
$AVE : $100
MANHEIM TEXAS HOBBY www.manheim.com 8215 Kopman Road, Houston, TX 77061 713.649.8233, Fax 713.640.6330 GM: Darren Slack Thursday, 9:00 a.m.
$AVE : $200
$AVE : $100
Houston
Longview ALLIANCE AUTO AUCTION LONGVIEW
ADESA HOUSTON
www.adesa.com 4526 N. Sam Houston, Houston, TX 77086 281.580.1800, Fax 281.580.8030 GM: Angela Williams Wednesday, 9:00 a.m.
$AVE : $200
www.allianceautoauction.com 6000 East Loop 281, Longview, TX 75602 903.212.2955, Fax 903.212.2556 GM: Chris Barille Friday, 10:00 a.m.
$AVE : $200
AMERICA’S AA HOUSTON
www.americasautoauction.com 1826 Almeda Genoa Rd, Houston, TX 77047 281.819.3600, Fax 281.819.3601 GM: Ben Nash Thursday, 2:00 p.m.
$AVE : $200
AMERICA’S AA NORTH HOUSTON www.americasautoauction.com 1440 FM 3083, Conroe, TX 77301 936.441.2882, Fax 936.788.2842 GM: Buddy Cheney Tuesday, 1:00 p.m.
$AVE : $200
AUTONATION AUTO AUCTION - HOUSTON www.autonationautoauction.com 608 W. Mitchell Road, Houston, TX 77037 822.905.2622, Fax 281.506.3866 GM: Juan Gallo Friday, 9:30 a.m.
$AVE : $200
HOUSTON AUTO AUCTION
www.houstonautoauction.com 2000 Cavalcade, Houston, TX 77009 713.644.5566, Fax 713.644.0889 President/GM: Tim Bowers Wednesday, 11:00 a.m.
$AVE : $200
IAA LONGVIEW* www.iaai.com 5577 Highway 80 East, Longview, TX 75605 903.553.9248, Fax 903.553.0210 GM: David Cooper Thursday, 9:00 a.m.
$AVE : up to $200 Sell Fee
Lubbock IAA LUBBOCK* www.iaai.com 5311 N. CR 2000, Lubbock, TX 79415 806.747.5458, Fax 806.747.5472 GM: Lori Davee Tuesday, 9:00 a.m.
$AVE : up to $200 Sell Fee
TEXAS LONE STAR AUTO AUCTION** www.lsaalubbock.com 2706 E. Slaton Road., Lubbock, TX 79404 806.745.6606 GM: Dale Martin Wednesday, 9:30 a.m
$AVE : $75/Quarterly
Lufkin
Midland Odessa IAA PERMIAN BASIN*
www.iaai.com 701 W. 81st Street, Odessa, TX 79764 432.550.7277, Fax 432.366.8725 GM: Christopher Rogers Thursday, 11:00 a.m.
$AVE : up to $200 Sell Fee
ONLINE ACV AUCTIONS**
www.acvauctions.com 800.553.4070
$AVE : $250
E-DEALERDIRECT**
www.e-dealerdirect.com chris@edealerdirect.com
$AVE : Up to $500/month
San Antonio ADESA SAN ANTONIO
www.adesa.com 200 S. Callaghan Rd., San Antonio, TX 78227 210.434.4999, Fax 210.431.0645 GM: Clifton Sprenger Thursday, 10:00 a.m.
$AVE : $200
IAA SAN ANTONIO*
www.iaai.com 11275 S. Zarzamora, San Antonio, TX 78224 210.628.6770, Fax 210.628.6778 GM: Brian Sell Monday, 9:00 a.m.
$AVE : up to $200 Sell Fee
MANHEIM SAN ANTONIO**
www.manheim.com 2042 Ackerman Road San Antonio, TX 78219 210.661.4200, Fax 210.662.3113 GM: Mike Browning Wednesday, 9:00 a.m.
$AVE : $100
SAN ANTONIO AUTO AUCTION**
www.sanantonioautoauction.com 13510 Toepperwein Rd. San Antonio, TX 78233 210.298.5477 GM: Brandon Walston Tuesday, 10:00 a.m. / Thursday, 1:30 p.m.
$AVE : $200
Tyler GREATER TYLER AUTO AUCTION www.greatertyleraa.com 11654 Hwy 64W, Tyler, TX 75704 903.597.2800, Fax 903.597.3848 GM: Wayne Cook Tuesday, 5:00 p.m.
$AVE : $200
Waco
IAA HOUSTON*
LUFKIN DEALERS AUTO AUCTION
ALLIANCE AUTO AUCTION WACO
$AVE : up to $200 Sell Fee
$AVE : $200
$AVE : $200
www.iaai.com 2535 West. Mt. Houston, Houston, TX 77038 281.847.4700, Fax 281.847.4799 GM: Alvin Banks Wednesday, 9:00 a.m.
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www.lufkindealers.com 2109 N. John Reddit Dr., Lufkin, TX 75904 936.632.4299, Fax 936.632.4218 GM: Wayne Cook Thursday, 6:00 p.m.
www.allianceautoauction.com 15735 I-35 Frontage Road Elm Mott, TX 76640 254.829.0123, Fax 254.829.1298 GM: Christina Thomas Friday, 10:00 a.m.
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legal corner
Obstacles Made Early Association Legislative Work Daunting and Rewarding
N
ow that TIADA has completed another successful legislative session (my 23rd session in almost 45 years of representing TIADA), it would be appropriate to reflect on some of the differences between the early days in Austin and now, and what some of the challenges were then that often made the work difficult and frustrating, and some of the accomplishments that have made it all worthwhile. First, the challenges. Early on, it was a case of trying to do the impossible with little or no support or resources. The association’s budget just didn’t provide for hiring professional lobbyists. Also, although there was in place a political action committee, it rarely had the funds to actively participate in elective politics. And, because the association’s office was in Dallas until the nineties, transportation was an issue. Out of necessity, most legislative initiatives were joint efforts with other groups, especially the new car dealers. The main drawback of this approach was that sometimes the needs of each group didn’t run parallel courses and, on occasion, conflicted. Yet much was accomplished through the spirit of cooperation (even today, with a much stronger budget and lobbying program, we work with our franchised brothers on common goals in a very effective way, while agreeing to disagree in areas where we diverge). In those early years, the common response from independent dealers, when asked to contribute or
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participate in legislative matters, was that we should simply rely on other groups with common goals to do the heavy lifting. But after approaching other groups with our concerns (for instance, bank and credit union associations on title and lien protection issues), it became increasingly apparent that independent dealers, especially those who selffinanced, couldn’t rely on the other groups for help with most of the issues that were near and dear to their hearts. Many of the breadand-butter issues that affected independent dealers, such as consumer litigation and title fraud, weren’t top priorities for the financial institutions. The banks and credit unions, who primarily dealt with prime credit risks, seemed unmoved by suggestions that they get involved in legislation that would assist dealers in their relationships with subprime debtors. Fortunately, as the ranks of independent dealers grew more sophisticated, their attitudes toward the association’s mission of carrying out legislative goals, and their willingness to invest in the process, became more realistic. There is no doubt that legislative work would currently rank number one of a list of association objectives.
by Michael
Dunagan
W.
