Auto Dealer Law

A Career as an Auto Dealer Attorney in Dallas

I have been an auto dealer attorney in Dallas since 1982, over thirty years. My very first dealer client was a dealer I had first met when my firm sued the dealership over a car purchase gone bad. Afterward, the dealer called us and said we had been so easy and reasonable to deal with, he wanted us to represent him. My partner and I, after getting over our surprise, accepted the representation. We represented this dealer for over five years until he sold the dealership. Then the dealer bought a new dealership and we continued to represent him. We also began to represent some of his former employees who were now dealer-principals of their own stores. Over the years we have represented quite a number of people and dealerships connected to that first client. Ironically, enough time has gone by that we have lost clients to retirement or sale of a dealership to a large publicly traded chain.

The most important thing for an auto dealer attorney to know is the organization and functioning of a dealership. Thankfully, every dealership is organized in the same manner, the only variable being size. Knowing the organization is critical to learn who is responsible for the actions of the dealership and who has the knowledge needed to fix a problem. A second important kernel of knowledge is to know the terminology of a dealership. For example, knowing that the “F&I Department” refers to “Finance and Insurance” is important to know how the sales process actually works.

This firm has specialized in one particular niche of the auto business: computerization of dealerships. Now every dealership has a “DMS”, or Dealer Management System computer. It is responsible for every aspect of dealership operations, including accounting, inventory, and financial functions. DMS systems have evolved from a proprietary system provided by a specific provider to a software program running on generic hardware and storing data in the cloud. The expense of these systems has dropped dramatically over years from over $30,000 per month to around $1500 per month. In addition to a DMS system, dealerships sometimes had specialized computer systems for parts inventory, parts location, car deal calculations, or financial reporting to a manufacturer. We have advised dealerships on every aspect of the various computer systems being used, from hardware and software issues to the contract with the provider.

It has been my experience that every dealer needs legal advice from time to time. Dealers can have issues with governmental authorities, manufacturers, competitors, employees, as well as customers. I have represented dealers in every sort of these disputes.

Occasionally these disputes end up in court. Years ago I was representing a large Ford dealer in the Houston area who was in a lawsuit with a customer over a purchase. While I was voir diring the jury, I asked if anyone had any prejudices against my client. One man raised his hand and said “I’m a Chevy guy and I just don’t like Ford dealers.” Representing dealers in court is a hazardous business, as this incident illustrates. But we won the case and sold a car to the bailiff.

Leave a Reply

Your email address will not be published. Required fields are marked *