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SAFETY EQUIPMENT (division 12 sec 24000) ---
It is unlawful for the vehicle to be on the public road if the following minimum requirements are not met:
Lighting requirements
A. All lamps are to be equipped with the proper voltage of bulbs in proper working order:
Tail lights license plate
Stoplights reverse lights
Headlamp hazard lights
Side marker lights turn signals
B. Vehicles must have correct lenses, front, back and side.
Brake Equipment
A. Emergency brakes- shall be adequate to hold the vehicle stationary on any grade of a hill.
B. Brakes must be able to stop the vehicle from a speed of 20 mph and a stopping distance of 25 feet.
C. Other parts of the braking system that should also be looked at, and that could go defective:
Master cylinder calipers
Hoses (brake lines) wheel cylinders
D. The vehicle should stop in a straight line (no hard pulling).
E. A.B.S. system in proper order.
Windshield and Wipers
A. Every vehicle must have two self-operating wipers 1 on the left and 1 on the right side.
Exception - vehicles that are manufactured with a single wiper, if vehicle is equipped with one wiper blade it must cover the WIPED area requirements.
B. Wiper blades must be in good shape.
C. It is unlawful to operate any motor vehicle when the windshield or rear window is in such a manner as to impair the driver’s vision.
D. No cracks in the windshield
E. No material shall obstruct the view of the driver in any window.
Mirrors
A. Every vehicle must have at least two mirrors.
B. One mirror on the left side (drivers side)
C. One mirror on the inside of the vehicle
D. The right side mirror is required if the rear windows are tinted.
Horn
A. Every vehicle needs a horn in good working order. (Universal horns are okay).
Muffler
A. The muffler must properly operate; no muffler shall be equipped with a cutout, bypass or similar device.
Safety Belts
A. You are required to have seat belts for every seating position and must be in properly working order.
* NOTE: for vehicles from 1972 to 1990 you are required to affix to the left front door the following sticker statement.
Tires
A. You should have a spare tire, and correct tools to change a tire (I.e. Jack, lug wrench)
B. Tires should be at a minimum tread depth of 1/32
C. Tire cannot have cracks, bulges.
D. Toxi Substance Control says - wheel weights made of 0.1% lead cannot be manufactured, sold or installed on any vehicle in California. A $2,500.00 per day fine can be imposed.
* NOTES:
1. NO Dealer or Seller holding a Retail Sellers permit shall sell a new or used vehicle that is in an unsafe manner, unless it is being sold to a dismantler, wholesaler or another dealer.
2. Safety equipment cannot be waived! (Example: sell me the vehicle for a cheaper price and I will take care of the repair myself).
SAFETY EQUIPMENT (division 12 sec 24000) ---
It is unlawful for the vehicle to be on the public road if the following minimum requirements are not met:
Lighting requirements
A. All lamps are to be equipped with the proper voltage of bulbs in proper working order:
Tail lights license plate
Stoplights reverse lights
Headlamp hazard lights
Side marker lights turn signals
B. Vehicles must have correct lenses, front, back and side.
Brake Equipment
A. Emergency brakes- shall be adequate to hold the vehicle stationary on any grade of a hill.
B. Brakes must be able to stop the vehicle from a speed of 20 mph and a stopping distance of 25 feet.
C. Other parts of the braking system that should also be looked at, and that could go defective:
Master cylinder calipers
Hoses (brake lines) wheel cylinders
D. The vehicle should stop in a straight line (no hard pulling).
E. A.B.S. system in proper order.
Windshield and Wipers
A. Every vehicle must have two self-operating wipers 1 on the left and 1 on the right side.
Exception - vehicles that are manufactured with a single wiper, if vehicle is equipped with one wiper blade it must cover the WIPED area requirements.
B. Wiper blades must be in good shape.
C. It is unlawful to operate any motor vehicle when the windshield or rear window is in such a manner as to impair the driver’s vision.
D. No cracks in the windshield
E. No material shall obstruct the view of the driver in any window.
Mirrors
A. Every vehicle must have at least two mirrors.
B. One mirror on the left side (drivers side)
C. One mirror on the inside of the vehicle
D. The right side mirror is required if the rear windows are tinted.
Horn
A. Every vehicle needs a horn in good working order. (Universal horns are okay).
Muffler
A. The muffler must properly operate; no muffler shall be equipped with a cutout, bypass or similar device.
Safety Belts
A. You are required to have seat belts for every seating position and must be in properly working order.
* NOTE: for vehicles from 1972 to 1990 you are required to affix to the left front door the following sticker statement.
Tires
A. You should have a spare tire, and correct tools to change a tire (I.e. Jack, lug wrench)
B. Tires should be at a minimum tread depth of 1/32
C. Tire cannot have cracks, bulges.
D. Toxi Substance Control says - wheel weights made of 0.1% lead cannot be manufactured, sold or installed on any vehicle in California. A $2,500.00 per day fine can be imposed.
* NOTES:
1. NO Dealer or Seller holding a Retail Sellers permit shall sell a new or used vehicle that is in an unsafe manner, unless it is being sold to a dismantler, wholesaler or another dealer.
2. Safety equipment cannot be waived! (Example: sell me the vehicle for a cheaper price and I will take care of the repair myself).
SALES TAX
A. The Sales tax is due on all sales and should be collect by the retailer. (In this case, the dealer is the retailer).
* If the customer’s “registration” address is in a different county what sales tax do you charge?
B. The amount of sales tax you collect depends on the county the customers reside in; in Kern County , it is 7.25%.
C. On what do you charge sales tax?
The amounts of sales tax you collect on a car sale are as follows:
1. Purchase price
2. Document charge
3. Smog fee (does not include smog certificate)
Example:
Price $3000.00
Doc preparation charge $65.00 (July 1, 2012)
Smog inspection $50.00 (maximum charge) not including certificate
Total $ 3115.00 x 7.25%= $225.83
You do not collect sales tax on DMV fees.
Sales permit example:
A. The Sales tax is due on all sales and should be collect by the retailer. (In this case, the dealer is the retailer).
* If the customer’s “registration” address is in a different county what sales tax do you charge?
B. The amount of sales tax you collect depends on the county the customers reside in; in Kern County , it is 7.25%.
C. On what do you charge sales tax?
The amounts of sales tax you collect on a car sale are as follows:
1. Purchase price
2. Document charge
3. Smog fee (does not include smog certificate)
Example:
Price $3000.00
Doc preparation charge $65.00 (July 1, 2012)
Smog inspection $50.00 (maximum charge) not including certificate
Total $ 3115.00 x 7.25%= $225.83
You do not collect sales tax on DMV fees.
Sales permit example:
ADVERTISING~ Violations ---
1.Advertise any specific vehicle for sale without identifying the vehicle by either its Vehicle ID Number (usually the last 6 of the vin) or License Plate number.
Example:
1.Advertise any specific vehicle for sale without identifying the vehicle by either its Vehicle ID Number (usually the last 6 of the vin) or License Plate number.
Example:
2. Advertise the total price of a vehicle without including all costs to the purchaser.
3. Total price of the vehicle as the Document Fee, Smog Inspection, Sales Tax, Registration, and California Tire fees.
4. Represent the dealer documentary prep charge or smog certificate as a governmental fee.
5. Fail to sell a vehicle to any person at the advertised total price (excluding taxes, vehicle license fees, smog, finance charges) while the vehicle remains unsold, unless the advertisement states that the price is only good for a specified time and the time has elapsed.
6. Advertise for sale, sell or purchase for resale any new vehicle of a line-make for which the dealer does not hold a franchise.
Unless:
A. It is an off- highway motor vehicle (subject to identification)
B. A new vehicle that will be substantially altered or modified by a converter prior to resale.
7. Advertise Free merchandise, gifts or service provided by a dealer contingent on the purchase of a vehicle.
8. Advertise vehicles, and related goods or services, at a specified dealer price with the intent not to supply reasonably expectable demand, unless the ad discloses the number of vehicles in stock at the advertised price.
Example:
3. Total price of the vehicle as the Document Fee, Smog Inspection, Sales Tax, Registration, and California Tire fees.
4. Represent the dealer documentary prep charge or smog certificate as a governmental fee.
5. Fail to sell a vehicle to any person at the advertised total price (excluding taxes, vehicle license fees, smog, finance charges) while the vehicle remains unsold, unless the advertisement states that the price is only good for a specified time and the time has elapsed.
6. Advertise for sale, sell or purchase for resale any new vehicle of a line-make for which the dealer does not hold a franchise.
Unless:
A. It is an off- highway motor vehicle (subject to identification)
B. A new vehicle that will be substantially altered or modified by a converter prior to resale.
7. Advertise Free merchandise, gifts or service provided by a dealer contingent on the purchase of a vehicle.
8. Advertise vehicles, and related goods or services, at a specified dealer price with the intent not to supply reasonably expectable demand, unless the ad discloses the number of vehicles in stock at the advertised price.
Example:
~ In addition, whether or not there are sufficient vehicles in stock to supply a reasonably expectable demand when phrases such as “Starting at”, “From”, “Beginning as Low as”, or words of similar use are used in reference to an advertised price; the advertised price shall disclose the number of vehicles in stock.
9. Use the term “Rebate” or Similar words such as “Cash Back” in advertising the sale of a vehicle, unless the rebate is expressed in a specific dollar amount and is in fact a rebate offered by the vehicle manufacturer or distributor directly to the retail purchaser of the vehicle.
10. You cannot require a person to pay a higher price for a vehicle for receiving advertised credit terms, that the cash price a person would have to pay to purchase the same vehicle.
Example:
9. Use the term “Rebate” or Similar words such as “Cash Back” in advertising the sale of a vehicle, unless the rebate is expressed in a specific dollar amount and is in fact a rebate offered by the vehicle manufacturer or distributor directly to the retail purchaser of the vehicle.
10. You cannot require a person to pay a higher price for a vehicle for receiving advertised credit terms, that the cash price a person would have to pay to purchase the same vehicle.
Example:
Cash price means the amount of which the seller would sell and Transfer to the buyer the title to the motor vehicle described in the conditional sale contract and includes all imposed fees such as taxes, doc smog and licensing fees.
11. Advertise a guaranteed trade-in allowance unless the manufacturer or distributor provides the guarantee.
12. Misrepresent the authority of a salesperson, to negotiate the final terms of a transaction.
13. Use the terms “Invoice” “Dealer’s Invoice”, “Wholesale Price” or similar terms that refer to the dealer’s cost for a vehicle in an advertisement or advertise that the selling price of a vehicle is above or below the manufacturer or distributor’s invoice price to a dealer or the dealer’s cost.
Example:
11. Advertise a guaranteed trade-in allowance unless the manufacturer or distributor provides the guarantee.
12. Misrepresent the authority of a salesperson, to negotiate the final terms of a transaction.
13. Use the terms “Invoice” “Dealer’s Invoice”, “Wholesale Price” or similar terms that refer to the dealer’s cost for a vehicle in an advertisement or advertise that the selling price of a vehicle is above or below the manufacturer or distributor’s invoice price to a dealer or the dealer’s cost.
Example:
NOTE: This does not apply to either of the following:
13. A. Any communication occurring during face to face negotiations for the purchase of a specific vehicle if the prospective purchaser initiates a discussion of the vehicle’s invoice price or the dealer’s cost for that vehicle.
B. Any communication between a dealer and a prospective commercial purchaser (i.e., dealer, lesser, lesser retailer, manufacture ect…).
14. Violate any law prohibiting bait and switch advertising.
15. Make any untrue or misleading statement indicating that a vehicle is equipped with the entire factory installed optional equipment that the manufacture offers. Limited to a false statement that a vehicle is “Fully Factory Equipped.”
16. Advertise any underselling claim, such as “ We Have the Lowest Prices” or “ We Will Beat Any Dealer’s Price” unless the dealer has conducted a recent survey showing that the dealer sells its vehicles at lower prices than any other licensee in its trade area and maintains record to adequately substantiate the claims. The substantiating records shall be made available to the department upon request.