TIADA COUNSEL
With the current emphasis TIADA places on legislative action, and with adequate funding available, it’s not necessary to pass the hat to come up with the resources to move our agenda. Social activities, while still important, would fall far down the list — a reversal of sorts from earlier priorities. Here are some of the differences between then and now:
Grass Roots Participation Then. One of the most signifi-
cant improvements in the TIADA legislative effort I’ve observed in the last 45 years has been the growth of dealer-member participation in the process. There was no TIADA Day at the Capitol at the legislature in the early days. A few members who knew their 11
Upcoming Events 2021 TIADA DEALER ACADEMY Online registration available. www.txiada.org
October 18 Keeping Your BHPH Dealership Legal and Compliant Sheraton Suites Market Center 2101 N. Stemmons Fwy. Dallas, TX 75207 214.747.3000
November 16 Fast-Track Your Finances to Year-End and Beyond Maggiano’s Northpark 205 NorthPark Center Dallas, TX 75225 214.360.0707
December 6 Collect the Cash, Not the Car
Sheraton Houston Brookhollow 3000 North Loop West Houston, TX 77092 713.688.0100
OTHER TIADA EVENTS
October 25 Board of Directors Meeting Austin, TX
2022
January 24 Board of Directors Meeting Austin, TX
April 2022 25 Board of Directors Meeting Austin, TX
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legislators or senators personally might place calls on some of the topics we were interested in. But, by and large, the only boots on the ground in Austin were our association executive, our counsel (and later, when we could afford one, our lobbyist).
Now. The increase in active member participation through phone banks, gatherings at the capitol, and testifying on bills has been phenomenal, and has taken the association’s legislative efforts to a whole new level. TIADA Day at the Capitol now draws a large contingent of dealers who are able to meet with and get to know their legislators and senators, and, just as importantly, their staffs. TIADA also has software that matches our members with crucial members of the legislature so that targeted contacts can be timely made.
Effective Budgeting for Legislative Activities
Then. In my early days as association counsel there was no budget for legislative matters. Several bills that we got passed in the late 70s and early 80s were accomplished without professional lobbyists to assist. And the TIADA PAC rarely had enough to make any significant campaign contribution. One big victory was the passage of law that protected lien holders on liability insurance settlements. Prior to our efforts, insurance companies could pay a debtor for property damage to the collateral without including the lienholder on the check, and the lien holder had no remedy if the debtor absconded with the money. This new law allowed recorded lien holders to make liability insurance companies pay again if they failed to protect the lien holder’s position. The second issue we succeeded in attacking was the absence of any notice requirement to lien holders on most storage charges. We were
able to get a notice requirement and, in most involuntary towing situations, to limit storage charges to five days in until notice was sent. It is worthy of note that one of the most important legislative efforts undertaken for independent dealers, the creation of deferred sales tax, was funded by individual dealer donations to a dedicated fund set up for that sole purpose. With no legislative budget back then, it was incumbent on dealers to raise the funds necessary to hire lobbyists for single-purpose programs.
Now. With the current emphasis TIADA places on legislative action, and with adequate funding available, it’s not necessary to pass the hat to come up with the resources to move our agenda. Being able to have a lobbyist with several sessions of TIADA experience (such as our current legislative specialist, Mario Martinez), means continuity in our legislative agenda and ongoing momentum in our contacts at the capitol. The PAC is now much better funded and able to participate in campaigns in a significant way. All of this has led TIADA to become more recognized and more respected, and thus more legislatively effective.
Focus on Legislative Issues
Then. Any legislative agenda was usually drawn up just before legislative session began. This practice often resulted in a last-minute scramble to draft bills and enlist the support of bill sponsors. Now. While TIADA may not rank
with the most powerful groups at the legislature, its reputation and ability to effectively carry out members’ goals have soared in the last few sessions. Executive Director Jeff Martin and his staff know the importance of legislative work and allocate their resources and time accordingly. T e x a s
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Despite the fact that the legislature is in session only six months every two years, TIADA’s legislative work goes on year-round with advance planning to avoid surprises. Plus, Martin and his staff understand and participate in the state agency rule-making process, which can often have as great an impact on dealers as laws passed by the legislature. Martin is also assisted by a professional lobbyist and many active dealer-members who will appear at the capitol on short notice and express their views to their representatives or even testify before committees, if necessary. The high level of organization also makes it easier to mount an attack on proposed legislation that is considered to be detrimental to our members’ interests. While the differences between then and now are monumental, there were some successes that were achieved despite the lack of horsepower and resources in the past, and a number of important bills were passed by TIADA that have made a difference in the ability of dealers to succeed and maintain profitability. Among the most memorable:
Plaster, with the help of Roy Carlson of Fort Worth and Don Fincher of Houston, and too many others to name, raised the necessary money, and undertook to achieve what has been described as an impossible task (we were told by many knowledgeable and experienced legislative operatives that what we were trying to accomplish couldn’t be done). After a series of meetings with Comptroller and DMV staffers, we came up with a plan that would benefit not only BHPH dealers, but
the state as well. Comptroller John Sharp signed off on the deferredsales-tax approach for seller-finance dealers, which eliminated the last obstacle. After the tax reform bill passed and went into effect, TIADA’s membership shot up to one of its highest levels ever. Many, if not most, BHPH dealers probably don’t even know that there was a time when deferred sales tax didn’t exist. Those dealers who led the charge deserve our heart-felt appreciation.
SALES TAX REFORM ACT OF 1993
For years, Texas buy-here-payhere dealers faced an unpleasant dilemma: (1) advance 100 per cent of sales tax up front and lose profitability; or (2) don’t pay sales tax up front and risk being put out of business by a sales tax audit. Many dealers took their chances with the latter option and got caught, resulting in several million-dollar assessments. One dealer faced a felony criminal charge for not transferring deals that went bad. The late Jim Watson of Dallas knew there had to be a better way. Watson organized the Fair Tax Committee and convinced Bill Plaster of Dallas to chair it. Facing impossible odds, Watson and October 2021
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LIABILITY INSURANCE PROTECTION
Prior to 1989, vehicle lien holders had no legal claim to insurance proceeds paid to their customers by liability insurance carriers. With damaged collateral and a debtor flush with insurance money to buy another car, the lien holder was left holding the bag. But in 1989 TIADA sponsored legislation that placed a lien on liability proceeds for recorded lien holders. In terms of benefit-to-cost, this bill surely ranks up there as dealers have collected untold amounts that would have been lost under prior law. Our law firm has and does regularly collect claims from unbelieving insurance companies for a dealer/lien holder who had been excluded from the initial settlement check.
DEFERRED SALES TAX TREATMENT FOR RELATED FINANCE COMPANIES
After passage of the 1993 tax reform bill, BHPH dealers were able to avoid fronting sales tax at the time of transfer and would only have to submit sales tax on amounts actually collected, and pay no tax on unpaid balances. At about the same time, another problem arose when the U.S. Internal Revenue Service ruled that dealers who financed sales would have to use the accrual method of accounting for income (as opposed to the cash method which most dealers had used). This meant that the entire amount of a contract would have to be taken into income in the year in which it was 14
TIADA proposed legislation in the 2007 session of the Texas Legislature that would allow a finance company with at least 80 per cent common ownership with a dealership to continue to defer sales tax on assignments taken from that dealership. signed. This change resulted a substantial increase in the amount of income tax owed. Although a deduction could later be taken on bad debt, many dealers were forced to take out large loans to pay income tax on uncollected receivables. T e x a s
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To counter the burdens of having to advance large amounts of income tax, some dealers set up separate corporations to sell receivables to at a discount. This process reduced the over-all tax obligation since the finance company could use the cash basis of accounting. A provision in the original deferred-sales-tax law required acceleration of sales tax on retail installment contracts that were sold or assigned to third parties. This provision was intended to limit deferred sales tax to dealers who selffinanced. Unfortunately, the Texas Comptroller’s Office took the position that assignment of receivables
taken from that dealership. The TIADA bill was passed and signed by the governor, in effect saving BHPH dealers with related finance companies huge amounts of both sales and income taxes.
