Coulter McMahen Explains What the Latest Regulations Mean for Dealers

Coulter McMahen, President and CEO of the Louisiana Automobile Dealers Association (LADA), joins Inside Automotive to discuss the latest regulatory developments affecting dealerships, recent legislative wins in Louisiana, and the continued importance of the franchise model.

As dealers navigate evolving FTC advertising expectations and state-specific compliance requirements, McMahen explains why retailers are asking for greater regulatory clarity rather than fewer rules. He also highlights key legislative victories that strengthen dealer protections, modernize the vehicle purchase process through electronic titling and registration, and reinforce Louisiana’s franchise laws. Beyond policy, the conversation explores the economic impact of franchised dealerships and why local retailers continue to play a vital role in their communities. McMahen also shares his outlook on Louisiana’s auto market and the legislative priorities dealers should watch in the year ahead.

Key discussion points:

• How FTC pricing guidance intersects with Louisiana advertising laws
• Major legislative victories for Louisiana dealers in 2026
• Why LADA gained new legal authority to defend franchise dealers
• The benefits of electronic titling, registration, and digital transactions
• The economic and consumer advantages of the franchise dealership model
• Louisiana dealers' outlook amid regulatory and affordability challenges

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Transcript

Welcome And Regulatory Pressure

Jim Fitzpatrick 0:07

Welcome to Inside Automotive with Jim Fitzpatrick. There's been a lot happening on the regulatory front this year from the FTC scrutiny to new legislation impacting dealers at the state level. Joining us now to break down what Louisiana dealers need to know is Coulter McMahon. He's president and CEO of the Louisiana Automobile Dealers Association. So thank you, Coulter, so much for joining us on the show once again.

SPEAKER_01 0:31

Jim, good morning. Always great to be on the show. Really a fan.

Jim Fitzpatrick 0:35

Great, great, great to hear.

FTC Advertising Enforcement And Open Questions

Jim Fitzpatrick 0:37

So let's talk about the FTC and the advertising enforcement that we're seeing. He's got a lot of dealers very nervous. But then, you know, recently I've spoken to a number of dealers and they said, you know, this is the best thing that could happen to the industry long term. So we're all in a level playing field. It's not this incredible battle out there for what you know what's the right price to present to dealers. So how are things going in your state as it relates to the FTC regulations?

SPEAKER_01 1:05

Yeah. So you know, any any time the FTC kind of somewhat threw a threw a wrench in things, right? I mean, they come out with this guidance, and of course, there's follow-up questions. Uh you know, how does that apply to your specific state? Every state uh treats advertised pricing a little bit different. Uh so of course there's some unanswered questions, and I know NADA is working in coordination with the FTC uh to come out with some guidance for dealers because it one thing in Louisiana that that I've learned throughout this process is dealers in Louisiana want to do the right thing and want to do it right. Yeah. And really dealers nationwide, but they want to know the rules of the game and they want clarity. And there's still some unanswered questions that I'm hoping in the coming months uh will be short up. Uh so dealers here and nationwide know how know how to operate, but but in terms of doing the right thing uh by the customer and and transparent pricing uh of course fully support that not only in Louisiana but nationwide and and certainly uh think that that this is the right step uh towards that, but but needs some needs some answers to some some unanswered questions, and we're hoping to get that uh in the coming months and working with the FTC as well as as well as NADA.

Jim Fitzpatrick 2:27

Yeah, I I agree with you. Um there are a lot of unanswered questions on this very topic. It's got a lot of dealers very concerned um and uh and they want some they want some some some answers. They want some direction on this, like you said, and uh it's not going away and it's it's here to stay from what the FTC tells us. It's not it's not one of those things that you know rears its ugly head and then goes back under the water for the next 10 years. It it's here, it's a real deal, right?

SPEAKER_01 2:52

No doubt.

Jim Fitzpatrick 2:53

Yeah, no doubt. For sure.

Louisiana Session Wins Association Standing

Jim Fitzpatrick 2:55

Talk to us about some of the key takeaways from Louisiana's uh 2026 legislative session as it relates to the dealers.