17. Display or offer for sale any used vehicle unless there is affixed to the vehicle the Federal Trade Commission’s Buyers Guide as required.
18. It is illegal to use as advertisement a check like coupon or a “Simulated Check”
19. Cannot advertise that there is no money down when in fact there is a down payment required.
20. You cannot offer or advertise for sale any vehicle not actually for sale at the place of business.
21. You must give in writing within 48 hours of the sale of the vehicle to the advertising company notice of sale of that vehicle.
22. The dealer must sell a vehicle at its advertised selling price regardless of whether or not the purchasers aware of the advertised price.
23. The dealership of an advertised vehicle must display a copy of the advertisement in a clear location for the customers to see.
24. If you are selling on the Internet, on either e-bay or other, remember you are still a dealer and you have the same requirements and responsibilities.
Advertising Relating to “Certified” Used Vehicles
1. A “Certified” vehicle that the dealer has had inspected and meets certain requirements deemed by the dealership.
Example: If the dealership advertises a vehicle to as “Certified” because it meets a 25-point inspection, the dealership must have in writing what that 25-point inspection pertains too.
2. Prior to the sale of the vehicle, the dealer must give the buyer a completed inspection report refelecting all the components inspected under the dealership’s Certified Program.
Advertising Restrictions relating to “Certified” Used Vehicles
1. A dealer may NOT advertise a vehicle as “Certified” if….
A. The vehicle has sustained damage from an impact, fire, or flood that substantially impairs its use or safety.
B. The dealer knows or should have known that the vehicle has sustained frame damage.
C. The dealer knows or should have known that the odometer has been rolled back, altered or replaced to show fewer miles than actually driven.
D. The dealer knows or should have known that the vehicle has been repurchased by a dealer or manufacturer due to state or federal warrant laws (a.k.a lemon law).
E. The vehicle’s title has been branded as lemon law buyback manufacturer repurchase, salvage, junk, non-repairable, flood or similar tile given by California or another state.
F. The dealer disclaims any warranties on the vehicle or the vehicle is sold as-is.
ODOMETER (div 12 sec 28050-28050.5)
1. You cannot advertise for sale, to use, or to install on any part of a motor vehicle or an odometer in a motor vehicle any device that causes the odometer to register any miles other than the true miles driven. The true miles driven by the car as registered by the odometer within the manufacture-designed tolerance.
2. You cannot operate a vehicle on any street or highway knowing that the odometer of such vehicle is disconnected or nonfunctional. Odometer must be working at the time of sale.
3. You cannot disconnected, turn back or reset the odometer with the intent to alter the miles on the odometer gauge, nor can you advertise for sale, to sell, or to use any device designed primarily for the purpose of turning back or resetting the miles.
4. Because the odometer must be in proper working order there is nothing that prevents the service, repair or replacement of an odometer, if the mileage indicated remains the same as before the service, repair, or replacement.
NOTE:
If the odometer is incapable of registering the same miles as before the repair the odometer shall be set to zero (0) and a notice in writing shall be attached to the left doorframe of the vehicle by the person performing the service.
Example:
13. A. Any communication occurring during face to face negotiations for the purchase of a specific vehicle if the prospective purchaser initiates a discussion of the vehicle’s invoice price or the dealer’s cost for that vehicle.
B. Any communication between a dealer and a prospective commercial purchaser (i.e., dealer, lesser, lesser retailer, manufacture ect…).
14. Violate any law prohibiting bait and switch advertising.
15. Make any untrue or misleading statement indicating that a vehicle is equipped with the entire factory installed optional equipment that the manufacture offers. Limited to a false statement that a vehicle is “Fully Factory Equipped.”
16. Advertise any underselling claim, such as “ We Have the Lowest Prices” or “ We Will Beat Any Dealer’s Price” unless the dealer has conducted a recent survey showing that the dealer sells its vehicles at lower prices than any other licensee in its trade area and maintains record to adequately substantiate the claims. The substantiating records shall be made available to the department upon request.
17. Display or offer for sale any used vehicle unless there is affixed to the vehicle the Federal Trade Commission’s Buyers Guide as required.
18. It is illegal to use as advertisement a check like coupon or a “Simulated Check”
19. Cannot advertise that there is no money down when in fact there is a down payment required.
20. You cannot offer or advertise for sale any vehicle not actually for sale at the place of business.
21. You must give in writing within 48 hours of the sale of the vehicle to the advertising company notice of sale of that vehicle.
22. The dealer must sell a vehicle at its advertised selling price regardless of whether or not the purchasers aware of the advertised price.
23. The dealership of an advertised vehicle must display a copy of the advertisement in a clear location for the customers to see.
24. If you are selling on the Internet, on either e-bay or other, remember you are still a dealer and you have the same requirements and responsibilities.
Advertising Relating to “Certified” Used Vehicles
1. A “Certified” vehicle that the dealer has had inspected and meets certain requirements deemed by the dealership.
Example: If the dealership advertises a vehicle to as “Certified” because it meets a 25-point inspection, the dealership must have in writing what that 25-point inspection pertains too.
2. Prior to the sale of the vehicle, the dealer must give the buyer a completed inspection report refelecting all the components inspected under the dealership’s Certified Program.
Advertising Restrictions relating to “Certified” Used Vehicles
1. A dealer may NOT advertise a vehicle as “Certified” if….
A. The vehicle has sustained damage from an impact, fire, or flood that substantially impairs its use or safety.
B. The dealer knows or should have known that the vehicle has sustained frame damage.
C. The dealer knows or should have known that the odometer has been rolled back, altered or replaced to show fewer miles than actually driven.
D. The dealer knows or should have known that the vehicle has been repurchased by a dealer or manufacturer due to state or federal warrant laws (a.k.a lemon law).
E. The vehicle’s title has been branded as lemon law buyback manufacturer repurchase, salvage, junk, non-repairable, flood or similar tile given by California or another state.
F. The dealer disclaims any warranties on the vehicle or the vehicle is sold as-is.
ODOMETER (div 12 sec 28050-28050.5)
1. You cannot advertise for sale, to use, or to install on any part of a motor vehicle or an odometer in a motor vehicle any device that causes the odometer to register any miles other than the true miles driven. The true miles driven by the car as registered by the odometer within the manufacture-designed tolerance.
2. You cannot operate a vehicle on any street or highway knowing that the odometer of such vehicle is disconnected or nonfunctional. Odometer must be working at the time of sale.
3. You cannot disconnected, turn back or reset the odometer with the intent to alter the miles on the odometer gauge, nor can you advertise for sale, to sell, or to use any device designed primarily for the purpose of turning back or resetting the miles.
4. Because the odometer must be in proper working order there is nothing that prevents the service, repair or replacement of an odometer, if the mileage indicated remains the same as before the service, repair, or replacement.
NOTE:
If the odometer is incapable of registering the same miles as before the repair the odometer shall be set to zero (0) and a notice in writing shall be attached to the left doorframe of the vehicle by the person performing the service.
Example:
When the service is performed the date and the odometer reading before and after must be stated. No person shall with intent to defraud remove or alter any notice affixed to a vehicle regarding the odometer repair.
5. If an odometer disclosure is required the original signature is required and the customer MUST print their name next to their original signature.
6. If this is business transaction the form must contain both the original signature by the authorized agent and the name of the business.
Exception: Electronic signatures are accepted through a pilot program on applications for salvage certificates for Farmers Insurance Exchange only.
5. If an odometer disclosure is required the original signature is required and the customer MUST print their name next to their original signature.
6. If this is business transaction the form must contain both the original signature by the authorized agent and the name of the business.
Exception: Electronic signatures are accepted through a pilot program on applications for salvage certificates for Farmers Insurance Exchange only.
LABELING REQUIREMENTS
1. A buy-here-pay-here dealer shall affix a label on any used vehicle being offered for retail sale that states the reasonable market value of the vehicle. The label shall have all of the following conditions:
a. The label must be in writing with a heading that reads “REASONABLE MARKET VALUE OF THIS VEHICLE” in at least a 16 bold type and the fair market value must be in at least a 12 bold type.
b. This label must be affixed adjacent to the window sticker that identify the equipment provided with the vehicle if there is no sticker then the label must be located somewhere on the vehicle so it is readable.
2. The label must contain the following information:
a. Information used to determine the reasonable market value of the vehicle. For example the Kelly Blue Book (KBB), Black Book ect…
b. Contain the date the market value was determined
c. Indicate that the reasonable market value is being provided only for comparison for shopping purposes and is not the retail price.
d. Buy here pay here dealers shall give the buyer a copy of any information obtained from the pricing guide.
3. The meaning of Reasonable market value is the value of a used vehicle based on the condition, year, make model and mileage of the vehicle within the last 60 days.
4. Labeling Requirements do not apply to:
a. Any dealer that has 90% of all conditional sale contracts or lease contracts assigned to a third party finance or leasing sources within 45 days of the sale date. This does not include recourse contracts.
b. If the contract is paid within 30days.
c. A lessor who primarily leases vehicles two years old or newer.
d. A dealer that does both of the following:
1. Certifies 100 percent of vehicles in their inventory
2. A dealer that maintains an onsite service and repair facility that is licensed by the Bureau of Automotive Repair and employs a minimum of five master automotive technicians that are certified by ASE.
LICENSING AND REGISTRATION
1. There are different types of Titles that are issued for different reasons.
Certificate of ownership (a.k.a pink slip)
Salvage certificate title.
Lemon Law Buy title
Non Repairable, Cash for Clunkers
If the dealer is selling a vehicle that is a “lemon buy back” the dealer must inform the customer of this and have them sign a paper that states: This vehicle was repurchased by its manufacturer due to a defect in the vehicle pursuant to consumer warranty laws the tile to this vehicle has been permanently branded with the notation "lemon law buy back".
2. Any vehicle that is a lemon law buyback is required to have a decal on the left front doorframe that state the vehicle is a lemon.
3. To transfer a used vehicle last registered in California the dealer must present to the department a completed application to transfer ownership to the buyer. If the dealer has a title the transfer will be easy, just follow the procedures below:
A. Certificate of Title
B. Used report of sale filled out and signed
C. Other documents you may also be required: power of attorney, bills of sales, smog certification, and odometer disclosure.
4. Transfer fees that are required are:
A. $ 15.00 transfer fee (for every vehicle).
B. $ 31.00 registration fee
Example:
1. A buy-here-pay-here dealer shall affix a label on any used vehicle being offered for retail sale that states the reasonable market value of the vehicle. The label shall have all of the following conditions:
a. The label must be in writing with a heading that reads “REASONABLE MARKET VALUE OF THIS VEHICLE” in at least a 16 bold type and the fair market value must be in at least a 12 bold type.
b. This label must be affixed adjacent to the window sticker that identify the equipment provided with the vehicle if there is no sticker then the label must be located somewhere on the vehicle so it is readable.
2. The label must contain the following information:
a. Information used to determine the reasonable market value of the vehicle. For example the Kelly Blue Book (KBB), Black Book ect…
b. Contain the date the market value was determined
c. Indicate that the reasonable market value is being provided only for comparison for shopping purposes and is not the retail price.
d. Buy here pay here dealers shall give the buyer a copy of any information obtained from the pricing guide.
3. The meaning of Reasonable market value is the value of a used vehicle based on the condition, year, make model and mileage of the vehicle within the last 60 days.
4. Labeling Requirements do not apply to:
a. Any dealer that has 90% of all conditional sale contracts or lease contracts assigned to a third party finance or leasing sources within 45 days of the sale date. This does not include recourse contracts.
b. If the contract is paid within 30days.
c. A lessor who primarily leases vehicles two years old or newer.
d. A dealer that does both of the following:
1. Certifies 100 percent of vehicles in their inventory
2. A dealer that maintains an onsite service and repair facility that is licensed by the Bureau of Automotive Repair and employs a minimum of five master automotive technicians that are certified by ASE.