A MODEL OF SUCCESS
The growth and maturing of TIADA’s legislative program have served as a model of what can be achieved with proper planning and the will to succeed. Recent sessions have produced impressive results that have benefitted TIADA members, including, to name just a few, mechanic’s lien restrictions, protections for lien holders from limited property damage insurance policies, improvements to the documentary fee process, and extension of transfer times on titles. And many detrimental bills have been thwarted. But nothing can take away the satisfaction of accomplishing in the early days so much with so little. And the occasional acknowledgment from someone recognizing what was achieved has made those victories even sweeter.
...The TIADA bill was passed and signed by the governor, in effect saving BHPH dealers with related finance companies huge amounts of both sales and income taxes. to a separate corporation, even if it had identical stock ownership to the dealership, caused the loss of deferred sales tax treatment. The dealer was then required to accelerate sales tax on each of the assigned contracts, in effect offsetting the federal income tax advantage of having a related finance company. To overcome this dilemma, TIADA proposed legislation in the 2007 session of the Texas Legislature that would allow a finance company with at least 80 per cent common ownership with a dealership to continue to defer sales tax on assignments October 2021
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635 Fritz Dr. Ste 210 Coppell, TX 75019 469-637-0150
Michael W. Dunagan is an attorney in Dallas, Texas who has represented the Texas Independent Automobile Dealers Association for over 40 years. He has written a number of books and hundreds of articles for trade journals and law reviews. His clientele includes dealers, banks, finance companies, auto auctions and credit unions. 15
Keeping Your BHPH Dealership Legal & Compliant Dealer Academy Presenter
$249 Members, Each Additional $199
One of the quickest ways to ruin a dealership’s profit margin is to be hit with a fine from a regulatory agency, or to lose a lawsuit filed by a customer. This seminar will focus on the practical side of compliance that understands you have a business to run — and you want to run it right. This seminar from TIADA attorney Michael W. Dunagan is the final answer in BHPH compliance. Mike speaks dealer, and with 40 years of experience representing hundreds of BHPH dealers, he knows your business inside and out. Attend this workshop and learn all about: • Properly handling f inancing • How to prepare for (and on repairs survive) an OCCC exam • Real-life DTPA court cases • What to do when the Bankruptcy Notice arrives • Body shops, mechanics, towing and storage issues • Repossessions: f rom A to Z • Specif ic lien-protection steps • TxDMV Enforcement – Title Management Issues • Federal regulations affecting BHPH dealers • Most common advertising violations • Alternatives to traditional insurance • Your right to insurance proceeds • Most common OCCC customer complaints • Using the courts to get your car back • How to respond to an attorney demand letter • Procedures to stay off the CFPB’s radar • Dealer issues in Comptroller audits • Techniques to avoid consumer lawsuits
$499 Non-members
Monday, October 18, 2021
Sponsors
Sheraton Suites Market Center 2101 N. Stemmons Fwy. | Dallas, TX 75207 214.747.3000
Michael W. Dunagan,
TIADA General Counsel, author of Dealer Financing of Used Car Sales and Texas Automobile Repossession: A Lien Holder’s Legal Guide.
Time
9:00am - 4:00pm
Cost
(must be from same dealership)
Dallas, Texas
To register visit
Txiada.org or by phone at 512.244.6060.
on the cover by Stephen Pallas
TIADA Director of Marketing and Communications
What Governor Abbott’s Conference Appearance Means for the Independent Automobile Dealer in Texas
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s you are probably aware by now, Governor Abbott attended and spoke at this year’s TIADA Conference and Expo. His appearance was an exciting opportunity to have a sitting governor join in celebrating the independent automobile dealer industry and the issues that affect used car dealers across the state of Texas. That Governor Abbott took the time to speak to our members means a lot to the association and the work we
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In Governor Abbott’s speech, he highlighted the state’s efforts to reduce unnecessary regulations on small businesses like those of our association members and that TIADA works tirelessly with legislators to prevent.
do every day to promote legislation that benefits the industry and protect dealers from legislation that may harm their businesses. The other thing that the Governor’s appearance indicates is that the industry has a strong voice within the state legislature. TIADA conducts itself in such a manner that legislators at every level — Democrats and Republicans — want to hear from us. We dedicate ourselves to being strong advocates 17
for the independent automobile dealer and, because of that commitment, we have earned a seat at the table when it comes to passing or rejecting legislation in Austin. “His appearance at our conference was awesome,” said Cesar Stark, of S&S Motors in El Paso. “It only speaks very highly of TIADA and the importance of our industry to the Governor and our state.” Governor Abbott acknowledged how important the independent automobile industry is to the overall Texas economy. Many dealers in attendance at the conference seemed to appreciate this recognition of their hard work. The Governor also recognized the used car dealer as a significant part of keeping the labor force in the state viable. “I love the fact that he said before COVID Texas was the 12th largest economy in the world, and the 11th since COVID,” said Casey Cotton, of CBEM Classics in Austin. “For the BHPH guys, they are assisting people in getting to work so they can feed their families. So, having that presence there and having that recognized at the highest level of the state is important. If all the independent dealers shut their doors, it would be a bad deal.” Governor Abbott emphasized during his speech that he is committed to small businesses in the state, and he showed his concern for our interests as independent
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automobile dealers by taking the time to speak with us at the conference. This should not be overlooked, since small businesses make up nearly half of the country’s entire workforce and economic activity. Similarly, small businesses are in many ways the lifeblood of the Texas economy. Many dealers, even those outside of Texas, felt energized by the level of support he offered to the independent automobile dealer. “It speaks volumes of TIADA to be able to have that sort of pull, to have the governor’s ear that much that he’s going to come up on stage in front of a bunch of independent automobile dealers and declare his support for them,” said Mark Weida, who is the owner of Street Smart Auto Brokers in Colorado and the President of the Colorado Independent Automobile Dealers Association. “To have an association with that kind of strength and alliance with the Governor is amazing.” Governor Abbott recognizes that independent automobile dealers are part of a larger economic picture in Texas, which is home to 2.7 million small businesses and 4.7 million small business employees. And, since getting to work in Texas means owning a car, the vast majority of these small-business workers have relied, at one time or another, on the used car industry to get to and from their place of employment. This is why it is so meaningful to have had Governor Abbott attend our conference in 2021. One of the biggest issues always facing the independent automobile dealer is government regulation. In Governor Abbott’s speech, he highlighted the state’s efforts to reduce unnecessary regulations on small businesses like those of our association members and that TIADA works tirelessly with legislators to prevent. Cesar Stark reiterated the importance of these issues. Stark took away the from Governor’s speech his commitment to “fewer regulations and more pro-business” legislation for the independent automobile industry. By working closely with state officials, TIADA has earned close relationships with members of both parties to make it easier for businesses to conduct their operations and maintain state compliance standards without too much government interference. At the end of the day, Governor Abbott’s appearance at this year’s TIADA Conference & Expo represents to TIADA that the issues that matter to independent automobile dealers across the state have a voice at the capitol. While it is important to recognize the significance of this occasion, it also remains clear that the association will continue to defend the industry, promote common sense legislation, and build strong relationships with our state legislators. T e x a s
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SAVE THE DATE
July 24-26,
2022
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TIADA texas independent automobile dealers association
Become a TIADA Member Business Name: ____________________________________________ Select one:
Dealer Member
Associate Member
Contact Person: ____________________________________________ Address: __________________________________________________ City: _________________________________________ State: _______ Zip: __________________ County: _____________________________ E-mail address: _____________________________________________ Business Phone: _______________________ Fax: ________________________ Cell Phone: ___________________________________________ Dealer P Number: ___________________________________________
TIADA texas independent automobile dealers association
Membership Dues: $499 New Member
Good through 12/31/2022. Pay full amount today and receive the rest of 2021 for free.