SPEAKER_01 3:02

Yeah, so we we had a busy agenda. Uh some of our top priorities, association standing, what does that mean? It gives the dealer body in Louisiana uh the opportunity uh to band together and and really stand in the shoes of those individual dealers when a manufacturer uh violates the Louisiana Motor Franchise Act. Um you know what what we found and what you what you necessarily see nationwide where where states don't have association standing is dealers are hesitant to challenge their uh their OEM partner individually. So this gives us uh that procedural mechanism to to hold OEMs accountable when they're violating Louisiana law. And now I tell everybody we hope we never have to use this with our partners, but you see in other states, Scout Motors, for example, in California and Florida. Um in those states, specifically California, uh the association has been able to assert uh claims on behalf of Audi Volkswagen uh dealers when Scout Motors is clearly violating uh California law. And so that would give us the opportunity here in Louisiana.

Electronic Titling And Faster Paperwork

SPEAKER_01 4:15

You know, a second initiative that we're we're really uh proud of is uh electronic titling, registration, electronic signatures.

Jim Fitzpatrick 4:24

Yeah, that's big.

SPEAKER_01 4:25

Yeah, so I mean, from the customer experience is so important to us, and in the 21st century's customers expect electronic capability.

Jim Fitzpatrick 4:35

Yeah.

SPEAKER_01 4:36

And so Louisiana um is currently undergoing a uh Office of Motor Vehicle modernization project, which is really the foundation uh that will allow for electronic signatures, electronic registration, titling, liens. So we so we laid really the statutory foundation this past session uh to be able to accomplish that. And it's not only going to improve the customer experience, it's gonna improve the experience for dealership employees. Yeah. Remove the paper bottlenecks. Yep. Um so really proud of that initiative as well. So we've been we've been busy, and of course, you have just everything that comes with the session, things that you're not in necessarily anticipating, but you have to react to to make sure uh you know the the law doesn't have unintended consequences that trickle down to the dealer and it impacts their operations. Sure. Uh so it's been we've been busy, but it's it's been a good busy down here.

Jim Fitzpatrick 5:36

Yeah, it sounds like it. So you didn't have standing prior to this last session? We did not. Wow. So that that would that was a big win.

SPEAKER_01 5:44

Yeah, that's fantastic. Very happy uh getting that law on the books. Sure. Absolutely.

Scout Motors And The Franchise Wall

Jim Fitzpatrick 5:51

So let's talk a quick about um uh scout motors. I won't spend a lot of time on it, but where does that stand today in Louisiana? Can Scout become a uh dealer in in that state?

SPEAKER_01 6:01

No, not in Louisiana. Um they they they cannot become a dealer. Our law specifically requires them to go through uh their franchise dealership, similar to to California and Florida and really every other state um in the country. And it's really a shame that that Scout Motors has has uh pursued this course of action with dealer, their partners, their dealership partners investing millions upon millions of dollars in their facilities, and they come out with this brand where they want to circumvent the dealer franchise model.

Jim Fitzpatrick 6:38

Yeah.

SPEAKER_01 6:38

Um, and we know this. Dealers know their customers, they've built years, decades of goodwill with their with their communities. And they would they should have the right uh to sell the the vehicles that their manufacturers are

Dealers Economic Impact On Louisiana

SPEAKER_01 6:54

making.

Jim Fitzpatrick 6:54

That's right. Well, that's a perfect segue to my next question, which was uh LADA's newly published 2025 Economic Impact Report and what it says about the importance of Louisiana's franchise dealers. Talk to us about that.

SPEAKER_01 7:06

Yeah, no, absolutely. And it really the the numbers in 2025 and even before 2025 tell the story of why the franchise model is the superior model, not just from from the state perspective, but trickling down to the customer, yeah. Where dealers are competing day in and day out for the business, but from just the the uh overlooking what dealers in Louisiana provide, 40,000 uh direct jobs, $2.6 billion in earnings uh for Louisiana residents attributable to dealership operations. Yeah, wow, state and local sales taxes paid in 2025, $1.8 billion. Wow. You don't see that with a direct sell model, right? You've got people invested in your communities, and let's talk about the the philanthropic uh aspect of it. $18 million, and I think this number is actually higher, but $18 million in 2025 that our dealers gave to different different causes, and you think your your your T ball teams and high school football sponsorships and and different charitable causes, yeah. That's what dealers here in Louisiana do, that's what dealers nationwide do. And it really just just uh bolsters the the the the impact and argument of why uh the franchise model is a superior

Direct Sales Versus Consumer Protection

SPEAKER_01 8:33

model.