LICENSING AND REGISTRATION
1. There are different types of Titles that are issued for different reasons.
Certificate of ownership (a.k.a pink slip)
Salvage certificate title.
Lemon Law Buy title
Non Repairable, Cash for Clunkers
If the dealer is selling a vehicle that is a “lemon buy back” the dealer must inform the customer of this and have them sign a paper that states: This vehicle was repurchased by its manufacturer due to a defect in the vehicle pursuant to consumer warranty laws the tile to this vehicle has been permanently branded with the notation "lemon law buy back".
2. Any vehicle that is a lemon law buyback is required to have a decal on the left front doorframe that state the vehicle is a lemon.
3. To transfer a used vehicle last registered in California the dealer must present to the department a completed application to transfer ownership to the buyer. If the dealer has a title the transfer will be easy, just follow the procedures below:
A. Certificate of Title
B. Used report of sale filled out and signed
C. Other documents you may also be required: power of attorney, bills of sales, smog certification, and odometer disclosure.
4. Transfer fees that are required are:
A. $ 15.00 transfer fee (for every vehicle).
B. $ 31.00 registration fee
Example:
C. License fee is 2% of 100 % of the vehicle selling cost.
NOTE:
If registration expires before sale VLF will be calculated using the previously established VLF class and depreciation back to the year first sold or asterisk (*) year if one is shown.
D. Other fees may include: Repossession, plates, and substitute sticker.
E. Other fees you will incur are:
CHP-9.00 Finger Print-1.00 Auto/DUI-1.00 Valley air-4.00
Subplate-15.00 Relector-1.00 Safe fee-1.00 (for call boxes)
Example: A vehicle sold with expired tags for $3995.00
3995.00x 2 % = 80.00 (always round off)
registration fee 34.00 auto/dui-1.00 chp-9.00 valley air -4.00
safe fee-1.00 fid 1.00 Total DMV fees= 145.00
5. Permanente Trailer Identification tags (PTI) are good for 5years at the cost of $20.00 every 5 years.
A. A trailer eligible for Permanent Trailer Identification (PTI) purchased from another state is NOT required a vehicle verification if:
1. The trailer has never been registered.
2. The trailer has not been modified, altered, or assembled from a kit.
3. A secured Manufacturer’s Certificate/Statement of Origin (MC0/MS0) is submitted for the complete vehicle.
6. California Tire Recycling Fee 1.75 per tire.(If you charge this fee it must been on your contracts and in your advertisements.)
7. The time you have to complete a transfer of the sale is a total of 30 days after 30 days there will be a penalty.
Note: If the APPLICATION IS FIRST SUBMITTED TO THE DEPARTMENT WITHIN 30 DAYS FROM THE DATE OF SALE, THE DEALER IS ALLOWED AN ADDITIONAL 20 DAYS FROM THE DATE THE ITEM IS CASHIERED FOR A TOTAL OF 50 DAYS FROM THE DATE OF SALE.
8. If a dealer charges a specific amount for licensing on the sold vehicle and this amount is in excess of the fees owed the dealer must return the over paid amount back to the customer whether or not it requested by the purchaser.
9. If a customer elects the Cancellation Option, registration fees are still due on the vehicle and need to be posted. Registration fee can be posted in the dealer’s name or the first buyer’s name. There are no changes in the law dealers must post all fess within 30 days.
10. Once the vehicle has been sold and operated, fees are due if the vehicle doesn’t have currant tags. If the vehicle is returned it is not a is a “void” it is a “Used Vehicle Roll Back”.
11. If the vehicle was returned and fees were collected they must be returned to the customer that brought the vehicle back.
12. If the dealer paid fees to the DMV on a vehicle that was returned the dealer can prorate the fees to the new customer that purchase the same vehicle: however, if the dealer doesn’t sell the vehicle again before the tags that were paid have expired the dealer cannot charge the next customer the fee, the dealer “eats” the fees paid to the DMV.
13. If the customer demanded title and paid the fees to the DMV or to another state themselves the dealer is not required to return any DMV fees.
14. If the customer demands title and fees are due you cannot give the customer the temporary from your ROS. The customer must go and get a one day trip permit from DMV.
15. If the customer is taking the vehicle out of state and wants to pay for the registration in their state they must get a one day trip permit from the DMV.
16. If a dealer charges a specific amount for licensing on the sold vehicle and this amount is in excess of the fees owed to the DMV, the dealer must return the over paid amount back to the customer whether or not it is requested by the purchaser.
17. The dealer can no charge for tags 75 days prior to the tag expiring, but not more than 75 days.
Note: the dealer can go onto the DMV web site and calculate the fees. Go to dmv.ca.gov click on the internet options tab or the “save time. Go online!” computer monitor graphic. Then click on the vehicle registration fee calculator link, select the desired calculation, and follow the instructions on the screen.
One Trip Permits
1. A one trip permit may be used in the following manner:
A. A vehicle being moved on a 1 continuous trip from place with in the state or from another state into this state.
B. A vehicle being moved within 60 days from one place to another for the purpose of participation as a vehicular float or display in a lawful parade or exhibition, provided that the total round trip does not exceed 100 miles.
C. For a new trailer, semi trailer or auxiliary dolly which has never been registered in any state or a used trailer, semi trailer, or auxiliary dolly which is not currently registered to me moved or operated laden with, entering or leaving this state for not more that 5 days as a part of one continuous trip from the place of manufacture for a new vehicle or from the place of dispatch or entry into this state for a used vehicle, to place where the vehicle will be offered for sales.
2. Exemptions under on trip permit when moved or operated under a permit issued by the department, registrations not required of:
A. A vehicle not previously registered while being moved or operated from a dealer’s distributor’s or manufacturer’s place of business to a place where essential parts of the vehicle are to altered or supplied.
B. A vehicle while being moved from a place of storage to another place of storage.
C. A vehicle while being moved to or from a garage or repair shop for the purpose of repairs or alterations.
D. A vehicle being moved or operated for the purpose of dismantling or wrecking the same and permanently removing it from the highways.
E. A vehicle being moved from one place to another for the purpose of inspection by the department, assignment of a vehicle identification number, inspection of pollution control devices or weighing the vehicle.
F. One trip permits do not apply to canes.
Quick titles
The dealer or any person filing an application for Initial registration of a vehicle, Transfer of registration of a vehicle or Issuance of a duplicate certificate of ownership may file for a 72hr title. The DMV may charge a fee of not more than $15.00 plus any other applicable fee to register or transfer a vehicle. This will expedite the completion of the paper work,however this can only be done at the DMV’s headquarters office in Sacramento.
Out of state Deliveries
When a vehicle is sold for registration in another state the following must be done:
A. A completed report of sale (reg 51) and mark it “For registration in another state”.
B. Complete a statement of facts (reg 256) explaining how the vehicle was moved.
C. The buyer must transport the vehicle or move it on a One Trip permit unless registration in the buyer;s home state is obtained prior to movement. Dealer plates cannot be used.
D. Send the reg 256 and 51 except the book copy to
DMV incoming mail m/s a 235
PO Box 944292
Sacramento, CA 94244-2920
Note: vehicles exported on military transports are exempt from this process, however military personnel exporting vehicles via a regular carrier must submit a Reg 32 and comply with export requirements.
NOTE:
Historically the formula for computing late payment penalties assessed on the Registration Fees were computed as a combined percentage of the Registration fee, Vehicle License fee and Weight fee, if any. Now the penalty separates the Registration Fee from the VLF and Weight Fee before computing the late penalty, the VLF and Weight fee penalties will continue to be computed as a percentage of their total. The new penalty structure is effective with original, renewal, and planned non-operation.
NOTE:
If registration expires before sale VLF will be calculated using the previously established VLF class and depreciation back to the year first sold or asterisk (*) year if one is shown.
D. Other fees may include: Repossession, plates, and substitute sticker.
E. Other fees you will incur are:
CHP-9.00 Finger Print-1.00 Auto/DUI-1.00 Valley air-4.00
Subplate-15.00 Relector-1.00 Safe fee-1.00 (for call boxes)
Example: A vehicle sold with expired tags for $3995.00
3995.00x 2 % = 80.00 (always round off)
registration fee 34.00 auto/dui-1.00 chp-9.00 valley air -4.00
safe fee-1.00 fid 1.00 Total DMV fees= 145.00
5. Permanente Trailer Identification tags (PTI) are good for 5years at the cost of $20.00 every 5 years.
A. A trailer eligible for Permanent Trailer Identification (PTI) purchased from another state is NOT required a vehicle verification if:
1. The trailer has never been registered.
2. The trailer has not been modified, altered, or assembled from a kit.
3. A secured Manufacturer’s Certificate/Statement of Origin (MC0/MS0) is submitted for the complete vehicle.
6. California Tire Recycling Fee 1.75 per tire.(If you charge this fee it must been on your contracts and in your advertisements.)
7. The time you have to complete a transfer of the sale is a total of 30 days after 30 days there will be a penalty.
Note: If the APPLICATION IS FIRST SUBMITTED TO THE DEPARTMENT WITHIN 30 DAYS FROM THE DATE OF SALE, THE DEALER IS ALLOWED AN ADDITIONAL 20 DAYS FROM THE DATE THE ITEM IS CASHIERED FOR A TOTAL OF 50 DAYS FROM THE DATE OF SALE.
8. If a dealer charges a specific amount for licensing on the sold vehicle and this amount is in excess of the fees owed the dealer must return the over paid amount back to the customer whether or not it requested by the purchaser.
9. If a customer elects the Cancellation Option, registration fees are still due on the vehicle and need to be posted. Registration fee can be posted in the dealer’s name or the first buyer’s name. There are no changes in the law dealers must post all fess within 30 days.
10. Once the vehicle has been sold and operated, fees are due if the vehicle doesn’t have currant tags. If the vehicle is returned it is not a is a “void” it is a “Used Vehicle Roll Back”.
11. If the vehicle was returned and fees were collected they must be returned to the customer that brought the vehicle back.
12. If the dealer paid fees to the DMV on a vehicle that was returned the dealer can prorate the fees to the new customer that purchase the same vehicle: however, if the dealer doesn’t sell the vehicle again before the tags that were paid have expired the dealer cannot charge the next customer the fee, the dealer “eats” the fees paid to the DMV.
13. If the customer demanded title and paid the fees to the DMV or to another state themselves the dealer is not required to return any DMV fees.
14. If the customer demands title and fees are due you cannot give the customer the temporary from your ROS. The customer must go and get a one day trip permit from DMV.
15. If the customer is taking the vehicle out of state and wants to pay for the registration in their state they must get a one day trip permit from the DMV.
16. If a dealer charges a specific amount for licensing on the sold vehicle and this amount is in excess of the fees owed to the DMV, the dealer must return the over paid amount back to the customer whether or not it is requested by the purchaser.
17. The dealer can no charge for tags 75 days prior to the tag expiring, but not more than 75 days.
Note: the dealer can go onto the DMV web site and calculate the fees. Go to dmv.ca.gov click on the internet options tab or the “save time. Go online!” computer monitor graphic. Then click on the vehicle registration fee calculator link, select the desired calculation, and follow the instructions on the screen.
One Trip Permits
1. A one trip permit may be used in the following manner:
A. A vehicle being moved on a 1 continuous trip from place with in the state or from another state into this state.
B. A vehicle being moved within 60 days from one place to another for the purpose of participation as a vehicular float or display in a lawful parade or exhibition, provided that the total round trip does not exceed 100 miles.
C. For a new trailer, semi trailer or auxiliary dolly which has never been registered in any state or a used trailer, semi trailer, or auxiliary dolly which is not currently registered to me moved or operated laden with, entering or leaving this state for not more that 5 days as a part of one continuous trip from the place of manufacture for a new vehicle or from the place of dispatch or entry into this state for a used vehicle, to place where the vehicle will be offered for sales.