Renewing Member
good through 12/31/2021. Dues include NIADA and local chapter membership where applicable.
Who referred you to TIADA? __________________________________ Mailing Address (if different from above): __________________________________________________________ City: _________________________ State: _______ Zip: ___________
PLEASE INDICATE PAYMENT METHOD: Check or Money Order payable to TIADA Check # __________ Credit Card Card Number: __________________________________________________ Sec.Code: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Expiration Date: ____________ Monthly Payments - $41.58 per month Via Credit Card (Please enter card information above) Via Bank Draft (Authorization Agreement 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.org
512.244.6060
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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legislator spotlight Senator Kel Seliger was first elected to the Texas Senate in 2004. Senate District 31 spans 37 counties from the Panhandle to the Permian Basin and includes Amarillo, Midland, Odessa, and Big Spring. Born in Amarillo and raised in Borger, Senator Seliger is a graduate of Borger public schools and Dartmouth College. He spent 35 years in the steel industry. Senator Seliger currently serves as Vice-Chair of the Senate Transportation Committee and sits on the Senate Committees for Health & Human Services, Natural Resources & Economic Development, Veteran Affairs & Border Security, and Nominations. Prior to his election to the Senate, Seliger served four terms as Mayor of Amarillo and as a member of the Amarillo City Commission and the Amarillo Civil Service Commission. He and his wife, Nancy, reside in Amarillo, and have two sons, Jonathan and Matthew, and a granddaughter, Collins Gray Seliger. Texas Dealer: What inspired you to run for public office?
Sen. Seliger: I’ve always been interested in
government and my wife and I were always active in public service. I was first elected to the city council in 1989. I have always believed that local government should act like a business and perform like a service provider.
you read and have an open mind to new ideas. It’s also important to be able to speak clearly and to respect that your colleagues are well-intentioned.
TD: What do you think
makes Senate District 31 so unique? Sen. Seliger: To start off with, the district is larger than the state of Indiana, so it’s really big and economically diverse. The district is also the most productive agricultural area of the state, as well as the largest oil and gas producer. I make at least one visit to each county every year, so I get to visit with all kinds of people working really hard in these areas.
TD: What problem or policy do you think deserves more attention?
Sen. Seliger: Public education is the number one
issue that I think about. The future of the state of Texas is sitting in the classrooms today, and it is important that we focus on keeping kids in the classrooms and preparing them for the future. I believe in promoting sound policy that promotes equality and policies that best serve the entire state of Texas.
TD: What is the biggest challenge facing small business owners today?
Sen. Seliger: The biggest challenge for businesses
TD: What skills do you utilize most frequently at the
is stability in the economy. Big fluctuations are really, really threatening, and so it’s important to think about how we can provide stability and as little regulation as we can apply — as little government as possible.
Sen. Seliger: The most important thing to have is
TD: What is the Texas Senate Transportation
Capitol?
interpersonal skills — the ability and willingness to listen to other people. You have to understand what October 2021
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Committee working on currently and in the near future? 21
Sen. Seliger: A lot of commodities in West Texas
need to be transported far and wide. We need to fund a system that is not only growing, but also maintain the one that we have. It is also absolutely critical that we pay for transportation infrastructure through the vehicle registration tax. As we collect less gas tax, we need to come up with ways for everyone to pay equally. And that means implementing an electric car registration fee.
TD: Do you have any final thoughts for our readers? Sen. Seliger: As someone with personal experience, a lot of things we do at the Legislature affect small businesses owners, so please stay engaged with your elected officials, participate in the process, and don’t forget to vote. #TXLegislatorSpotlight
TD: Why is serving on this committee so
important to you? Sen. Seliger: Transportation is so important to everyone in the state of Texas. Everyone must have access to an efficient transportation system in a state spanning over a quarter of a million square miles.
TD: What was the first vehicle you owned? Sen. Seliger: I had a 1964 Buick Special
that my dad bought in 1967. I shared it with my brother until we drove it into the ground.
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feature
Independent Automobile Dealers Struggle to Hire and Retain Quality Employees by TIADA Staff
S
mall businesses in Texas are having immense trouble properly motivating people to return to work. In cities and towns across the state, you will encounter help-wanted signs on more business doors than ever before in recent memory. Workers are simply not willing to return to entry-level work for entrylevel pay. The biggest issue for many Texas independent automobile dealers is finding available workers. One common misunderstanding about these businesses is that they are making more money during the pandemic. In fact, while used automobile prices are at record highs, new car dealers have much higher margins, a fact which is truer now than ever before. This means that dealers struggle to acquire and retain sales staff. Additionally, dealerships are finding it nearly impossible to find and keep quality technical and mechanical workers on their payrolls. Over the past several months, dealers are not only having trouble finding new employees, but also retaining the ones they already have on staff. According to Sam Sinno, of Apple Sport Imports in Austin, there are a lot of people taking retirement that didn’t need to work. “We’ve lost a lot of the employment population,” Sinno said. Independent automobile dealers have tried various strategies to lure new workers, from higher up-front wages, flexible schedules, and even removing drug tests for marijuana. Dealers are trying everything to find employees, from in-person job fairs to outreach on social media. None of it seems to be working in 2021. “We’re giving anybody who seems willing to work a shot,” said April Hanson with Coast to Coast Motors in Houston. Dealers across the state are offering generous incentives to attract new talent into their businesses. But they have also had to sacrifice a bit when it comes to the
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kinds of workers they are willing to hire and train. As most business owners are aware, training employees can often be a difficult and lengthy process. “People don’t always like to put in the effort to bring people along and we’re just going to have to do that if we’re going to have good employees,” Hanson said. Hanson emphasized that dealers willing to recruit and train new employees without the usual credentials and experience will actually find themselves surprised by the results. “Honestly, we’ve had quite a few success stories,” she said. “People didn’t know they could sell a car, and they can.” Forbes recently reported that a boom in automation is likely to occur from this labor crisis. Sinno explains that this will not necessarily translate to the car dealership. “When you take in a lot of the industry, all industries, they all require people. Everyone is hiring.” One big takeaway here is that while automobile dealerships struggle through the labor shortage, there has not seemed to be any relief, even as the federal stimulus package runs out. “I don’t know what the answer is because we’re trying everything and none of it is working,” Sinno said. While some economists have hope that the end is in sight, dealers are doing everything they can to keep their doors open in the meantime. 23
feature
Make-Ready Costs Keeping Pressure on the Used Car Dealer by TIADA Staff
U
sed automobile prices saw a surge in 2021. While many industry analysts predicted over the summer that these prices would cool off as the year went on, several factors have contributed to these record high numbers. Now, many are predicting that levels might not become normal again until 2023 or beyond. Everyone is aware by now that a shortage of semiconductor chips has stalled production of new vehicles, and it’s no secret that this has had a huge impact on the industry. One thing that is being overlooked, however, is that there is a wider global parts shortage in many other aspects related to car manufacturing. In August of 2021, Toyota announced it was cutting production by no less than 40% in Japan and North America through October. For the independent automobile dealer, these shortages have caused a spike in make-ready costs. One important misconception surrounding all of this is that the public generally believes these inflated used automobile prices means record profits for the used car dealer. This could not be further from the truth. In fact, according to Shawn Ramon of Superior Auto Sales in Beeville, the availability and rising cost of parts and materials (even for something as simple as paint) and increased auction fees, among other factors, are putting pressure on these dealers. “People are forgetting about flooring fees transport fees, auction fees, and inspection fees,” all of which factors into a dealer’s make-ready costs, Ramon said. Rising diesel fuel costs, for example, and having to drive further to acquire vehicles puts extra strain on these dealers and their transport drivers, who also are not making enough money.
