Think the current buzz about tougher finance and insurance regulations have dealers overly concerned? Not so for many Houston dealers on the Ward’s Dealer 500.

“I’ve been in this business a long time. Every time the government comes up with a new dreaded regulation, it turns out better for us,” says Ramsay H. Gillman, owner of 18 dealerships in Texas. His Honda Motor Co. Ltd. store is ranked 166th on this year’s Ward’s 500.

Terry Shields, co-owner of the Mac Haik dealerships in Texas, likes what Florida has done with extended warranty plans. “Florida sets the warranty contracts at a set price,” says Shields. “If I’m selling to my brother-in-law, I have to sell it at the same price to someone I don’t know.”

Shields, who has dealer friends in Florida, says they were nervous before the new regulation took effect but now say it is the greatest thing to have happened.

“Those dealers are making more money per warranty then they had before – their warranty sales are so much more than ours,” says Shields.

Terry Shields says flat fees would be better for the industry.

In addition to setting one price, the price is posted everywhere in the dealership, so the consumer has no questions.

John Beck, of Beck and Masten Pontiac GMC, agrees a flat fee would be a good thing. “I think with it being posted, it knocks down the opportunities for those warranty prices being tricked,” he says.

The flat fee levels the playing field, and that’s the way it should be, says Gillman. “If you’re trying to run your business in a honest, correct manner, you are basically in line with the regulation already,” he says. “You can look at the regulation and say, ‘This is overkill,’ but the truth of the matter is that it makes it better for the better dealers.”

Shields supports a flat fee to dealers for arranging auto financing for customers vs. the dealer reserve system of adding percentage points to the loan rate. The latter has come under fire from some consumer groups and government agencies.

“We do a lot of F&I in our stores, and a flat-fee would be fine,” he says. “I think it would strengthen a lot of dealers who aren’t playing much in the F&I business.”

Gillman believes the jury is still out on the flat-fee proposal. “From a dealership perspective, it might be good, but from a consumer standpoint, I’m not sure the flat fee would serve them as well.”

Shields thinks a flat-fee system would have to include tiered financing, with those customers who are greater credit risks paying more.

For Masten, it’s a question of what is fair. “When it comes to finance overages, we’re a lender just like the bank, and many times we get a better rate for the consumer than they could get themselves,” he says. “For us to be denied a profit is totally against everything this country was built on.”

Gillman says while regulations don’t concern him so much, potential lawsuits do. “What bothers me is that, as you do a lot of volume, you start worrying more and more about lawsuits that you may just have to settle.” So far, he hasn’t encountered that.