2. Exemptions under on trip permit when moved or operated under a permit issued by the department, registrations not required of:
A. A vehicle not previously registered while being moved or operated from a dealer’s distributor’s or manufacturer’s place of business to a place where essential parts of the vehicle are to altered or supplied.
B. A vehicle while being moved from a place of storage to another place of storage.
C. A vehicle while being moved to or from a garage or repair shop for the purpose of repairs or alterations.
D. A vehicle being moved or operated for the purpose of dismantling or wrecking the same and permanently removing it from the highways.
E. A vehicle being moved from one place to another for the purpose of inspection by the department, assignment of a vehicle identification number, inspection of pollution control devices or weighing the vehicle.
F. One trip permits do not apply to canes.
Quick titles
The dealer or any person filing an application for Initial registration of a vehicle, Transfer of registration of a vehicle or Issuance of a duplicate certificate of ownership may file for a 72hr title. The DMV may charge a fee of not more than $15.00 plus any other applicable fee to register or transfer a vehicle. This will expedite the completion of the paper work,however this can only be done at the DMV’s headquarters office in Sacramento.
Out of state Deliveries
When a vehicle is sold for registration in another state the following must be done:
A. A completed report of sale (reg 51) and mark it “For registration in another state”.
B. Complete a statement of facts (reg 256) explaining how the vehicle was moved.
C. The buyer must transport the vehicle or move it on a One Trip permit unless registration in the buyer;s home state is obtained prior to movement. Dealer plates cannot be used.
D. Send the reg 256 and 51 except the book copy to
DMV incoming mail m/s a 235
PO Box 944292
Sacramento, CA 94244-2920
Note: vehicles exported on military transports are exempt from this process, however military personnel exporting vehicles via a regular carrier must submit a Reg 32 and comply with export requirements.
NOTE:
Historically the formula for computing late payment penalties assessed on the Registration Fees were computed as a combined percentage of the Registration fee, Vehicle License fee and Weight fee, if any. Now the penalty separates the Registration Fee from the VLF and Weight Fee before computing the late penalty, the VLF and Weight fee penalties will continue to be computed as a percentage of their total. The new penalty structure is effective with original, renewal, and planned non-operation.
PRINCIPAL PLACE and BRANCH LOCATION ---
1. An application shall be made for the “Principal place of business”,
as shall be operated and maintained by the applicant in conjunction with the retail sale or sales of vehicles.
NOTE:
The Principal place of business means the place designated by the dealer as the main business or office location inCalifornia.
2. You must have the following when obtaining a dealer license:
A. An office - the office must have an address that is readable from at least 50 ft away.
B. Name of the business (a sign) on the outside of the building of at least 2sq ft.
C. Your dealers’ license, all salesperson licenses and resale’s permit posted.
D. You are required to have a proper display area at all times.
E. A separate parking area for the customers.
F. All owners must take a Pre-licensing course.
G. All owners must call to make an appointment with an Inspector to take a test at the DMV after they have successfully passed the pre-licensing course.
3. You can also display your vehicles for sales off your premises of not more than 1000 ft away from the dealership.
4. When using a multi level unit dwelling house as an office
A. The office must be on the ground floor.
B. The room must be dedicated to the dealership.
C. The office must have a direct entrance into the room.
5. Original license is $151.00.
A. Firm name change address change corporate officer or branch location - $70.00, DMV must be notified before the name change.
.
6. To add a branch location you will need the following:
A. Application OL21, OL902
B. Lease of rental agreement
C. Change to the State Board of Equalization
D. City business license
1. An application shall be made for the “Principal place of business”,
as shall be operated and maintained by the applicant in conjunction with the retail sale or sales of vehicles.
NOTE:
The Principal place of business means the place designated by the dealer as the main business or office location inCalifornia.
2. You must have the following when obtaining a dealer license:
A. An office - the office must have an address that is readable from at least 50 ft away.
B. Name of the business (a sign) on the outside of the building of at least 2sq ft.
C. Your dealers’ license, all salesperson licenses and resale’s permit posted.
D. You are required to have a proper display area at all times.
E. A separate parking area for the customers.
F. All owners must take a Pre-licensing course.
G. All owners must call to make an appointment with an Inspector to take a test at the DMV after they have successfully passed the pre-licensing course.
3. You can also display your vehicles for sales off your premises of not more than 1000 ft away from the dealership.
4. When using a multi level unit dwelling house as an office
A. The office must be on the ground floor.
B. The room must be dedicated to the dealership.
C. The office must have a direct entrance into the room.
5. Original license is $151.00.
A. Firm name change address change corporate officer or branch location - $70.00, DMV must be notified before the name change.
.
6. To add a branch location you will need the following:
A. Application OL21, OL902
B. Lease of rental agreement
C. Change to the State Board of Equalization
D. City business license
TEMPORARY BRANCH LOCATION OR OFF SITE SALES
1. Application OL-73 (used cars) and OL-73A (recreational vehicles) must be submitted within a minimum of ten (10) business days before the temporary branch opening date.
2. A fee of 70.00
3. Sign 2sq. Ft. readable from fifty feet, displayed to identify the dealer and dealers address.
4. Office (a recreational vehicle, portable office or properly identified table will do), in your office you will need to have:
A. Temporary permit issued by the department must be on display.
B. Salesperson license must be on display while working at the site.
C. Signs advising buyers of the “No Cooling Off Period” and “3rd Party Inspection Notice” must be on display.
5. Display an area separate from other dealers participating at the same location. Make sure the public cannot park in the display area.
6. Make sure that the dealer and the all salespersons licenses are visible posted.
7. Property owner approval a copy either a lease/renter agreement or contract, or a copy of the promoter’s notice.
8. Zoning Verification form OL-902 must be completed by the agency governing property (City or County).
9. All fees due to the DMV will be collected before issuing permits.
NOTE:
Applications submitted in less than ten business days will not be accepted. Also, the applications must be submitted to the Inspector having jurisdiction over the temporary branch location. Other offices not having jurisdiction are not able to issue temporary branch permits.
1. Application OL-73 (used cars) and OL-73A (recreational vehicles) must be submitted within a minimum of ten (10) business days before the temporary branch opening date.
2. A fee of 70.00
3. Sign 2sq. Ft. readable from fifty feet, displayed to identify the dealer and dealers address.
4. Office (a recreational vehicle, portable office or properly identified table will do), in your office you will need to have:
A. Temporary permit issued by the department must be on display.
B. Salesperson license must be on display while working at the site.
C. Signs advising buyers of the “No Cooling Off Period” and “3rd Party Inspection Notice” must be on display.
5. Display an area separate from other dealers participating at the same location. Make sure the public cannot park in the display area.
6. Make sure that the dealer and the all salespersons licenses are visible posted.
7. Property owner approval a copy either a lease/renter agreement or contract, or a copy of the promoter’s notice.
8. Zoning Verification form OL-902 must be completed by the agency governing property (City or County).
9. All fees due to the DMV will be collected before issuing permits.
NOTE:
Applications submitted in less than ten business days will not be accepted. Also, the applications must be submitted to the Inspector having jurisdiction over the temporary branch location. Other offices not having jurisdiction are not able to issue temporary branch permits.
OFF SITE DISPLAYS
1. The 30-day limitation applied to non-sales location and events will be applied to temporary branch permits. CVC 11709 and CCR 270.02 and 270.06
2. If you are displaying vehicles at a fair, exposition, or similar exhibit where there are NO sales made you do not need to obtain a branch license, as long as the displays do not exceed 30 days. If you are displaying at such places you will need the following:
A. Post a sign with printed letters at least three inches in height, showing the business name, address of their established place of business.
B. The following statements:
“No sales permitted, or deposits accepted at this location.”
The vehicle or vehicles that are for display need to have a sign posted to identify where the vehicle can be purchased.
3. If you have a person on the display site that is holding a salesperson license even if the person is not with you company the DMV is going to assume that you are attempting a sale at that display.
1. The 30-day limitation applied to non-sales location and events will be applied to temporary branch permits. CVC 11709 and CCR 270.02 and 270.06
2. If you are displaying vehicles at a fair, exposition, or similar exhibit where there are NO sales made you do not need to obtain a branch license, as long as the displays do not exceed 30 days. If you are displaying at such places you will need the following:
A. Post a sign with printed letters at least three inches in height, showing the business name, address of their established place of business.
B. The following statements:
“No sales permitted, or deposits accepted at this location.”
The vehicle or vehicles that are for display need to have a sign posted to identify where the vehicle can be purchased.
3. If you have a person on the display site that is holding a salesperson license even if the person is not with you company the DMV is going to assume that you are attempting a sale at that display.
LICENSING REQUIREMENTS OF DEALERS
1. A dealer must provide and maintain a clear physical division between the dealership and any other type of business conducted at the same location. All licenses must be displayed in a place conspicuous to the public.
NOTE:
If you are conducting other business at the same properties were the dealer has their cars for sale, there must be identifiable marking (poles, markers, lines) that separate the dealership and the other businesses.
2. Dealers’ licenses and plates are valid for 2 years and expire on the last calendar day of the month.
3. Every vehicle dealer licensee must posses a valid Retailer Seller’s permit from the State Board of Equalization. 1-800-400-7115.
Special Note
State board of Equalization has a Pamphlet on tax tips for Motor Vehicle Dealers.
Pamphlet No 34
California State Board of Equalization
450 N ST.
Sacramento, California 94279-0001
1 (800) 400-7115
4. A bond for $50,000.00 is required; by an insurance co. or cash. If a cash bond is given, the cash bond will not be released until 3 year period after the closure of the business.
Exception: “wholesale only” of less than 24 whole sales in a year, the bond will be 10,000.
5. You have 30 days after the expiration of your license to renew your license, but there will be a penalty charge. After the 30 days, you will have to start a new application for a dealer’s license.
NOTE:
If your bond company sends you a cancellation notice even if in error they will also send a notice to the DMV. DO NOT take these notices lightly. You need to follow up and personally handle the reinstatement of your bond. Make sure you also personally handle the reinstatement to the DMV field office. If you mail the reinstatement, make sure you get the letter certified and request a return signature receipt.
6. The DMV will NO longer accept faxes of your bond they must have the bond in their office. Even 1 day after the expiration, the DMV will not accept your bond you will have to file for a new bond.
SO, KEEP YOUR BOND COMPANY AND THE DMV HAPPY.
7. Plate fees are $48.00 for each plate plus county fees
(fee’s vary from county).
8. Forms for your business:
A. Report of Sales, Contracts,
B. Buyers Guides,
C. Dealer jackets for you files
D. Bill of Sale, Power of Attorney, ECT….
9. You must have a locking file cabinet for your titles and report of sales.
10. The correct posted signs.
11. You must have your address and your office hours posted outside your business.
12. The following signs must be posted at every main office, branch and cubical of the business:
(Of not less than 8 inches high and 10 inches wide)
Examples:
1. A dealer must provide and maintain a clear physical division between the dealership and any other type of business conducted at the same location. All licenses must be displayed in a place conspicuous to the public.
NOTE:
If you are conducting other business at the same properties were the dealer has their cars for sale, there must be identifiable marking (poles, markers, lines) that separate the dealership and the other businesses.
2. Dealers’ licenses and plates are valid for 2 years and expire on the last calendar day of the month.
3. Every vehicle dealer licensee must posses a valid Retailer Seller’s permit from the State Board of Equalization. 1-800-400-7115.
Special Note
State board of Equalization has a Pamphlet on tax tips for Motor Vehicle Dealers.
Pamphlet No 34
California State Board of Equalization
450 N ST.
Sacramento, California 94279-0001
1 (800) 400-7115
4. A bond for $50,000.00 is required; by an insurance co. or cash. If a cash bond is given, the cash bond will not be released until 3 year period after the closure of the business.
Exception: “wholesale only” of less than 24 whole sales in a year, the bond will be 10,000.