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“I’ve been in the business for 20 years, and I’ve never seen it like this,” Ramon said. “Every week, every month, we’re just trying to keep our head above water.” Dealers are also spending much more on labor hours since the pandemic began, according to Jeff Stevens of Xtra Auto Center in Pampa. Parts have become incredibly difficult to acquire, and dealers are looking at increases across the board. Because of these rising costs and availability of quality inventory, the average cost per vehicle of the used automobile is going up dramatically. Franchise dealers are holding onto their used inventories for much longer than they used to, so independent automobile dealers are forced to purchase more as-is units at a premium, and these vehicles generate less interest for the consumer. While economists and industry analysts busy themselves predicting where the market is going, the everyday reality of the used automobile dealer remains incredibly tense. “Everybody wants to know when this is going to straighten up, but no one knows what’s going to happen,” said Stevens. “We just keep our head down and keep plugging away.” 25
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regulation matters
Right to Repair Legislation
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t both the federal level and in several states, lawmakers are actively pursuing “Right to Repair” or “Fair Repair” legislation. Right to Repair legislation looks to enable consumers and independent repair facilities with the ability to choose who, what, where, why, when, how, and for how much their equipment is to be repaired by requiring manufacturers to provide independent repairers data access. Right to repair legislation varies but can cover everything from McDonald’s ice cream machines, medical equipment, smart phones, agricultural equipment and most importantly for our industry automobiles. The most common example used in the automotive industry is ensuring an independent repair shop has access to codes that help mechanics diagnose issues with the automobile.
by Earl
Cooke
TIADA DIRECTOR OF COMPLIANCE AND BUSINESS DEVELOPMENT
Passing the First Right to Repair Law
The first legislation introduced at the federal level was championed by Texas Representative Joe Barton. Rep. Barton introduced both the “Motor Vehicle Owners’ Right to Repair Act of 2001” and “Motor Vehicle Owners’ Right to Repair Act of 2003”. In 2001 Rep. Barton had 53 cosponsors, but by 2003 the list of cosponsors grew to 117. The intent of the bill is probably best summed up by the Congressional findings in the bill, which were: The ability to diagnose, service, and repair a motor vehicle in a timely, reliable, and affordable manner is essential to the safety and well-being of automotive consumers in the United States. Consumers are entitled to choose among competing repair facilities for the convenient, reliable, and affordable repair of their motor vehicles. Increased competition among repair facilities will benefit vehicle owners in the United States. October 2021
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Computers of various kinds are increasingly being used in motor vehicle systems, such as pollution control, transmission, antilock brakes, electronic and mechanical systems, heating and air-conditioning, sound, and steering. The diagnosis, service, and repair of these vehicle sys tems are essential to the safety and proper operation of modern motor vehicles. In many instances, access codes prevent owners from making, or having made, the necessary diagnosis, service, and repair of their motor vehicles in a timely, convenient, reliable, and affordable manner. Consumers in the United States have benefited from the availability of an aftermarket parts supply, or parts and accessories used in the repair, maintenance, 27
or enhancement of a motor vehicle. The American economy has also benefitted from the availability of an aftermarket parts supply that provides jobs to over 5 million workers in 495,000 businesses, and generates $200 billion in annual sales. Vehicle owners in the United States should have the right — to all information necessary to allow the diagnosis, service, and repair of their vehicles; t o choose between original parts and aftermarket parts when repairing their motor vehicles; and t o make, or have made, repairs necessary to keep their vehicles in reasonably good and serviceable condition during the expected vehicle life. The restriction of vehicle repair information limits who can repair motor vehicles and what parts may be used to repair those vehicles, which limits consumer choice and thus limits competition. The Congress has provided the Federal Trade Commission with broad authority to make and enforce rules to foster competition, to prevent unfair methods of competition in commerce, and to protect consumers. Ultimately, the federal right to repair bills failed to leave committee after being introduced and the debate on right to repair moved on to the state level. Several states started introducing legislation on right to repair with little success. Then in 2012 Massachusetts had a ballot initiative known as Question 1 or the Massachusetts “Right to Repair” Initiative. The initiative essentially required automobile manufacturers to offer the same access to diagnostic and repair information as the manufacturer made available to their dealers and authorized repair facilities. The initiative passed on November 6, 2012 with 86% of voters supporting it. 28
The Massachusetts Compromise
After the law in Massachusetts passed, the Automotive Aftermarket Industry Association (AAIA) and the Coalition for Auto Repair Equality (CARE) worked with the vehicle manufacturers
repair shops needed to repair vehicles. After attempting to gain access by working with the manufacturers, the advocates for right to repair went back to the Massachusetts voters to pass a law that included access to diagnostic information through wireless technology, espe-
represented by the Alliance of Automobile Manufacturers and the Global Automakers to establish a Memorandum of Understanding (MOU) that extended the Massachusetts law to all light vehicles nationwide. As part of that MOU, AAIA and CARE agreed to work on implementing the MOU through 2018 and to oppose other state efforts while they worked with car companies to implement the MOU. The MOU included a carveout for telematics. Telematics is a communication technology that allows for information created by vehicles to flow to wireless networks. At the time telematics was not heavily used for vehicle diagnostic, but that has changed. With the change in technology, the advocates for Right to Repair felt the manufacturers were no longer providing all the necessary information independent
cially for vehicles that no longer had a plug-in for a code reader. The new Massachusetts Question 1, the “Right to Repair Law” Vehicle Data Access Requirement Initiative was put on the November 3, 2020 ballot. This initiative amended the previous right to repair law by requiring manufacturers to install a standardized open data platform beginning with the model year 2022. Both sides spent approximately $25 million to get their message to the voters. In the end 75% of the voters in Massachusetts supported the legislation. After its passage, the Alliance for Automotive Innovation sued Healey (Massachusetts Attorney General) alleging the law is unenforceable because it conflicts with federal law and the Constitution and “makes personal driving data available to third parties with no T e x a s
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safeguards to protect core vehicle functions and consumers’ private information or physical safety.” A ruling is expected November 2, 2021, however it is expected that an appeal will be filed by the nonprevailing party. Also, it seems highly unlikely that a compromise will be reached to address the other states at this time.
