Archive August 2019

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Employee Non-Compete Agreements

Texas auto dealers spend a lot of money on developing trade practices relating to inventory acquisition, customer development and retention, lead generation, SEO, email lists, phone lists, and advertising.  What are you doing to protect that information?  Most likely, not enough. While your dealership may spend thousands to train and develop highly trained sales and support staff, are you ready if they walk out the door with your customer list?

Tips for Dealing with Bogus Mechanics's Liens

The State of Texas allows for the acquisition of a mechanic's lien on a motor vehicle under Chapter 70 of the Property Code when a worker repairs a vehicle and is not compensated for their labor. However, not all mechanic's liens are created equal nor filed in good faith. In fact, not too long ago bogus liens were a large problem for Texas dealers. In 2009 TIADA was able to help with the passing of SB 543 in the Texas Legislature to address the growing problem of bogus mechanic's liens. SB 543 established additional requirements for those seeking a mechanic's lien. Prior to 2009 the total number of mechanic's liens was up to 17,502. After SB 543 passed, the total number of mechanic's liens dropped to 9,928. That being said, many dealers still face repair shops presenting bogus liens. 

Vehicle Storage Lien Law Review

TIADA frequently receives calls regarding the laws that regulate vehicle storage facilities (VSF) after a customer’s vehicle is towed and then impounded.  Applicable provisions of the Texas Occupations Code and Texas Administrative Code are provided below as a reference to independent dealers.
In general a vehicle storage facility or VSF must be licensed by the Texas Department of Licensing and Regulation.  A few tips if you receive invoices or notices (or no notices) that are out of the ordinary.

Accident at Texas Dealership Demonstrates the Importance of Adequate Insurance Coverage

On July 1st, 2019 a customer was killed inside the offices of Superstar Motors on Montana Avenue in El Paso, Texas when a red Jeep Liberty crashed through the business.  Police said that an employee at a different dealership, Luxer Motors (located nearby), was moving the Jeep Liberty to a gated storage area for closing.  The investigation by El Paso Police revealed that the employee accelerated onto Montana Avenue and struck a Nissan Versa on the westbound lanes. That crash caused the Nissan to collide with a Toyota Rav 4 and a Chevrolet Traverse that were driving on Montana Avenue, sending the Jeeep into Superstar Motors according to police.  

Be Wary of Repo Scams

There are a lot of good recovery agents out there.  However, TIADA has recently learned of several dealers that have been charged fees well in excess of quote prices or estimates. Please take precautions when dealing with unknown entities that don't list a street addresses to avoid such inducemnts.  

Servicemembers Civil Relief Act Reminder

It seems that just about every other month, we hear of about a violation of the Servicemembers Civil Relief Act.  Last week, the Department of Justice reached a settlement with Nissan Motor Acceptance Corporation MAC, in which Nissan MAC agreed to pay over $3,000,000 to servicemembers whose 113 vehicles Nissan MAC repossessed in violation of the Servicemembers Civil Relief Act (SCRA).

10 Vehicle Inventory Photo Tips for Auto Dealers

Courtesy of  Dealer OMG (Online Marketing Group),

Independent dealer of all sizes will find something in these 10 tips to help you showcase your inventory in the best possible way. Let's face it, everyone is shopping online and doing research before they ever head to the dealership. Poor images of inventory is one of the main reasons shoppers bounce from a website. Inventory images are the key to enticing your potential customers. These 10 photo tips can help guide you to ensure you are showcasing your inventory in the best light, so your images are consistent across your website, which ultimately leads to more sales through Facebook and Instagram advertising.

Texas Dealer Hit With $100K FCRA Lawsuit

In June 2019, a $100,000 lawsuit was filed against a Texas dealership’s related auto finance company for credit reporting violations. One of the claims the plaintiff’s attorney is making is that the auto dealer didn't respond properly to a customer’s credit reporting dispute. Fortunately, this dealer had written policies and procedures in place and had responded to all credit disputes, inquiries, reports, and adverse actions in a correct, timely way. Also, the dealership had the certified letters and written correspondence to prove it. As the trial moves forward, the dealer will have the evidence to prove they responded correctly and get nonsuited. According to Richard Hudson of Ignite Consulting Partners, "we’ve seen an increase in these types of suits and continue to emphasize how important it is for dealerships to have written policies and procedures and take your furnisher duties under FCRA seriously."
The legal tactic isn’t new. The plaintiff's law firm throws everything at the creditors and hopes they’ll get enough of them to settle for a small amount to make it go away.   Make sure that when the time comes, you can make your case.

Can Car Dealers Charge a Higher Price if the Customer Pays in Cash and Doesn't Finance?

To sum up TIADA's understanding of the issue, NO. A vehicle may only have one price. There should be no cash price, credit price, internet price, etc…just one price. Dealers should stop thinking of inventory in terms of “cash cars” and “finance cars” on the lot. You simply have vehicles on your lot, and you accept various methods of payment for those vehicles, which may include cash, 3rd party financing or in-house financing.  A customer may negotiate to strike the best bargain; as long as the negotiated price is not contingent upon the payment method, there is no prohibition on price negotiation.