5. You have 30 days after the expiration of your license to renew your license, but there will be a penalty charge. After the 30 days, you will have to start a new application for a dealer’s license.
NOTE:
If your bond company sends you a cancellation notice even if in error they will also send a notice to the DMV. DO NOT take these notices lightly. You need to follow up and personally handle the reinstatement of your bond. Make sure you also personally handle the reinstatement to the DMV field office. If you mail the reinstatement, make sure you get the letter certified and request a return signature receipt.
6. The DMV will NO longer accept faxes of your bond they must have the bond in their office. Even 1 day after the expiration, the DMV will not accept your bond you will have to file for a new bond.
SO, KEEP YOUR BOND COMPANY AND THE DMV HAPPY.
7. Plate fees are $48.00 for each plate plus county fees
(fee’s vary from county).
8. Forms for your business:
A. Report of Sales, Contracts,
B. Buyers Guides,
C. Dealer jackets for you files
D. Bill of Sale, Power of Attorney, ECT….
9. You must have a locking file cabinet for your titles and report of sales.
10. The correct posted signs.
11. You must have your address and your office hours posted outside your business.
12. The following signs must be posted at every main office, branch and cubical of the business:
(Of not less than 8 inches high and 10 inches wide)
Examples:
13. Must post your license, your sales permit, and any salespersons all must be displayed at the place of business.
14. Automatic cancellation of the special plates and licenses will happen if the dealer does the following:
A. The abandonment of the established place of business or the change of the business without notice to the DMV.
(You must notify the DMV of any changes before you make the changes not after).
B. The failure to maintain an adequate bond or to provide and file another bond at full value.
C. The voluntary or involuntary surrender of plates and license for any cause.
D. Notification to the department that the person designated as licensee has changed.
E. The suspension of the corporate status of the licensee.
F. The suspension of the seller’s permit of the licensee by the State Board of Equalization.
15. License renewals beginning in January 2006 will be as follows:
A. Licenses issued prior to Jan 1, 2006 with a date-in-business in an even year will be issued a two year renewal when the license expires in 2006.
B. Odd year will be issued a two year renewal in 2007.
C. License issued on or after Jan 1, 2006 will be issued a two year renewal term upon the first expiration date of the license.
14. Automatic cancellation of the special plates and licenses will happen if the dealer does the following:
A. The abandonment of the established place of business or the change of the business without notice to the DMV.
(You must notify the DMV of any changes before you make the changes not after).
B. The failure to maintain an adequate bond or to provide and file another bond at full value.
C. The voluntary or involuntary surrender of plates and license for any cause.
D. Notification to the department that the person designated as licensee has changed.
E. The suspension of the corporate status of the licensee.
F. The suspension of the seller’s permit of the licensee by the State Board of Equalization.
15. License renewals beginning in January 2006 will be as follows:
A. Licenses issued prior to Jan 1, 2006 with a date-in-business in an even year will be issued a two year renewal when the license expires in 2006.
B. Odd year will be issued a two year renewal in 2007.
C. License issued on or after Jan 1, 2006 will be issued a two year renewal term upon the first expiration date of the license.
RENEWAL OF YOUR DEALER LICENSE
1. Your dealers’ license can be renewed with in 45 days prior of the expiration.
A. An application OL22 must be filled out.
B. $125.00 for the original application plus
($1.00 Family Support Fee).
C. $100.00 per branch location
D. $70.00 for each dealer plate plus county fee
(every county is different).
E. $72.00 on each motorcycle plate.
F. $75.00 auto broker
NOTE:
Your annual renewal application is a courtesy notice. YOU are responsible to renew your license.
2. To renew your dealer’s license you need a 4-hour Continuing Education Class.(This class is a biannual requirement)
3. Duplicate fees for your dealers’ plates
Registration card $18.00
Replacement sticker $18.00
Replacement plate $18.00
Duplicate firm license $18.00
1. Your dealers’ license can be renewed with in 45 days prior of the expiration.
A. An application OL22 must be filled out.
B. $125.00 for the original application plus
($1.00 Family Support Fee).
C. $100.00 per branch location
D. $70.00 for each dealer plate plus county fee
(every county is different).
E. $72.00 on each motorcycle plate.
F. $75.00 auto broker
NOTE:
Your annual renewal application is a courtesy notice. YOU are responsible to renew your license.
2. To renew your dealer’s license you need a 4-hour Continuing Education Class.(This class is a biannual requirement)
3. Duplicate fees for your dealers’ plates
Registration card $18.00
Replacement sticker $18.00
Replacement plate $18.00
Duplicate firm license $18.00
USE OF SPECIAL PLATES
1. A licensed dealer (owner) may use a dealer plate on any vehicle for any purpose, business or pleasure. (So as long as the vehicle is in inventory).
Example #12
2. A prospective purchaser may test drive a dealer plated vehicle owned by a dealer for reasonable period of time including taking the vehicle overnight or for a weekend, but not exceed 7 days.
Note:
If your vehicle is taken overnight or longer you need to write out a letter of authorization stating the time out, returned time, and return date.
3. Your dealer plate also should have attached the registration card for the plate and the insurance card for the business.
Example:
1. A licensed dealer (owner) may use a dealer plate on any vehicle for any purpose, business or pleasure. (So as long as the vehicle is in inventory).
Example #12
2. A prospective purchaser may test drive a dealer plated vehicle owned by a dealer for reasonable period of time including taking the vehicle overnight or for a weekend, but not exceed 7 days.
Note:
If your vehicle is taken overnight or longer you need to write out a letter of authorization stating the time out, returned time, and return date.
3. Your dealer plate also should have attached the registration card for the plate and the insurance card for the business.
Example:
4. Other ways dealer plates may be used:
A. To transport a vehicle that is being delivered for sale
B. Rented or leased to vehicle salesmen in the course of their employment for purposes of display or demonstration.
C. An employee in the course of business.
5. Dealer plates may not be used to the extended family members, unless the vehicle is used in conjunction with the firm’s business activities.
6. When a dealer uses their dealer plate it is to be placed in the rear of the vehicle where the plate should be, even over the existing plate if there is one.
7. If a salesperson is not present at a test drive, a letter of authorization must accompany the test drive stating the duration of the test drive.
8. Any trailer owned may be towed on a dealer plate; if the towing vehicle has currant plates not dealer plates.
The Report of Sale
R.O.S is a 4-part form for reporting retail sales of used vehicles.
(This form is not to be used for wholesale sales).
Part 1: The application copy is the upper portion of the ROS and is submitted to the DMV with all other forms and fees required to complete the application.
Part 2: Purchaser’s temporary operation copy is the bottom portion of the original. (The tempory copy is good for 90 days).
This operating copy is to be displayed in the vehicle so that it may be read from the outside of the vehicle, and placed in the lower passenger side front windshield.
It is recommended to provide privacy to the purchaser, the operating copy should be folded so that only the upper portion where the make and vehicle ID number is shown.
Part 3: You need to mail the dealer’s notice (bottom copy of the temporary permit) to the department headquarters in Sacramento no later than the fifth calendar day following the sale date.
Part 4: This part is your copy and you must retain this copy for 4 years.
NOTE:
1. The temporary copy is good for 6 months or when the purchaser receives the license and registration, which ever comes first?
NOTE:
2. When the notice is submitted as required the dealer is released from civil liability arising from the operation of the vehicle.
NOTE:
3. The report of sales is numbered and is assigned to the dealer and may not be shared by any other dealer.
To void a R.O.S you put VOID across all copies and fill out a Statement of Facts why the sale was voided and that vehicle was not operated; retain all copied of the voided ROS and the Statement of Facts.
When ordering more used report of sales go to www.dmv.ca.gov form number OL IN-12 .
4. Dealers can obtain ROS using one of the following 2 options:
Option 1- May 1, 2012 by mail at apps.dmv.ca.gov/forms/ol/ol395u.pdf
(Supplies maybe limited so only order 6-month supply at first.)
Option 2- May 16, 2012 from an OL Inspector
5. Special handling of the old ROS forms- on July 1, 2012 the old ROS will become void.
A. Destroy the old ROS forms by shredding or otherwise, make them some how unusable
B. The dealer must list the old ROS serial numbers on company letterhead and make a statement to the fact that the old ROS have been destroyed and have 2 people sign and date and confirm in writing that the listed ROS forms have been destroyed.
C. The dealer must retain the signed document certifying the destruction of the old ROS.
6. Record, Maintenance and Storage Options
Previous requirements required the dealer to keep the storage records in the office under lock and key for 4 years. The new requirements are that records must be kept on the premises for 18 months and then can be moved to an offsite storage facility within the state, third party vendor to maintain the records or create an electronic copy of the original business record.
7. The gross vehicle weight rating (GVWR) is required for all 11,500 or less pickup trucks when using the following forms:
- Verification of Vehicle (reg31)
- Application for Registration of New Vehicle (reg397)
- Used vehicle Report of Sales (reg51)
8. Vehicles with a body type model (BTM) of (PK) pickup, (PC) club cab pickup, (3C) 3-door extended cab pickup, or (4C) 4-door extended cab pickup must include the GVWR.
9. Vehicles with a 11,500 GVWR or more do not have a (BTM) of (PK) pickup, (PC) club cab pickup, (3C) 3-door extended cab pickup, or (4C) 4-door extended cab.
10. If a pickup of 11,500 or more has a BTM of PK, PC, 3C, or 4C the correct BTM must be changed on the forms REG 397, REG 31 and REG 51 or the application to register will be returned by DMV.
11. If the Federal Certification Label is missing and the unladen with is over 6,000 pounds; the applicant must complete a REG 256 stating what is the GVWR and how they determined the GVWR weight or they can obtain documentation from the vehicles manufacturer confirming the GVWR.
Electronic Document Processing
1. Electronic document processing authorizes a dealer under a contractual agreement with DMV as a private industry partner to charge a document-processing fee not to exceed $80.00.
2. The EVR fee is in addition to the dealers document-processing fee and must be itemized on the sales contract and cannot be represented as a governmental fee.
3. The EVR fee cannot exceed the amount actually charged by the first-line service provider.
4. This does not apply to sellers of RV, off-road or motorcycle products and does not become an unlawful act until 10/01/2012
National Motor Vehicle Title Information System (NMVTIS)
1.The seller of any used vehicle must have possession of information from the National Motor Vehicle Title Information System.
2. If the information form the NMVTIS report indicates a title that has been brand the seller must post a warning notice near the buyer’s guide. The notice must contain language specified in statute, except for the title. “Warning” must be printed in 18-point bold black print, on at least a 4X5 inch red background. The “Warning” sticker itself must be 14-point bold type.
The sticker shall read:
The following companies are available TO PROVIDE NMVTIS report for a fee:
Auto Data Direct, Inc www.add123.com
Carco Group www.checkthatvin.com
InstaVin www.instavin.com
DMV Desk (dealers only) www.dmvdesk.com
Rig Dig (trucks only) www.rigdig.com
Auto Data Direct, Inc www.add123.com
Carco Group www.checkthatvin.com
InstaVin www.instavin.com
DMV Desk (dealers only) www.dmvdesk.com
Rig Dig (trucks only) www.rigdig.com
FEDERAL BUYERS GUIDE
1. For every vehicle that is for sale on the dealers lot there needs to be a buyer’s guide in the window, which states whether the vehicle is with a warranty or without a warranty.
2. If the vehicle has a warranty, the buyer’s guide needs to state what is covered in the warranty.
Example:
1. For every vehicle that is for sale on the dealers lot there needs to be a buyer’s guide in the window, which states whether the vehicle is with a warranty or without a warranty.
2. If the vehicle has a warranty, the buyer’s guide needs to state what is covered in the warranty.
Example:
3. If the buyer (s) sign the buyer’s guide and a signed copy is given to the customer you must include a disclosure near the signature line that says: “I hereby acknowledge receipt of the Buyers Guide at the closing of this sale”. The signature line and the required disclosuremust appear in the space provided for the name of the individual to contact in the event of complaints after the sale.