Federal Developments
Some significant movement on right to repair has occurred at the federal level as well. On July 16, 2019, the Federal Trade Commission hosted a half-day Workshop to examine the ways in which manufacturers may limit third-party repairs. The final panel of the Workshop featured Aaron Lowe, senior vice president of regulatory and government affairs at the Auto Care Association, two state senators who have introduced right to repair legislation, and two other right to repair advocates. I reached out to Aaron Lowe, and he offered the following about right to repair “This affects everyone that drives a car and fixes a car. This is all about a level playing field. People want to have the right to get their car fixed by their independent repair shop.” In May, the FTC released a report entitled “Nixing the Fix” with findings from the Workshop. A few of the significant findings were manufacturers steer the customers to favored shops, disparage nonOEM parts and Independent Repair Services, and commit “VIN burning” — the practice of limiting a control module to function with a single vehicle identification to have vehicle software make parts unusable for a different vehicle. The recommendations of the report were to use FTC Rulemaking to declare certain types of repair restrictions illegal, have industries self-regulate as the automotive industry did in the past and increasing consumer awareness by creating and publishing repair scores of OEMs. October 2021
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On July 9, 2021, President Biden issued “Executive Order Promoting Competition in the American Economy.” Part of that executive order addresses right to repair. On July 21, 2021, the FTC commission unanimously adopted a policy statement aimed at restoring right to repair for small businesses, workers, consumers, and government entities. Legislation is expected to be introduced at the federal level.
TIADA’s legislative team will work closely with NIADA to keep you abreast on right to repair and call on you to act when needed. Additionally, TIADA plans to have numerous conversations with our counterparts in other states, independent dealers with repair shops, independent dealers without repair shops, and other stakeholders between now and Texas’s next legislative session.
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Please fill out the form on the next page to help our efforts out at the Capitol!
Join the list of those who have already contributed for 2021.
Contributions Year-to-Date
as of September 2021
Greig, Steven J. Hale, Eddie Jones, Mark Gregory, Tommy * Blankenship, Robert Ingram, Blake Reine, Greg Murphy, Bill Hagler, Keith * Allen, Scott Scott, Paul Torres, Cesar H. Zak, Gregory * Donnelly, Chris * Cowan, Donny Atchison, Jeff Beck, Robert
$5,000 $5,000 $2,900 $2,700 $2,500 $2,500 $2,500 $1,750 $1,125 $1,000 $1,000 $1,000 $1,000 $700 $600 $500 $500
Brown, Mark Chapman, Kyle Cockerell, Clint Davis, Vicki Edenfield, Robert * Kalivoda, Brad Kirwan, Christopher Martin, Jeff Martinez, Mario Rhodes, Brent Smith, Jerry and DeDe Zak, Michael Moore, Russell * Lloyd, Raymond Milligan, Robert Winkelmann, Ryan * Cooke, Earl
$500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $450 $425 $425 $400 $250
Jeffers, Robert Lazo, Deyla Macheca, Chris Moore, Gerald (G.R.) Petersen, Shaun Frappier, John Hanson, April * Caldwell, Steven Burke, Steve Hobson, James Levine, Stephen Phea, Greg Vara, Jose Wilson, Erik Nwankwo, Chinweuba
$250 $250 $250 $250 $250 $200 $200 $150 $100 $100 $100 $100 $100 $100 $50
*Monthly Donor
Total Contributions to Date 30
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Or donate online at www.txiada.org >> Resources >> Advocacy >> Political Action Committee ______________________________________________________________________________________ Referred by:
c/o TIADA 9951 Anderson Mill Rd Suite 101 Austin Texas 78750 PHONE
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512.244.6060 FAX 512.244.6218 EMAIL accounting@txiada.org
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Fast-Track Your Finances to Year-End and Beyond Dealer Academy Presenter
Join us for this four-hour event, Collin Kanelakos, CPA, LGT Dealer Services Group lead partner, as well as knowledgeable team members, will be presenting best practices that can successfully build a plan for your dealership to secure your finances and tax benefits to help you grow. Throughout the presentation we will be presenting on: • Year-End Tax Planning Best Practices for BHPH and Retail-Used Dealers
Collin Kanelakos, CPA LGT Dealer Services Group Lead Partner
Time
9:00am - 1:00pm
Cost
• Managing and Financial Reporting for Growth • Sales and Franchise Tax Best Practices • Succession and Estate Planning for Dealers We will close with a Q&A and Networking luncheon at the end.
Lunch is Included!
$99 Members, Each Additional $49
(must be from same dealership)
$199 Non-members
Sponsors
Tuesday, November 16, 2021 Dallas, Texas Maggiano’s Little Italy Northpark 205 NorthPark Center | Dallas, TX 75225 214.360.0707
To register visit 32
Txiada.org
or by phone at 512.244.6060. T e x a s
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What You Need for Proper Reconditioning by Bud Abraham Auto Remarketing
I
t seems dealers are looking for a magic wand they can wave to have a perfect reconditioning department. Unfortunately, that’s not the way it works. There are a number of things necessary for a proper reconditioning department; things that are easy to identify, but difficult it seems for the auto dealer to grasp. What is needed for a proper reconditioning department is the implementation of what we call the “Principles of Production” for an automotive service department. These principles are easily recognized, but seemingly difficult for the dealer to implement. They are as follows: Management Personnel Facilities Equipment Materials Since it is impossible to write extensively on each one of the Principles, what we will do is briefly discuss four of the Principles and focus the article on personnel and their training.
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Management
Probably the biggest downfall for dealers with the reconditioning department is in the area of management, which in any business or department is the key factor in success. The problem in dealerships is attitude. Everyone in the dealership from the top down has the attitude that the detail department is that of the “red-headed” stepchild that no one wants to acknowledge. Some call it the “Cinderella of the Dealership”, and it looks and operates that way because of poor management. Let me explain. The dealer principal or general manager usually gives responsibility for the department either to the fixed operations manager, service manager, body shop manager, or in some cases, the used-car manager. This tends to be a mistake. Why? Because, in most cases, those managers have their hands already full running their respective departments, and detailing becomes a burden to them. Further, very few of these managers even know what to manage in a reconditioning department in order to insure that it operates efficiently and profitably. Most have no idea of what equipment, chemicals and supplies 33
are needed to properly operate the department. They also do not know what procedures the detailers should be following to properly detail a vehicle. Need I say more? The next mistake that is made in dealerships is to appoint the “best detailer” or the “detailer with the longest tenure” as the manager. The problem with this is that the person is a “detailer”, not a manager. His or her skill is in detailing cars not managing. This person does not know how to manage or what to
manage, and as a result, little management is done. The shop manager is detailing cars rather than managing.
2
Personnel
This portion of the article will deal with hiring the right people and the necessity for training them. That is, if you expect them to perform as most dealers would want them to perform. You must know how to hire, and once hired, you must have a
training program that will result in the performance you are looking for and this takes a commitment on the part of management. That is the fixed operations manager, or service manager, or whomever the dealership has in charge of the department. In addition, having a shop manager who knows how to manage is key, which involves training and monitoring the personnel. To insure employee training for a dealership reconditioning department is effective you need to selectively hire employees. You cannot hire the untrainable and expect them to be receptive to training that requires them to change. Most experienced detailers are not trainable. You also need a good manager, not a detailer, a manager who is committed to an efficiently operated department (as mentioned before). Auto detailing is a labor-intensive business, and with the primitive technology used in most dealership reconditioning departments, you have to focus on efficiency. Even with the equipment and organizational advances that are available, few dealerships have them, and even those that do still have to insure they are used.
3 .
