Avoiding the 9 most common dealer violations. TIADA ANNUAL CONFERENCE August 11, 2015 San Antonio, Texas

Transcription

1 Avoiding the 9 most common dealer violations TIADA ANNUAL CONFERENCE August 11, 2015 San Antonio, Texas

2 Most Common Dealer Violations #1 Failure to Timely Transfer Title Texas Trans Code #2 Selling Vehicle without Title Texas Trans Code #3 General Premises Violations 43 Texas Admin Code #4 General Fraud Allegations Texas OCC Code #5 General Records Violations 43 Texas Admin Code #6 General Misuse of E-Tags 43 Texas Admin Code #7 Buyers Guides Texas OCC Code #8 Curbstoning by Licensed Dealer Texas Trans Code #9 Violation of Blue Law Texas Trans Code

3 #1 FAILURE TO TIMELY TRANSFER Cash Sales/3 rd Party Finance- 20 Working Days In-House Financing-45 Calendar Days (Must hold Finance License with OCCC) OCCC-Office Consumer Credit Commissioner

4 #2 Selling Vehicle Without Title Lien? Branded? Rebuilt Salvage/Non-Repairable Title?

5 #3 General Premises Violations Failed to Post Business Hours Failed to Post Copy of License No dealer employee present during posted hours No one answering phone Not operating from licensed location

6 General Premises Violations All requirements that are needed to get a license, must be maintained throughout the license period

7 BUSINESS HOURS 7

8 General Premises Violations 4 days/week & 4 consecutive hours/day Owner or bona fide employee present to buy, sell, exchange, or lease vehicles, or Be Back sign with return date and time Telephone must be answered from 8-5 weekdays by employee, answering service or answering machine

9 BUSINESS HOURS - WHOLESALE 2 days/week, 2 consecutive hours Telephone must be answered from 8-5 weekdays by employee, answering service, or answering machine 9

10 RULE (5) Dealers are required to display license Easily read by the public In a conspicuous place in the office of each place of business Use copies of the original for supplemental locations 10

11 #4 General Fraud Allegations Failure to Disclose Misrepresenting Mileage Actual/Not Actual. False Lien 11

12 DISCLOSURES Odometer replaced True miles Mechanical deficiencies Vehicle is a stolen recovered, flood damaged, hail damaged, salvage, rebuilt or reconditioned, etc. 12

13 DISCLOSURES Disclose it. NO MATTER WHAT THE AMOUNT OF DAMAGE! KEEP THE CUSTOMER HAPPY!! 13

14

15 DISCLOSURES Or possibly face a DTPA suit Under DTPA - 3 times actual damages, plus Attorney fees and court costs 15

16 #5 General Records Violations 16

17 RECORD KEEPING Electronic records are OK if The records can be printed out and viewed at the licensed premises EXCEPTION: Original titles 17

18 RECORD KEEPING Division personnel may request records by certified mail, fax, or 18

19 RECORD KEEPING Can you keep original records off-site? Yes, but copies of the last 13 months must be kept on-site for inspection or electronic copies must be available at licensed location for copying 19

20 RECORD KEEPING For purchases and sales 48 months minimum for TxDMV including consignment sales 13 months at dealer s licensed location 35 months off-site is OK if in same county *NOTE: Other agencies may have different rules Records need to be kept even if sale unwound 20

21 RECORD KEEPING - WHOLESALE Purchase record: auction receipt, bank draft identifying seller of vehicle Purchase Record Auction Receipt, Bank Draft identifying seller of vehicle. Title (Front & Back) Showing assignments. Title (front and back) showing assignments Resale Certificate (Page 7-9) Resale Certificate (Page 7-8) Sales Contract/Bill of Sale Agent Authorization if applies Sales Contract/Bill of Sale Agent Authorization, if applicable 21

22 RECORD KEEPING - RETAIL Same as wholesale, plus Retail Installment Contract Form 130-U (Page 6-14) Tax Collector s Receipt (White Slip) Buyer s Choice of County of Registration Form VTR -136 (Page 6-17) 22

23 RECORD KEEPING - RETAIL Out of State Sales Tax Exemption Certificate-if applicable (Page 7-7) Consignment Sales Contract- if applicable (Page 4-33) Copy of Buyer s Guide (As-Is form) Other documents relating to sale Identification of the buyer Buyer Tag Receipt-Dealer Copy 23

24 #6 General Misuse of E-Tags Failure to report retail sale into Vision 21 and issuing Buyer Tag on a Retail sale. Issuing more then one buyer tag per retail sale. Dealer Tag-Personal Use