4. Your dealer name and contact name needs to be on the back of the buyer’s guide.
Examples:
4. Your dealer name and contact name needs to be on the back of the buyer’s guide.
Examples:
5. If you conduct a used car transaction in Spanish, you must post a Spanish language Buyers Guide on the vehicle before you display or offer it for sale.
6. The Buyers Guide on your vehicle is part of the sales contract, so there is no need to add an addition disclosure to your contract.
7. On the Buyers Guide fill in the percentage of parts and labor costs covered by the warranty in the spaces provided. If a deductible applies to repairs made under the warranty, put an asterisk next to the number and explain the deductible in the “Systems Covered/Duration”
8. There are 2 columns on the Buyers Guide, on the left hand column is the specific item that each system is covering on the warranty, and on the right hand is the length of the warranty for each system covered.
9. If the manufacturer’s warranty still applies you disclose this fact by checking the “Warranty” box and include this disclosure in the “Systems covered/duration”, “MANUFACTURER’S WARRANTY STILL APPLIES”.
the disclosure must be stated in the exact language above, FTC prohibits phrases like “balance of factory warranty”.
10. If the consumer must pay to get coverage under the manufacturer’s warranty, you may not check the “Warranty” box. This type of coverage is considered a service contract. HOWEVER, you can check the warranty box if the dealer pays for the coverage.
11. If you provide a warranty in addition to the unexpired manufacturer’s warranty, explain the terms of you warranty on the Buyers Guide.
12. If the consumer negotiates changes in the warranty, the Buyers Guide must reflect these changes.
Example: 50% parts 50% labor and you negotiate no warranty; you cross out on the Buyers Guide and add the changes.
13. Exceptions to the FTC rule are motorcycles, vehicles sold for scrap, or agricultural equipment.
14. At Public auctions the dealers and the Auction company must also comply with the Buyers Guide rule. (This rule does not apply to dealer only auctions.)
6. The Buyers Guide on your vehicle is part of the sales contract, so there is no need to add an addition disclosure to your contract.
7. On the Buyers Guide fill in the percentage of parts and labor costs covered by the warranty in the spaces provided. If a deductible applies to repairs made under the warranty, put an asterisk next to the number and explain the deductible in the “Systems Covered/Duration”
8. There are 2 columns on the Buyers Guide, on the left hand column is the specific item that each system is covering on the warranty, and on the right hand is the length of the warranty for each system covered.
9. If the manufacturer’s warranty still applies you disclose this fact by checking the “Warranty” box and include this disclosure in the “Systems covered/duration”, “MANUFACTURER’S WARRANTY STILL APPLIES”.
the disclosure must be stated in the exact language above, FTC prohibits phrases like “balance of factory warranty”.
10. If the consumer must pay to get coverage under the manufacturer’s warranty, you may not check the “Warranty” box. This type of coverage is considered a service contract. HOWEVER, you can check the warranty box if the dealer pays for the coverage.
11. If you provide a warranty in addition to the unexpired manufacturer’s warranty, explain the terms of you warranty on the Buyers Guide.
12. If the consumer negotiates changes in the warranty, the Buyers Guide must reflect these changes.
Example: 50% parts 50% labor and you negotiate no warranty; you cross out on the Buyers Guide and add the changes.
13. Exceptions to the FTC rule are motorcycles, vehicles sold for scrap, or agricultural equipment.
14. At Public auctions the dealers and the Auction company must also comply with the Buyers Guide rule. (This rule does not apply to dealer only auctions.)
WARRANTY “Full” or “Limited”
1. For a warranty to be considered “full” the following will apply:
A. Warranty service must be provided to anyone who owns the vehicle during the warranty period.
B. Warranty service must be provided free of charge.
C. The consumer must be able to choose either a replacement or a refund or the vehicle if the vehicle cannot be repaired after a reasonable number of tries.
D. The consumer is not required to take any action to receive service, except to give notice (appointment).
You must maintain in the area sufficient service and repair facilities reasonably close to all areas where the consumer can take their vehicle.
NOTE:
1. FTC prohibits the use of phrases such as “drive train” or “power train”.
NOTE:
2. An expressed or implied warranty is easy to make and do not necessarily need to be written down and the length of implied or expressed warranty is not limited.
1. For a warranty to be considered “full” the following will apply:
A. Warranty service must be provided to anyone who owns the vehicle during the warranty period.
B. Warranty service must be provided free of charge.
C. The consumer must be able to choose either a replacement or a refund or the vehicle if the vehicle cannot be repaired after a reasonable number of tries.
D. The consumer is not required to take any action to receive service, except to give notice (appointment).
You must maintain in the area sufficient service and repair facilities reasonably close to all areas where the consumer can take their vehicle.
NOTE:
1. FTC prohibits the use of phrases such as “drive train” or “power train”.
NOTE:
2. An expressed or implied warranty is easy to make and do not necessarily need to be written down and the length of implied or expressed warranty is not limited.
WARRANTY UNDER A BUY HERE PAY HERE AND LEASED VEHICLES: No dealer or lessor shall sell a vehicle or lease a vehicle at retail price without giving the consumer a written warranty. Definition of a Buyer here Pay here dealer- a dealer or lessor that enters into a contract or lease agreement, that holds more than 10% of their notes. The written Warranty must have the following:
1. Duration of at least 30days or 1,000 miles. Miles and Date shown on the contract. (Whichever occurs first)
2. The dealer can repair the vehicle themselves, pay for the cost of the repairs, or cancel the sale or lease contract with a full refund of the purchase price including fees and any repairs made to the vehicle. (The dealer must have a B.A.R license to repair a vehicle).
3. The warranty shall provide that the dealer shall pay 100% of parts and labor and cannot charge the customer.
4. The written warranty shall cover the minimum requirements below:
a. Engine, including all internally lubricated parts
b. Transmission and transaxle
c. Front and rear wheel drive components
d. Engine cooling system
e. Alternator, generator, starter and ignition system, not including the battery
f. Braking system
g. Front and rear suspension systems
h. Steering system and components
i. Seatbelts and inflatable restraint systems
j. Catalytic converter and other emissions components necessary for the vehicle to pass a California emissions test
k. Heater
l. Seals and gaskets on components described
m. Electrical, electronic, and computer components, to the extent that those components substantially affect the functionality of other components.
5. The Buyers Guide that is displayed on every vehicle offered for sale or lease by the dealer shall list each of the above systems and components and shall specify that the dealer will pay 100% of the cost of parts and labor for repairs covered by the warranty; 30 days or 1,000 miles which ever comes first.
6. If the buyer has notified the dealer that the vehicle has a problem that may be covered under the warranty before the warranty has expired, yet the dealer did not get a chance to repair the problem the dealer is still liable for the repairs or refund.
7. This warranty does not apply to any tampering, unauthorized or unreasonable use of the vehicle following the sale.
8. In regards to this warranty especially #6 & 7 the burden of proof is on the dealer.
9. The dealer shall not sell any vehicle unless this warranty is attached.
10. Regardless of whether or not the customer is aware of this warranty the law overrides any exceptions or exemptions.
11. The dealer cannot waive this warranty to sell a vehicle.
This Warranty does not apply to:
1. Any dealer that has 90% of all conditional sale contracts or lease contracts assigned to a third party finance or leasing sources within 45 days of the sale date. This does not include recourse contracts.
2. If the contract is paid within 30days.
3. A lessor who primarily leases vehicles that are two years old or newer.
4. A dealer that does both of the following:
a. Certifies 100 percent of vehicles in their inventory.
b. A dealer that maintains an onsite service and repair facility that is licensed by the Bureau of Automotive Repair and employs a minimum of five master automotive technicians that are certified by ASE.
Notice to cancel the sale or lease of a vehicle:
1. If the dealer elects to cancel the sale or lease of the vehicle (this is for the purpose of the warranty) the dealer must notify the consumer by personal delivery or first-class mail.
2. The consumer must return the vehicle to the dealer in the same condition as when the consumer purchased it; with the exception of the defective problem.
3. The dealer shall provide the consumer with a return receipt with the following:
a. The date the vehicle was returned to the dealer
b. The vehicle identification number
c. The make, year, and model of the vehicle
d. The odometer reading at the time that the vehicle was returned to the dealer
e. A statement that the dealer has canceled the sale
f. The amount that the dealer refunded the consumer
4. The dealer shall refund the consumer no later than the day after the day on which the buyer returns the vehicle and the notice of election to cancel is given to the buyer.
5. The dealer may charge a reasonable amount for wear and tear on the returned vehicle (given there was any). This wear and tear is not included in any damages that came from the vehicles warranty problem.
6. Example: If an axle come loose causing the tire to fly off and did damage to the body; the customer would not have to pay the for the body damage or axle damage since it was do to the warranty problem.
7. The dealer cannot treat any return vehicle as repossession. The dealer must secure the proper paperwork for the consumer to sign.
A Buy Here Pay Here Dealer or Leaser collecting payments:
1. A dealer cannot require the buyer to make payments in person at their dealership.
2. This law does not apply to the down payment of the vehicle.
3. The dealer cannot repossess the vehicle because the payments were not made at the dealership. ** A dealer who violates any of the Buy Here Pay Here rules is subject to a misdemeanor, infraction and a $1000.00 fine.
Use of Electronic Tracking Technology aka G.P.S and Starter Interrupt Technology:
1. The use of a GPS can only be used:
a. With the buyer’s written consent
b. To verify and maintain the operational status of the GPS
c. To repossess the vehicle
d. To locate the vehicle to service the loan
e. To keep the loan current
f. To obtain or record the location of the vehicle
2.If the buyer agrees to utilize the GPS for their personal use, a separate agreement form from the contract must be made and is not a condition of the purchase of the vehicle. This agreement must be executed after the completion of the purchase of the vehicle and can be canceled at any time.
3.The dealer cannot use a GPS with starter interrupt technology unless the following is met:
a. Notifies the buyer in writing at the time of the sale that the vehicle is equipped with a starter interrupt technology which the dealer can use a remote to shut the vehicle down.
b. A written disclosure provided to the buyer at the time of sale informs the buyer that a warning will be provided no less than 48 hours before the use of the shut down of the vehicle.
c. A choice of warning to the manner and method in which the shut down will occur. This warning will be given to the buyer in writing through cell phone, text message, email or other.
d. In the event of an emergency the buyer has the right to have their vehicle enabled within 24 hours after the vehicle’s initial disablement.
SERVICE CONTRACT
1. Every service contract shall obligate the service contract seller to:
A. Provide to the buyer of the product the services and functional parts that may be necessary to maintain proper operation of the entire product under normal operation.
B. Service for the duration of the service contract and without additional charge.
2. The service contract shall contain all the following information:
A. A clear description and identification of the covered product.
B. The point in time or event when the term of the service contract commences, and its duration measured by elapsed time or an objective measure of use.
C. If the service contract is limited to the original buyer or is limited to persons other than every consumer owner of the covered product during the term of the service contract.
D. A statement of the general obligation of the service contract, any services, parts, characteristics, components, properties, defects, malfunctions, causes, conditions, repairs, or remedies that are excluded from the scope of the service contract. In addition, any limitations that may apply such as, a limit of service calls, any preventive maintains and how often it needs to be maintained.
E. Step by step procedures that the customer has to go thru to get service done.
F. An explanation of the steps that the service contract seller will take to carry out its obligations under the service contract.
G. A description of any right to cancel the contract if the buyer returns the product or the product is sold, lost, stolen, or destroyed or if there is not right to cancel or the right to cancel is limited.
H. A statement identifying the person who is financially and legally obligated to perform the services specified in the service contract including the name and address.
1. Duration of at least 30days or 1,000 miles. Miles and Date shown on the contract. (Whichever occurs first)
2. The dealer can repair the vehicle themselves, pay for the cost of the repairs, or cancel the sale or lease contract with a full refund of the purchase price including fees and any repairs made to the vehicle. (The dealer must have a B.A.R license to repair a vehicle).