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Facilities
In many dealerships, the reconditioning department is put where there is extra space in the building. Little attention is paid to what is needed for lighting and proper flow. If you have this kind of facility, it will be hard to gain the efficiency that is desired. That said, we do find that today many new dealerships and those being built are dedicating good space to the detail department. The number of bays in the reconditioning department should relate the number of vehicles to process, on average, per day. For example, if the reconditioning department is to process 10 or more cars per day, then there should be at least four detail bays and one T e x a s
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preps, car “make readys,” car deliveries and the service customer’s washes. As you can see, a great deal of thought needs to go into the amount of space being dedicated to the reconditioning department. A final word, do not, I emphasize, do not wash cars in the same area as you are cleaning the interiors and buffing and polishing the paint.
4 wash bay for engines, wheels and body wash. This is true even if there is an automatic car wash, because the engine and wheels have to be hand cleaned, and this should not be done at the entrance to the car wash, which will hold up flow to the
wash, and put grease and grime into the car wash reclaim system. If there is no automatic car wash and the dealer is washing every service customer’s car, then you will need at least two or more wash bays to handle both the reconditioning
Equipment
In the past, and unfortunately, still today in many dealerships’ reconditioning departments, the equipment used is, to say the least, primitive. In fact, it’s not much better than what was used in the 1950s. A shop vacuum; 10-pound electric buffer; a few brushes, rags, and chemicals diluted by hand and placed in plastic spray bottles and plastic ketchup bottles. Some more advanced reconditioning departments might have a heated soil extractor for shampooing carpets and fabric upholstery. Unfortunately, most detailers use
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these extractors incorrectly, or not at all. Today, there is greatly improved technology available to increase the speed of the reconditioning, in the quality and in making it easier for the employee to do the job, with less fatigue. Unfortunately, the person in charge of the department, knowing little about the industry, is not aware of this new technology, depending in some cases on the detailer to tell them what is needed. However, most of the experienced detailers have no knowledge either. Most have been doing the same thing they have done for years, and that is using 1950s technology. Ask them if they are aware of vapor steamers, dual action polishers, clay towels or gloves, automatic chemical dilution and dispensing systems and detail work stations, to name a few. Most will answer in the negative. In fact, ask them how they use 36
an extractor to clean carpets/fabric upholstery and most will tell you a very incorrect procedure. Finally, reconditioning department’s management, not having knowledge of what is needed and why, have far too little equipment available. If you have four or five detailers in the department you are going to need more than one vacuum, more than one heated soil extractor and more than one or two buffers, etc. When you are short on equipment, what you end up with are employees standing around waiting to use the one extractor or the one vacuum or one buffer. To keep people busy and get cars out quickly you need to have sufficient equipment to keep everyone working at the same time. Logical? But if a manager does not know what is needed and why, how can they know how much equipment is needed?
5
Supplies & Chemicals (Materials)
This may seem incidental to the overall operation of the reconditioning department, but like equipment, you must know what is needed in terms of supplies and chemicals to get the job done quickly and correctly. Again, if there is no real knowledge on the part of the manager in charge of the department or the detailers themselves, then any given shop will suffer. That is the purpose of this article, to let you know the problems you face and how you might resolve them. Anyone reading this article is welcome to contact me for any guidance at buda@detailplus.com. Editor’s Note: This article by Bud Abraham first appeared online at Auto Remarketing. T e x a s
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YES! I would like to serve on TIADA Committees Check the committee(s) you wish to join. All Dealer Members are welcome to participate. We need your input! Please complete form and return to info@txiada.org or fax to 512.244.6218.
Committee members will be appointed at the October 2021 board meeting Standing Committees: Awards Committee Budget and Finance Committee Legislative Committee Political Action Committee (INDEPAC) Bylaws Committee Ad hoc Committees: Ad hoc committees will be appointed by the president to focus on specific issues and given a specific timeframe. Issues may include but are not limited to: education, conference, compliance, member services, membership recruitment, website, magazine and surveys. Committee members will be notified prior to a committee being appointed to determine interest. Name___________________________________________________________ Dealership_______________________________________________________ Title __ ___________________________________________________________ Email ___________________________________________________________ Phone________________________ Mobile_____________________________ October 2021
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North Texas Toll Authority Frequently Asked Questions by North Texas Toll Authority
N
eed help with ZipCash invoices or have questions for the North Texas Tollway Authority (NTTA)? Here are a few frequently asked questions and answers to guide you.
FREQUENTLY ASKED QUESTIONS Q. Why am I receiving an invoice from NTTA? A. A vehicle registered to your dealership used an
NTTA road and did not have a TollTag. A picture of the vehicle’s license plate (including temporary license plates) is used to send an invoice for tolls to the vehicle’s registered owner (your dealership).
Q. I have a large number of invoices or an ongoing issue, how can I directly contact NTTA to work with them? A. Please contact Key Accounts Manager Laura Molina at 214-224-2322 or lmolina@ntta.org October 2021
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Q. H ow do I avoid getting more toll invoices from
NTTA? A. Join our TollTag Car Dealership Program, which helps you do just that. As a member, you’ll have access to portable TollTags linked to your corporate account, making test drives using toll roads easy and saving you both time and money. You’ll also receive the lower TollTag rate and won’t have to keep an eye out for ZipCash invoices at higher toll rates. Additionally, the TollTag program adds another benefit for you the customer as your staff will have the ability to activate a new TollTag for your customer’s new vehicle before they leave your dealership. For more information and to participate in the program, please contact Key Accounts Manager Laura Molina at 214-224-2322 or lmolina@ntta.org. 39
Q. O ur test drives are short and we aren’t
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on the tollway for long, can’t we get tolls waived? A. Toll roads are NOT funded by taxpayer dollars. Tolls go toward repaying the billions of dollars in debt used for the construction and operation our roads. Our agreements with bondholders who provide this funding prohibit NTTA from waiving tolls. Q. W hat can my dealership expect if we join the program? A. You will have access to our TollTag Partner site where your dealership fleet can easily be managed. This program will help add to your customer service as your staff can easily add your customer’s new vehicle to their existing or new TollTag account. When a customer trades in a vehicle, you’ll also be able to help them by removing that vehicle from their account. To take advantage of this offer, you must enroll your dealership in one of our Dealership Programs — Private Label or Classic. Here are the details:
CLASSIC
Complimentary classic TollTags Enhances your extraordinary level of cus tomer service Special portable TollTags for test drives Dedicated TollTag customer service pros for dealerships Dealer margin up to $5 per TollTag activation
PRIVATE LABEL
Dealership logo printed on customized TollTags — Reinforces your dealership’s brand on each windshield Enhances your extraordinary level of cus tomer service Dealership is promoted in certain NTTA marketing materials Special portable TollTags for test drives Dedicated TollTag customer service pros for dealerships Dealer margin up to $5 per TollTag activation
To take part in the program, please contact Key Accounts Manager Laura Molina at 214224-2322 or lmolina@ntta.org. 40
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Ignorance is no defense. Know the law. Repo and financing issues are among the most common violations found by the OCCC.
If you own a previous edition of these books from 2008 or earlier, it is recommended that you upgrade to the current editions.
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TIADA Member Price: $125 non-members $175
Everything you need to know about repossessions is addressed in this book, including Notification Requirements, Post-Repo Procedures, Private Sale vs. Strict Foreclosure, Bankruptcy, PostDisposition Accounting, Tracking and Shut-off Devices, the 60% Rule and more. PLUS – includes all required forms.
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Available for purchase online at www.txiada.org under “Resources, Legal and Compliance” or call 512.244.6060 to order by phone. When ordering online, login with your TIADA username and password to receive the discounted rate. All prices include shipping. Orders are shipped in 3-5 business days.
