Car dealers discover law of diminishing returns: Sellers in Hispanic-oriented neighborhoods suffer because Georgia requires an in-state license to register a vehicle.

Written by Mary Lou Pickel
Posted on 2008-06-14

By Mary Lou Pickel
The Atlanta Journal-Constitution

Published on: 06/14/08

The used car sales manager at Gwinnett Place Ford reads the sign-in list of walk-in customers.

“Mr. and Mrs. Lopez … Mr. Rodriguez … Mr. Piero and Miss Arias,” says Mike Wright.

It kills him that he can’t sell more cars to Hispanic customers. All were good prospects, but Wright could only sell to one, who had proper papers.

Dealers in areas with a high percentage of Hispanic customers say business took a dive last year. Many say the key factor was a state law that requires car owners to have a Georgia driver’s license to register a vehicle. Immigrants without proper visas can’t get a Georgia license. That means they can’t get a tag. With no tag, what’s the use of a car?

Car sales have taken a downward spiral in the past months for many reasons —- high gas prices, the housing slowdown and a sluggish economy.

Dealers say all of these things weigh in, but the coup de grace is the state’s tag law, which has taken a big bite out of their bottom line.

“They come in every single day, but we tell them, ‘Folks, without a Social Security number or a driver’s license, we can’t do anything for you,’ ” Wright said.

Pravin Patel, a sales manager at Rick Hendrick Chevrolet in Duluth, agrees.

“The economy hurts it, but the law makes it worse,” he said.

The law’s sponsor, Sen. Chip Rogers (R-Woodstock), said his goal was public safety, not immigration control. The law, known as Senate Bill 38, took effect July 1, 2007.

Rogers says his bill “has nothing to do with the sale of a vehicle.”

“We could allow 12-year-olds to drive and that would increase car sales, but it’s not good public policy,” he said.

Rogers was also the architect of Senate Bill 529, a larger bill that cracks down on illegal immigrants. It requires jailers to investigate the legal status of those booked on felony or DUI charges. It tightens screening for welfare benefits, directs universities to deny in-state tuition to illegal immigrants, requires contractors on public jobs to double-check legal status of new hires, and punishes employers who aren’t certain their subcontractors are here legally.

Rogers says the purpose of his car tag law is to assure that anyone who drives on Georgia’s roads knows the rules of the road.

The law has had an effect on auto dealers, though.

Many dealers in Gwinnett County and along Buford Highway in DeKalb County have built up a substantial business catering to nearby Hispanic residents who have licenses from other states or foreign countries.

Many offer their own financing to customers rather than going through a bank. They are known as “buy here, pay here” lots.

The downturn has rippled to auto-related businesses, too.

David Park, owner of Car Zone on Buford Highway in Doraville, says he’s thinking of replacing the Spanish signs on his repair shop with Vietnamese signs. Many Vietnamese shop along Buford Highway, and most are here legally as refugees from their war-torn country. The state’s crackdown on illegal immigrants has affected his business “big time,” he said.

Boards cover the windows of another mechanic shop down the street. A Buford Highway car stereo store popular with Mexican customers closed. Its space is for lease.

“The Hispanics don’t come in anymore. There are none around,” Sugar Hill auto lot owner J.W. Wimpey said.

“It’s hurt our business tremendous,” said Wimpey, who has run J.W. Truck Sales for 12 years. He says business is down 30 percent to 40 percent.

Gwinnett Place Ford, in Duluth, estimates it has lost half of its Hispanic customers, at a cost of 40 to 45 car deals per month. Those sales were mostly trucks and SUVs, which are high-profit for the dealership. At one time, 30 percent of the dealership’s used car buyers were Hispanic. Now that figure is 10 percent to 15 percent, Wright said.

“I understand the law,” Wright said. “But for Lord knows how many years, they let it go,” he said of clamping down on those without papers.

“It’s really bad in general for dealers,” said Eduardo Erazo, manager of On the Road Again Auto Sales in Doraville. “It’s really slow. We went down 50 percent on Hispanic sales. Believe me, that’s too much.”

Other dealerships that have not relied on Hispanic customers say they have not been affected as much.

“Ninety percent of our cars were financed through a bank. We weren’t serving those folks anyway,” said Bill Huseby, general manager of Mall of Georgia Ford in Buford. “The overall economy has got us down.”

Park, the auto repair operator, says Buford Highway used to be a mix of Asians and Hispanics, but it slowly changed to a majority Hispanic clientele five years ago.

Norcross is estimated at 52 percent Hispanic, according to Claritas, a marketing information resources company. Buford Highway runs through Doraville and Chamblee. Both cities are majority Hispanic —- 57 percent and 65 percent, respectively, according to Claritas estimates.

Park has seen a 35 percent decrease in his gross income in the past year. “We’re extremely tight. We’re a couple of months behind on the rent,” he said.

Illegal immigration is a difficult issue, he said.

Park is a Korean immigrant and United States citizen, but he doesn’t have sympathy for those who are here illegally.

“It’s wrong. They came here wrong,” he said.

The solution isn’t easy.

“You can’t just kick them out of the country,” he said.

Wimpey says his former Hispanic customers have gone to Texas, Florida and North Carolina. “They’re going to other places where they can do business,” he said.

He blames the politicians for wrongheaded laws.

“They screwed up the market,” Wimpey said. “I don’t know what they were thinking.”

HERE

Note from D.A. – maybe they were trying to save American lives on our highways?