3. The warranty shall provide that the dealer shall pay 100% of parts and labor and cannot charge the customer.
4. The written warranty shall cover the minimum requirements below:
a. Engine, including all internally lubricated parts
b. Transmission and transaxle
c. Front and rear wheel drive components
d. Engine cooling system
e. Alternator, generator, starter and ignition system, not including the battery
f. Braking system
g. Front and rear suspension systems
h. Steering system and components
i. Seatbelts and inflatable restraint systems
j. Catalytic converter and other emissions components necessary for the vehicle to pass a California emissions test
k. Heater
l. Seals and gaskets on components described
m. Electrical, electronic, and computer components, to the extent that those components substantially affect the functionality of other components.
5. The Buyers Guide that is displayed on every vehicle offered for sale or lease by the dealer shall list each of the above systems and components and shall specify that the dealer will pay 100% of the cost of parts and labor for repairs covered by the warranty; 30 days or 1,000 miles which ever comes first.
6. If the buyer has notified the dealer that the vehicle has a problem that may be covered under the warranty before the warranty has expired, yet the dealer did not get a chance to repair the problem the dealer is still liable for the repairs or refund.
7. This warranty does not apply to any tampering, unauthorized or unreasonable use of the vehicle following the sale.
8. In regards to this warranty especially #6 & 7 the burden of proof is on the dealer.
9. The dealer shall not sell any vehicle unless this warranty is attached.
10. Regardless of whether or not the customer is aware of this warranty the law overrides any exceptions or exemptions.
11. The dealer cannot waive this warranty to sell a vehicle.
This Warranty does not apply to:
1. Any dealer that has 90% of all conditional sale contracts or lease contracts assigned to a third party finance or leasing sources within 45 days of the sale date. This does not include recourse contracts.
2. If the contract is paid within 30days.
3. A lessor who primarily leases vehicles that are two years old or newer.
4. A dealer that does both of the following:
a. Certifies 100 percent of vehicles in their inventory.
b. A dealer that maintains an onsite service and repair facility that is licensed by the Bureau of Automotive Repair and employs a minimum of five master automotive technicians that are certified by ASE.
Notice to cancel the sale or lease of a vehicle:
1. If the dealer elects to cancel the sale or lease of the vehicle (this is for the purpose of the warranty) the dealer must notify the consumer by personal delivery or first-class mail.
2. The consumer must return the vehicle to the dealer in the same condition as when the consumer purchased it; with the exception of the defective problem.
3. The dealer shall provide the consumer with a return receipt with the following:
a. The date the vehicle was returned to the dealer
b. The vehicle identification number
c. The make, year, and model of the vehicle
d. The odometer reading at the time that the vehicle was returned to the dealer
e. A statement that the dealer has canceled the sale
f. The amount that the dealer refunded the consumer
4. The dealer shall refund the consumer no later than the day after the day on which the buyer returns the vehicle and the notice of election to cancel is given to the buyer.
5. The dealer may charge a reasonable amount for wear and tear on the returned vehicle (given there was any). This wear and tear is not included in any damages that came from the vehicles warranty problem.
6. Example: If an axle come loose causing the tire to fly off and did damage to the body; the customer would not have to pay the for the body damage or axle damage since it was do to the warranty problem.
7. The dealer cannot treat any return vehicle as repossession. The dealer must secure the proper paperwork for the consumer to sign.
A Buy Here Pay Here Dealer or Leaser collecting payments:
1. A dealer cannot require the buyer to make payments in person at their dealership.
2. This law does not apply to the down payment of the vehicle.
3. The dealer cannot repossess the vehicle because the payments were not made at the dealership. ** A dealer who violates any of the Buy Here Pay Here rules is subject to a misdemeanor, infraction and a $1000.00 fine.
Use of Electronic Tracking Technology aka G.P.S and Starter Interrupt Technology:
1. The use of a GPS can only be used:
a. With the buyer’s written consent
b. To verify and maintain the operational status of the GPS
c. To repossess the vehicle
d. To locate the vehicle to service the loan
e. To keep the loan current
f. To obtain or record the location of the vehicle
2.If the buyer agrees to utilize the GPS for their personal use, a separate agreement form from the contract must be made and is not a condition of the purchase of the vehicle. This agreement must be executed after the completion of the purchase of the vehicle and can be canceled at any time.
3.The dealer cannot use a GPS with starter interrupt technology unless the following is met:
a. Notifies the buyer in writing at the time of the sale that the vehicle is equipped with a starter interrupt technology which the dealer can use a remote to shut the vehicle down.
b. A written disclosure provided to the buyer at the time of sale informs the buyer that a warning will be provided no less than 48 hours before the use of the shut down of the vehicle.
c. A choice of warning to the manner and method in which the shut down will occur. This warning will be given to the buyer in writing through cell phone, text message, email or other.
d. In the event of an emergency the buyer has the right to have their vehicle enabled within 24 hours after the vehicle’s initial disablement.
SERVICE CONTRACT
1. Every service contract shall obligate the service contract seller to:
A. Provide to the buyer of the product the services and functional parts that may be necessary to maintain proper operation of the entire product under normal operation.
B. Service for the duration of the service contract and without additional charge.
2. The service contract shall contain all the following information:
A. A clear description and identification of the covered product.
B. The point in time or event when the term of the service contract commences, and its duration measured by elapsed time or an objective measure of use.
C. If the service contract is limited to the original buyer or is limited to persons other than every consumer owner of the covered product during the term of the service contract.
D. A statement of the general obligation of the service contract, any services, parts, characteristics, components, properties, defects, malfunctions, causes, conditions, repairs, or remedies that are excluded from the scope of the service contract. In addition, any limitations that may apply such as, a limit of service calls, any preventive maintains and how often it needs to be maintained.
E. Step by step procedures that the customer has to go thru to get service done.
F. An explanation of the steps that the service contract seller will take to carry out its obligations under the service contract.
G. A description of any right to cancel the contract if the buyer returns the product or the product is sold, lost, stolen, or destroyed or if there is not right to cancel or the right to cancel is limited.
H. A statement identifying the person who is financially and legally obligated to perform the services specified in the service contract including the name and address.
SMOG REQUIREMENTS
1. A smog test is required on all vehicles that are for sale; offered for sale, and vehicles requiring a transfer for registration.
2. Your smog certificate is valid for two years or until the vehicle is sold and registered to a retail buyer which ever occurs first.
3. The fee a dealer can charge to the customer for the smog inspection is fifty (50) dollars and 8.25 for the certificate of compliance.
4. If it cost the dealer more than the $50.00 the dealer cannot pass this cost onto the customer.
5. If the vehicle is not ready for sale because of the smog and the vehicle is near other cars that are for sale you should put a paper in the window that states:
6. For dealers and private parties that sell a diesel powered vehicle with a GVW in excess of 14,000 lbs must make the following disclosure in writing to the buyer :
“An on-road heavy duty diesel or alternative-diesel vehicle operated in California may be subject to the California Air Resources Board Regulation to Reduce Particulate Matter and Criteria Pollutant Emissions from In-Use Heavy Duty Diesel Vehicles. It therefore could be subject to exhaust retrofit or accelerated turnover requirements to reduce emissions of air pollutants.” For more information refer to www.arb.ca.gov/dieseltruck.
This mandate is found in Title 13 California code of Regulations 2025(w)
Not for sale: this vehicle is presently not in compliance with the California vehicle pollution control laws and may not be sold until a valid certificate of compliance has been issued.
1. A smog test is required on all vehicles that are for sale; offered for sale, and vehicles requiring a transfer for registration.
2. Your smog certificate is valid for two years or until the vehicle is sold and registered to a retail buyer which ever occurs first.
3. The fee a dealer can charge to the customer for the smog inspection is fifty (50) dollars and 8.25 for the certificate of compliance.
4. If it cost the dealer more than the $50.00 the dealer cannot pass this cost onto the customer.
5. If the vehicle is not ready for sale because of the smog and the vehicle is near other cars that are for sale you should put a paper in the window that states:
6. For dealers and private parties that sell a diesel powered vehicle with a GVW in excess of 14,000 lbs must make the following disclosure in writing to the buyer :
“An on-road heavy duty diesel or alternative-diesel vehicle operated in California may be subject to the California Air Resources Board Regulation to Reduce Particulate Matter and Criteria Pollutant Emissions from In-Use Heavy Duty Diesel Vehicles. It therefore could be subject to exhaust retrofit or accelerated turnover requirements to reduce emissions of air pollutants.” For more information refer to www.arb.ca.gov/dieseltruck.
This mandate is found in Title 13 California code of Regulations 2025(w)
Not for sale: this vehicle is presently not in compliance with the California vehicle pollution control laws and may not be sold until a valid certificate of compliance has been issued.
SMOG EXCEPTIONS:
A. Vehicles being transferred for the purpose of being wrecked or dismantled; sold thru a Dealer Only Auction; a wholesaler; or another licensed Dealer.
B. 1975 and older
C. Motorcycles
D. Diesel powered vehicle
A. Vehicles being transferred for the purpose of being wrecked or dismantled; sold thru a Dealer Only Auction; a wholesaler; or another licensed Dealer.
B. 1975 and older
C. Motorcycles
D. Diesel powered vehicle
EXEMPTIONS:
1. Vehicles 6yrs or newer do not a need Bi-Annual Smog
*You charge a $12.00 smog abatement fee
2. Vehicles 4yrs or newer do not need a Bi- Annual smog to transfer.
* You charge an $8.00 smog transfer fee.
NOTE:
In some transaction you will charge both fees depending when the application for “transfer” is submitted to the DMV. This exemption does not apply to Out of State or Salvage vehicles.
REGULATIONS OF THE BUREAU OF AUTOMOTIVE REPAIR (BAR)
1. If you plan to repair any vehicle after the sale of the vehicle then it is recommended that you apply for an automotive repair license.
2. An automotive repair license will allow you to work on any vehicle that is owned by someone else.
3. The Bureau of Automotive Repair has their own set of laws that you can obtain in their Write it Right booklet.
STOLEN VEHICLE PREVENTION
1. Protect yourself when purchasing a vehicle, use basic common sense, and do not get greedy.
Note: If you do purchase a stolen vehicle you will lose, because the vehicle will always go back to the original owner.
2. These are some tips to watch out for when purchasing a vehicle
(even from a wholesaler):
A. Check the vehicle id number against the title and make sure the vehicle id numbers and license plate numbers match.
B. Be aware of any vehicle that only has a bill of sale or a duplicate application for title.
C. Check the I.D. of the person you’re buying from to make sure it is the person on the title.
3. You can obtain a Vehicle Registration Inquire Number from the DMV that can tell you about any information on a vehicle (i.e. DOJ stops, plates or lien holders).
HISTORY DISCLOSURE REQUIREMENTS Div. 3.6 9990 and 11705 A14
1. Failure to disclose or intentionally “Fraud” and “Deceit”, include, but are not limited to, a misrepresentation in any manner, whether intentionally false or due to gross negligence, of a material fact; a promise or representation not made honestly and in good faith; an intention to failure to disclose a material fact.
2. Dealer must disclose in writing any known damage of the vehicle.
Examples:
A. Any damage to the frame or drive train of the vehicle
B. Any damage to the suspension of the vehicle requiring repairs other than wheel balancing or alignment
C. Fame damage
3. Any condition of the vehicle such as:
A. A vehicle was a previous law enforcement vehicle
B. Rental
C. Taxi
D. Salvage
E. Lemon Law
1. Vehicles 6yrs or newer do not a need Bi-Annual Smog
*You charge a $12.00 smog abatement fee
2. Vehicles 4yrs or newer do not need a Bi- Annual smog to transfer.
* You charge an $8.00 smog transfer fee.
