Texas is eliminating temporary paper license plate tags once and for all. The change could mean a few different things for dealers, especially after the initial transitional period, which has been a bit rocky.
The details: The new ban on temporary license plate tags went into effect in Texas this month, requiring dealers to issue metal plates at the time of purchase, instead of paper tags.
Aimed at ruling out fraudulent temporary tags, which are estimated to have generated millions in revenue for criminals, the change has presented some initial challenges for dealers.
Now, Texas dealers must issue metal black and white plates at the time of purchase, while the legislation also adds four new limited-use plates to the available options.
Alternatively, six temporary tags have been eliminated from circulation.
Between the lines: Out of state sales, plates for extended test drives and loaner vehicles, transferring personalized plates, and needing to send runners to pick up 30-day metal tags, remain sticking points. However, contrary to much reporting on the negative side of the transition, Justin Villa, GM of Clay Cooley Ford in Texas, tells CDG News that the shift will also remove some existing bottlenecks from the sales process for the long term.
“I think a major pressure point in the car deal between the customer and the dealer has been license plates,” Villa said. “So I think a large benefit will be removing that pressure point, and just assigning plates to the customer at the time of sale. It seems to make a lot of sense to me.”
Justin Villa, GM of Clay Cooley Ford
Why it matters: While there are still some near-term challenges pertaining to the transition, Villa expects the legislation to subdue many customer complaints that are often directed at the dealer, even when the issues are out of their hands. Ultimately, handing metal plates off to customers at the time of sale will save money for dealers and streamline the sales process, reducing the number of external factors that could slow down sales and cause customer frustration.
“I think largely it’s going to take a lot of customer complaints out of that. The dealer gets blamed for all those motor vehicle issues, and any lost title issues or anything like that that slows down the process.”
A quick word from our partner
Want insider knowledge on the most up to date trends in auto retail?
The Haig Report® is auto retail's longest-published and most-trusted quarterly report tracking trends and their impact on dealership values. Since 2014, this report has delivered analysis on dealership performance, market trends, and franchise valuations—offering a clear view of opportunities and challenges in automotive retail.
Join the leaders in the industry who rely on the Haig Report® for:
Exclusive insights into dealership values and valuation trends
Franchise insights and outlooks on brand desirability
Market trends to help you make informed business decisions
The only report to publish blue sky values every quarter
Looking to grow your portfolio or explore dealership investments? Join our exclusive buyer and investor database—visit haigpartners.com/buyerdatabase.
OUTSMART THE CAR MARKET IN 5 MINUTES A WEEK
No-BS insights, built for car dealers. Free, fast, and trusted by 55,000+ car dealers.