Please Welcome Our Newest TIADA Members DEALER MEMBERS 3Eighty Motors Inc
Grand Motors
AMS Vans LLC
J.E.D. Auto Sales & Repair LLC
Auto Spotz
Off The Grid Automotive
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Premier Pickups
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Tradein Expert, Inc. DBA CarZeus
Dallas Cars Today
Union Auto Sales LLC
EDDVIC Corporation
ASSOCIATE MEMBERS
Expo Auto Sales
321 Ignition
Mohammed Issa . . . . . . . . . . . . . . . . . 620 N. MLK Jr. Parkway, Beaumont, TX 77701 Mark Wood . . . . . . . . . . . . . . . . . . . . . . . . . . . 3414 Swensen Rd, Pearland, TX 77581 R Shade . . . . . . . . . . . . . . . . . . . 7310 S Westmoreland Rd STE 13, Dallas, TX 75237 Corina Bautista . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3726 US Hwy 271, Tyler, TX 75708 Jarrett Burleson . . . . . . . . . . . . . . . . . . . . 3578 Rocking J Rd, Round Rock, TX 78665 Ademola Oladele . . . . . . . . . . . . . . . . . . . . 9204 Beckford Drive, Houston, TX 77099 Imelda Arbelaez . . . . . . . . . . . . . . . . . . . . . . . . 12063 Garland Rd, Dallas, TX 75218 Victor Uzor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11522 Garland Rd, Dallas, TX 75218 Hector Herrera . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 Durrill, El Paso, TX 79915
Sai Grandhi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27127 Latigo Ln, Katy, TX 77494 Juan Mendoza . . . . . . . . . . . . . . . . . . . 1202 SW 3rd Street, Grand Prairie, TX 75051 Serena O’Gwin-Miranda . . 15384 Tradesman Dr., Ste 107, San Antonio, TX 78249 William Seeds . . . . . . . . . . . . . . . . . . . . . 1912 Old Denton Rd, Carrollton, TX 75006 Christy Bradberry . . . . . . . . . . . . . . . . . 1805 N 2nd St., Ste. 401, Rogers, AR 72756 Phil Kandera . . . . . 4335 Vance Jackson Road, Suite 104, San Antonio, TX 78230 Juan Hernandez . . . . . 6345 Montgomery Drive Space #3, San Antonio, TX 78239
Lyamen Savy . . . . . . . . . . . . . . . . . . . . . . . . . . 63 Unquowa Road, Fairfield, CT 6824
Goodtime Auctioneering and Auto Firm, LLC
Obisike Ubani . . . . . . . . . 8000 Camp Bowie West Blvd, Fort Worth, TX 76116
resource guide The TIADA Website: www.txiada.org
Members can log in with their username/password and access our Dealer Member Directory, Legislative Action Center, Compliance Consultation Service and much more. Register for all upcoming TIADA events online through the Calendar of Events, access our online membership application, find contact information for all our Local Chapters, and access many additional resources through our Knowledge Base.
License Renewal Certificate
TexasDealerEducation.com
T e x a s
occc.texas.gov
Texas Comptroller
EL PASO
800.252.1382 comptroller.texas.gov/
NIADA
800.682.3837 www.niada.com
REPOSSESSIONS American Recovery Association
972.755.4755 www.repo.org or contact TIADA state office
Burrell Printing
888.368.4689 www.txdmv.gov
800.252.9154 www.burrellprinting.com D e a l e r
CORPUS CHRISTI
G.R. Moore The Car Shack (dates announced at www.txiada.org)
FORMS
Texas Department of Motor Vehicles
October 2021
Office of Consumer Credit Commissioner 800.538.1579
Local Chapters
Cesar Stark S & S Motors Meeting – 3rd Friday (Monthly)
FORT WORTH
Jerry Smith H J Smith Automobiles Meeting – 4th Thursday of Jan–May and Sep–Oct
HOUSTON
April Hanson Coast to Coast Motors Meeting – 2nd Tuesday (Monthly)
SAN ANTONIO
José Engler Irving Motors Corp (dates announced at www.txiada.org) 43
Avoid expensive fines and penalties
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Texas in a self-guided online course, available 24/7. This is the same course required by the TxDMV to renew a GDN license, so it covers all the important subjects including: • Staying compliant with TxDMV regarding premises requirements • Acquiring Inventory • Temp Tags and Metal Dealer Plates • Buyer’s Guide • Deal Jacket Documents
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What People Are Saying: “Great ref resher course, helped me remember a lot of items that I need to be intoned with.” “The course provides all the necessary information, links, and rules where I can f ind useful tools for my business.” “If you want to learn more about a specif ic topic this course includes a direct link to the source you are trying to f ind out more information on.” “Overall, this program was great and I am happy that eLICENSING implemented this to ensure we know the basic stuff of running our dealers and running a clean ship without having to face violations or risk your license, this is awesome!” “This is a good training course for all new dealers. It can also be recommended for old dealers as a ref resher training course.”
T e x a s
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October 2021
behind the wheel Failing to Plan is Planning to Fail
E
very business owner knows you need a good plan to help you run a successful business, and associations are no different. In my years of consulting with and studying numerous associations, I have found that the most effective associations have some strategic plan in place that will guide them and ultimately help the association achieve their goals. There are several opinions out there on what exactly constitutes a strategic plan, and like everyone else, I have mine too. People will debate the length of a strategic plan: should it be three years, five years, or even more. I usually suggest a business or association develop a five-year strategic plan. However, if you have a new business or you determine through your S.W.O.T. that there are too many unknowns in the current business, political or economic environment, a three-year strategic plan might make more sense. One thing that is not up for debate is that a strategic plan is about the future. It should include measuring where you are and mapping out where you want to be. This means your strategic plan must include metrics; you must determine how you’re going to measure your effectiveness. This is usually done in your “supporting goals” or “objectives” and each goal or objective may
by Jeff
Martin TIADA EXECUTIVE DIRECTOR
include a timeframe. Don’t confuse a strategic plan with a business plan. A business plan usually covers a shorter period and tells you who does what for your business and why. Business plans are important and usually required for investors and lenders, etc. Another important step in creating a strategic plan is you overarching goal or vision. This is usually a lofty goal that is not necessarily something you can measure but something you and your team can strive to achieve. An example would be: ABC Auto Deal will be the preeminent auto dealer in Anywhere, TX by providing high quality transportation options with unmatched customer service. Some experts will tell you this is step one or two to any good strategic plan. I don’t necessarily agree. Creating the vision can be hard and sometimes it slows down the process, especially if you have a big group working on your plan. I recommend working on the overarching goal in the beginning, but you may want to go back and tweak it a bit after you have the supporting goals in place. My point is, don’t spend a lot of time
I have found that the most effective associations have some strategic plan in place that will guide them and ultimately help the association achieve their goals. October 2021
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quibbling over preeminent and best. There are much more important discussions to be had. Last, you must develop action items. This is the how-to under your supporting goals or objectives. With as much detail as you can, start mapping out exactly how you are going to reach the goals you have set. Assign a specific person or people to the project and create timeframes so you can monitor your success. I expect my strategic planning nerd is showing at this point and will confess I do get a little geeked out and passionate when it comes to strategic planning. At the end of this year the 2017 TIADA Strategic Plan will expire, which means later this month the board and staff will develop our next five-year strategic plan. By February it will be complete, and I look forward to sharing with you then. When I work with people on developing a strategic plan, I always tell them a company or association can be successful without a strategic plan, but then how do they know?
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