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

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Avoiding the 9 most common dealer violations

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Most Common Dealer Violations

#1 Failure to Timely Transfer Title Texas Trans Code 501.0234 #2 Selling Vehicle without Title Texas Trans Code 501.152 #3 General Premises Violations 43 Texas Admin Code 215.140 #4 General Fraud Allegations Texas OCC Code 2301.651 #5 General Records Violations 43 Texas Admin Code 215.144

#6 General Misuse of E-Tags 43 Texas Admin Code 215.151 – 215.155 #7 Buyers Guides Texas OCC Code 2301.651

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#1 FAILURE TO TIMELY TRANSFER

 Cash Sales/3rd Party Finance- 20 Working Days

In-House Financing-45 Calendar Days

(Must hold Finance License with OCCC)

(4)

#2 Selling Vehicle Without Title

 Lien?

 Branded? “Rebuilt”

(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

(6)

General Premises Violations

All requirements that are needed to get a license,

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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

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RULE 215.140(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

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#4 General Fraud Allegations

 Failure to Disclose

 Misrepresenting Mileage –Actual/Not Actual.

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DISCLOSURES

 Odometer replaced

True miles

 Mechanical deficiencies

 Vehicle is a stolen recovered, flood damaged, hail

damaged, salvage, rebuilt or reconditioned, etc.

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DISCLOSURES

KEEP THE

CUSTOMER HAPPY!!

Disclose it….

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DISCLOSURES

…Or possibly face a DTPA suit Under

DTPA -

 3 times actual damages, plus

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#5 General Records Violations

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RECORD KEEPING

Electronic records are OK if

 The records can be

printed out and viewed at the licensed

premises

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RECORD KEEPING

Division personnel may request records by certified mail, fax, or e-mail

(19)

RECORD KEEPING

Can you keep original records off-site?

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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

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RECORD KEEPING - WHOLESALE

• Purchase Record – Auction Receipt, Bank Draft identifying seller of vehicle.

• Title (Front & Back) – Showing assignments.

• Resale Certificate (Page 7-9) • Sales Contract/Bill of Sale • Agent Authorization if applies

 Purchase record: auction receipt, bank draft

identifying seller of vehicle

 Title (front and back) showing assignments

 Resale Certificate (Page 7-8)

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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)

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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)

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#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.

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BUYERS TAGS

 Good for 60 calendar days

Still required to apply for title within 20 county

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BUYER’S TAG RECEIPT – DEALER’S COPY

Issue Date VIN Year Make Color Model Body Style

6-25-2008 VK157K031T3238323 2004 Volkswagen Blue Beetle 2-Dr Sedan

Issuing Dealer Dealer Number

ABC Auto Sales P 12345

Owner #1 Name Owner #1 Street Address

E. Z. Byer 123 Main Street Austin, Texas 78704

Owner #2 Name Owner #2 Street Address

BUYER’S TAG RECEIPT – DEALER’S COPY

THIS IS THE BUYER’S TAG NUMBER: 42F8851

THIS IS THE EXPIRATION DATE: 7-18-2008

DATE OF SALE: 6-25-2008

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:

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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

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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

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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

(30)

#7 BUYERS GUIDE

(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:

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http://business.ftc.gov/documents/bus13-dealers-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

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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

(34)

BUYERS GUIDE

Good business practice to sign but not required

Part of the sales contract and overrides any contrary provisions

(35)

BUYERS GUIDE

There is a Federal Penalty for Failure to Comply

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#8 Curbstoning by Licensed Dealer

 Licensed to sell from licensed location(s)

No Right of Way

(37)

#9 Violation of Blue Law

Blue law is still in effect

Cannot sell or offer to sell on any consecutive

Saturday and Sunday

(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

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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

(40)

CONSIGNMENTS

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

(41)

 Auctions are acting as the agent for seller

 All representations or guarantees are seller’s

 Do NOT take customers to auctions

 Most auctions take 21-30 days to get title

 Draft must clear

 Lienholder and/or seller paid

(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

(43)

USER IDs

eTags

Keep user IDs and passwords secure

 Do not share your IDs and password with others

(44)

Technical Issues

Toll free 877-933-2020 or

512-465-4010, Option 2

Temporary Tag Info

Toll free 888-368-4689 or

email:

etag@txdmv.gov

IMPORTANT PHONE NUMBERS-Vision 21

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QUESTIONS?

References

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