25 BUYERS TAGS Good for 60 calendar days Still required to apply for title within 20 county working days 25

26 BUYER S TAG RECEIPT DEALER S COPY BUYER S TAG RECEIPT DEALER S COPY THIS IS THE BUYER S TAG NUMBER: 42F8851 THIS IS THE EXPIRATION DATE: DATE OF SALE: HAVE BUYER SIGN DEALER S COPY & GIVE BUYER S RECEIPT TO BUYER. PLACE THIS DEALER S COPY IN SALES FILE. It is part of the sales records required to be kept and subject to inspection by the department. Verify this information before distributing copies: Issue Date VIN Year Make Color Model Body Style VK157K031T Volkswagen Blue Beetle 2-Dr Sedan Issuing Dealer Dealer Number ABC Auto Sales P Owner #1 Name Owner #1 Street Address E. Z. Byer 123 Main Street Austin, Texas Owner #2 Name Owner #2 Street Address 26

27 TEMP TAG FEE $5 Charged only for buyer s tag Official fee Collected for every retail sale (even if plates are purchased immediately) Paid to Tax Assessor-Collector at titling Charged for out-of-state or export sales 27

28 TEMP TAGS $5 FEE EXECPTIONS Exempt for $5 fee and issuance of etag ATVs and off-road motorcycles Salvage titled vehicles Exempt for $5 fee but E-Tag required Exempt agencies 28

29 BUYER S TAG USES Display signs on vehicle and carry loads Must have a current inspection Only for use in retail sales If lost, stolen or damaged, can reprint if still within 60 day period expiration same Only one 60 day buyer s tag can be issued 29

30 #7 BUYERS GUIDE 30

31 BUYERS GUIDE Used Car Buyers Guide (Page 4-34) For every car and light truck in your inventory including consignment vehicles Forms at Federal Trade Commission Website: 31

32 BUYERS GUIDE Where can I Post? In a prominent and obvious location. It needs to be conspicuous and the front and back can be seen On the dashboard, hanging from the rear-view mirror, on side window all are OK Buyers Guide 32

33 BUYERS GUIDE Posted on all used cars and light trucks Provide consumer a completed Buyers Guide at time of sale Reflect any negotiated changes Note changes in warranty coverage If transaction is in Spanish, then must provide Buyers Guide in Spanish Post Spanish version in dealership 33

34 BUYERS GUIDE Good business practice to sign but not required Part of the sales contract and overrides any contrary provisions 34

35 BUYERS GUIDE There is a Federal Penalty for Failure to Comply Dealers who violate Federal Used Car Rules are subject to penalties up to $16,000 per violation 35

36 #8 Curbstoning by Licensed Dealer Licensed to sell from licensed location(s) No Right of Way Public Roadway

37 #9 Violation of Blue Law Blue law is still in effect Cannot sell or offer to sell on any consecutive Saturday and Sunday (Does not apply to travel trailers)

38 COUNTY REGISTRATION Buyer has choice of county in which to register Buyer elects where to register vehicle preprinted forms prohibited Buyer must sign form VTR-136 making election Documents and fees to county chosen by buyer Dealer keeps VTR-136 in records 38

39 CONSIGNMENTS Can only accept if licensed for that type vehicle. Can you sell it? Have a written contract that identifies the vehicle (Page 4-33) Have the title located Get copy of front and back of title Identify any outstanding liens Inform buyer that vehicle is a consignment Pay the owner promptly! 39

40 CONSIGNMENTS Dealers cannot consign any vehicles in their dealer inventory to another dealer. 40

41 WHOLESALE AUCTIONS Auctions are acting as the agent for seller All representations or guarantees are seller s Do NOT take customers to auctions Most auctions take days to get title Draft must clear Lienholder and/or seller paid By law you cannot sell a vehicle until title is received 41

42 WHOLESALE AUCTIONS Most auctions have buy-back policy if they cannot provide title within 30 working days If units have a salvage title, both buyer and seller must have a Salvage Dealer s License A Salvage Dealer License is not sufficient to buy a vehicle on a blue title. A P number/gdn is required 42

43 USER IDs etags Keep user IDs and passwords secure Do not share your IDs and password with others Be sure to deactivate unused accounts 43

44 IMPORTANT PHONE NUMBERS-Vision 21 Technical Issues Toll free or , Option 2 Temporary Tag Info Toll free or etag@txdmv.gov 44

45 Contact Information David George Chief-Investigator DMV-Enforcement-Motor Vehicle (512)

46 QUESTIONS? 46