Jim Fitzpatrick 8:33

Yeah. What do you say to the dude play devil's advocate for a second here? But what do you say to the viewer that says, Well, I hear what you're saying, Culter, but it's a free market system, and if in the event Scout chooses to sell directly to consumers, so be it, much the way we see Tesla has been able to do. There's enough business out there for all of us, and if they think that's a better distribution model, then let them exist. Can we have can't we have a two distribution system in a state and everybody does well? Um what what what do you say to those consumers that might pop up and see that as a a better way for them to buy a car?

SPEAKER_01 9:08

Sure. Yeah, I I would say that the the franchise model is in place to protect the consumer. So what you have with the dealership franchise model is when your car is subject to a recall or warranty work, and and you need that advocate communicating directly with your manufacturer, fighting on your behalf, because they're not necessarily incentivized to fix it, right? When you have a direct sales model, they're not incentivized to to fix the problem. You lose your advocate that you have in your dealer.

Jim Fitzpatrick 9:45

Yeah.

SPEAKER_01 9:56

Uh when you have the dealer here uh who's rooted in Louisiana, has facilities here in Louisiana that has a stake in ensuring uh your experience is is is right, you don't necessarily you don't have that with with direct set the direct sales model. Right. And so that's what I would tell you.

Jim Fitzpatrick 10:27

Sure, sure. Also to negotiate a better deal on that product where you've got uh the free market um you know would allow on the franchise side for those dealers to compete for your business, which would be lower prices on that product, right?

SPEAKER_01 10:40

Absolutely.

Jim Fitzpatrick 10:41

Yeah, yeah,

What LADA Watches Next

Jim Fitzpatrick 10:42

for sure. Um you've gotten a couple of big wins there that you just mentioned. Anything else in uh in the second half of the year that's on your to-do list or the things that you want to get checked off?

SPEAKER_01 10:52

Yeah, I mean, so we're gonna continue monitoring the the FTC uh guidance and enforcement uh posture, working with our regulatory agency here at the in in the state of Louisiana to make sure uh you know we align with what the FTC is is imposing. And it don't go too far, right? We won't we want to do what the FTC wants us to do. Yeah. Um so that's something that that we're gonna be watching. And then uh gosh, a little under a year from now, we'll start our fiscal session uh here in Louisiana. So uh preparing for that, tax issues, not as uh uh you know, I'm not gonna get in the weeds on on specific Louisiana tax issues, but there's some there's things that always arise that impact uh the dealership operations here, and so we'll be on the lookout and of course advocating for for our dealers' interest uh when it relates to tax matters.

Dealer Outlook And Closing Thoughts

Jim Fitzpatrick 11:47

Yeah, yeah. If you had to rate how the dealers are currently doing in the state of Louisiana in terms of their businesses, 10 being they're knocking the cover off the ball, where where would you rate them?

SPEAKER_01 12:00

Uh I would probably rate them uh about an eight. I think uh it's been a very strong year if you're looking at uh new new and used vehicle sales as compared to to years prior. Um if you're looking at that just as is a metric, I would I would give it an eight. Um there's uh I give it an eight because there is always uh room for improv improvement.

Jim Fitzpatrick 12:23

Sure.

SPEAKER_01 12:23

Right. So um but here we're doing well here in Louisiana.

Jim Fitzpatrick 12:27

That's great. That's that's fantastic. Wow. Good news, especially in light of everything that's going on in the world and in the country, right? With affordability and gas prices and a war in Iran, and you know, not to bring everybody down this morning, but these are real things that both dealers and consumers are dealing with, right?

SPEAKER_01 12:45

There is a lot going on. Uh and uh but one thing that that you know that's dealers are resilient, yeah, consumer is resilient, and uh this too shall pass.

Jim Fitzpatrick 12:56

I agree, I agree. Coulter McMahon, who is the president CEO of the Louisiana Automobile Deals Association. Thank you so much for joining us once again here on CBT News. I've got about 14 other questions for you that time does not allow me to get to, but I've enjoyed it very much, and thank you so much for stopping by.

SPEAKER_01 13:13

We'll get to them next time. Always a pleasure, Pim.

Jim Fitzpatrick 13:16

Thanks so much.

SPEAKER_01 13:19

Thanks for watching Inside Automotive with Jim Fitzpatrick.