NOTE:
In some transaction you will charge both fees depending when the application for “transfer” is submitted to the DMV. This exemption does not apply to Out of State or Salvage vehicles.
REGULATIONS OF THE BUREAU OF AUTOMOTIVE REPAIR (BAR)
1. If you plan to repair any vehicle after the sale of the vehicle then it is recommended that you apply for an automotive repair license.
2. An automotive repair license will allow you to work on any vehicle that is owned by someone else.
3. The Bureau of Automotive Repair has their own set of laws that you can obtain in their Write it Right booklet.
STOLEN VEHICLE PREVENTION
1. Protect yourself when purchasing a vehicle, use basic common sense, and do not get greedy.
Note: If you do purchase a stolen vehicle you will lose, because the vehicle will always go back to the original owner.
2. These are some tips to watch out for when purchasing a vehicle
(even from a wholesaler):
A. Check the vehicle id number against the title and make sure the vehicle id numbers and license plate numbers match.
B. Be aware of any vehicle that only has a bill of sale or a duplicate application for title.
C. Check the I.D. of the person you’re buying from to make sure it is the person on the title.
3. You can obtain a Vehicle Registration Inquire Number from the DMV that can tell you about any information on a vehicle (i.e. DOJ stops, plates or lien holders).
HISTORY DISCLOSURE REQUIREMENTS Div. 3.6 9990 and 11705 A14
1. Failure to disclose or intentionally “Fraud” and “Deceit”, include, but are not limited to, a misrepresentation in any manner, whether intentionally false or due to gross negligence, of a material fact; a promise or representation not made honestly and in good faith; an intention to failure to disclose a material fact.
2. Dealer must disclose in writing any known damage of the vehicle.
Examples:
A. Any damage to the frame or drive train of the vehicle
B. Any damage to the suspension of the vehicle requiring repairs other than wheel balancing or alignment
C. Fame damage
3. Any condition of the vehicle such as:
A. A vehicle was a previous law enforcement vehicle
B. Rental
C. Taxi
D. Salvage
E. Lemon Law
UNLAWFUL DEALER ACTIVITIES
1. A dealer will be billed on a monthly basis for outstanding Administrative Service Fees (ASF).
2. Bait and Switch - You cannot advertise an item for sale, and when the purchaser goes to purchase that item not have it available and switch it for something else.
3. “Bird Dog Fees” You cannot pay someone for bringing people to your place of business so you can sell cars to them.
4. The department shall furnish books and forms as determine necessary. Such books and forms shall remain the property of the DMV and may be taken up at any time for inspection. The dealer’s plate, ROS, wholesale reports are all numbered and cannot be shared with any other dealer.
5. You cannot act like a salesperson unless you are licensed or have temporary permit. If you are a salesperson, you cannot lend your license to anyone or photocopy it and pass it off as a driver’s license.
6. It is unlawful to let anyone use your dealer plates for any purpose (to move a vehicle that isn’t in dealers’ inventory, or let other family members use them).
7. If you submit a check that is not honored by your bank you will no longer be able to write checks to the DMV (serious cases only) and you will have to pay for your transaction by other means.
8. Failure to transfer title can result in the lose of your license and attach to your dealer bond.
9. If you sell a vehicle that is not at your licensed location and you do not have an off site permit you will be doing business at an unlicensed location. Which could result in a ticket or revoke of your license?
10. Print advertisement not less than 10-point bold type size and shall be textually segregated from the other potions of the printed advertisement.
Example:
1. A dealer will be billed on a monthly basis for outstanding Administrative Service Fees (ASF).
2. Bait and Switch - You cannot advertise an item for sale, and when the purchaser goes to purchase that item not have it available and switch it for something else.
3. “Bird Dog Fees” You cannot pay someone for bringing people to your place of business so you can sell cars to them.
4. The department shall furnish books and forms as determine necessary. Such books and forms shall remain the property of the DMV and may be taken up at any time for inspection. The dealer’s plate, ROS, wholesale reports are all numbered and cannot be shared with any other dealer.
5. You cannot act like a salesperson unless you are licensed or have temporary permit. If you are a salesperson, you cannot lend your license to anyone or photocopy it and pass it off as a driver’s license.
6. It is unlawful to let anyone use your dealer plates for any purpose (to move a vehicle that isn’t in dealers’ inventory, or let other family members use them).
7. If you submit a check that is not honored by your bank you will no longer be able to write checks to the DMV (serious cases only) and you will have to pay for your transaction by other means.
8. Failure to transfer title can result in the lose of your license and attach to your dealer bond.
9. If you sell a vehicle that is not at your licensed location and you do not have an off site permit you will be doing business at an unlicensed location. Which could result in a ticket or revoke of your license?
10. Print advertisement not less than 10-point bold type size and shall be textually segregated from the other potions of the printed advertisement.
Example:
11. Radio advertisements less than 11 seconds duration that do not reference specific Line makes or models of motor vehicle are exempt from the disclosure statement.
12. Fail within 48 hours in writing to withdraw any advertisement of a vehicle that has been sold or withdrawn from sale.
13. Engage in the business for which the licensee is licensed without having in force a bond as required by this article.
14. It is unlawful for any person to display or cause or permit to be displayed any sign, mark, or advertisement indicating an official connection with the Department of Motor Vehicle.
15. Engage in the business for which the dealer is licensed without at all times maintaining an established place of business as required by this code.
16. Include as an added cost to the selling price of a vehicle an amount for licensing or transfer of the vehicle, which is not due to the state, unless prior to the sale that amount has been paid buy a dealer to the state in order to avoid penalties that would have accrued because of late payment of the fees.
However, a dealer may collect from the second purchaser of a vehicle a prorated fee base upon the number of months remaining in the registration year.
17. Employ any person as a salesperson who has not been licensed and whose license is not displayed on the premises of the dealer as required.
18. Willfully fail to notify the department by mail within 10 days of the employment or termination of employment of a salesperson.
Example:
12. Fail within 48 hours in writing to withdraw any advertisement of a vehicle that has been sold or withdrawn from sale.
13. Engage in the business for which the licensee is licensed without having in force a bond as required by this article.
14. It is unlawful for any person to display or cause or permit to be displayed any sign, mark, or advertisement indicating an official connection with the Department of Motor Vehicle.
15. Engage in the business for which the dealer is licensed without at all times maintaining an established place of business as required by this code.
16. Include as an added cost to the selling price of a vehicle an amount for licensing or transfer of the vehicle, which is not due to the state, unless prior to the sale that amount has been paid buy a dealer to the state in order to avoid penalties that would have accrued because of late payment of the fees.
However, a dealer may collect from the second purchaser of a vehicle a prorated fee base upon the number of months remaining in the registration year.
17. Employ any person as a salesperson who has not been licensed and whose license is not displayed on the premises of the dealer as required.
18. Willfully fail to notify the department by mail within 10 days of the employment or termination of employment of a salesperson.
Example:
19. Sell a vehicle for operation on California highways if the vehicle does not meet all of the safety equipment requirements.
20. Use or permit the use of the special plate assigned to him or her for any purpose other than as permitted by section 11715.
21. Sale of a vehicle without making the return and payment of the full sales tax due.
22. Sell a previously unregistered vehicle without disclosing in writing to the purchaser the date on which any manufacturer or distributor’s warranty commenced.
NOTE: You must keep in mind that when you get administrative fee or an unlawful dealer active fine (and do not pay your fine) you put your bond in jeopardy, and your license at risk.
23. Administrative Service Fees (ASF) for the following violations is $5.00 each.
A. The dealer shall attach for display a copy of the report of sale on the vehicle before the vehicle is delivered to the purchaser. (Aka operating permit)
B. The dealer shall submit to the department title or other paper work accompanied by any additional fees and penalties due for transfer of registration of the vehicle within 30 days from the date of sale.
Note:
IF THE APPLICATION IS FIRST SUBMITTED TO THE DEPARTMENT WITHIN 30 DAYS FROM THE DATE OF SALE, THE DEALER IS ALLOWED AN ADDITIONAL 20 DAYS FROM THE DATE THE ITEM IS CASHIERED FOR A TOTAL OF 50 DAYS FROM THE DATE OF SALE.
The dealer shall pay penalties due for noncompliance with this paragraph; the dealer shall not charge the purchaser for the penalties.
C. Every dealer upon transferring by sale, lease or otherwise any vehicle whether new or used shall no later than the end of the fifth (5) calendar day not counting the date of the sale, give notice of the transfer to the DMV at its headquarter.
24. Administrative Service Fees for the following violations are $25.00 ea.
A. If the department returns an application, and the application was first received by the department within 30 days of the date of sale of the vehicle. The dealer shall submit a corrected application to the department within 50 days from the date of sale. * more than 50 day’s late from date of sale of the used vehicle. ASF fees will apply.
25. Any addition of changes to a contract for any goods or services after the contract has been negotiated without previously disclosing the costs the buyer and obtaining the buyer’s signature.
26. Not disclosing the cost of goods, inflating the amount of any installment payment or down payment or the extension of the maturity of a sale or lease contract for the purpose of disguising the actual charges of goods or services to be added by the dealer to the contract.
27. Failure to provide new disclosure required by AB68 that pertain to the disclosure of costs for added items, disclosure of the credit score, disclosure of the 2-day cooling off period.
28. Advertising a vehicle as “Certified” when it does not meet the requirements for a Certified Vehicle.
29. Accepting over 2 ½ % for contracts less than 60 month’s or 2% for contracts over 60 months of the finance charge when assigning the contract.
MOTOR VEHICLE FINANCING
1. The terms of the financing are going to be based on how long you want the customer to pay for the vehicle (36, 24, or 12 month).
2. The allowable interest is 21% APR on a pre-computed 552 contracts, which is equal to a 12 add on.
3. If you use a 553 contract a simple interest financing you can charge whatever % rate you like.
4. The computation of interest and the conversion to Annual Percentage Rate (APR) is usually computed by a computer but in short it is figured out like this, simple interest:
By applying a constant rate to the unpaid balance as it changes, Like amortizing. (Civil Code 2981.7n).
5. On a pre-computed contract (Civil code 2981.7o).
Example of a retail install sale contract pre-computed finance charges.
Cash Price 3495.00
Document prep charge 65.00
Smog fee 50.00
__________________________________
Total 3600.00
X 7.25% sales tax +261.00
__________________________________
Total 3861.00
License, and registration +100.00
__________________________________
Total 3961.00
Smog certificate +8.25
__________________________________
Total 3969.25
Down payment -1200.00
__________________________________
Line 7 amount financed 2769.25
Annual percentage rate
-12% or 21.96 +398.00
__________________________________
The amount you will have
paid after you made all
payments 3167.25
__________________________________
14 payments 226.23
Determination of a finance charge by multiplying the original unpaid balance by a rate and multiplying that product by the number of payment periods elapsing between the date of the contract and the date of the last scheduled payment.
6. If the contract includes a fiancé charge on the pre-computed basics it must be identified by the rule of 78’s, sum of the digits or
7. The sum of the periodic time balances method
8. Usually dealers have a computer program that does all the finance computing and accounting.
9. When assigning a conditional sale contract the dealer cannot accept a finance charge in an amount in excess of 2 ½% for contract up to 60 months and 2% for contracts over 60 months.
10. This limitation does not apply when:
A. The assignment (contract) requires the dealer to bear the entire risk of financial performance of the buyer.
B. The assignment (contract) is more that six months after the date of the conditional contract.
C. To buy here pay here.
11. Accepting or receiving an amount higher than that authorized would be a cause of action against a dealer’s license and a misdemeanor crime. In a case by case bases “good faith” errors made regarding a percentage that was over charged will not be a violation if procedures were put in place to prevent this error and if upon notice of the error, the dealer promptly remits back to the buyer any amount received in excess of the amount permitted.
12. If you are in house financing and your customer bounces a check the most you can charge for the check fee is $25.00.
13. Dealers are required to pay off the outstanding loan or lease balance on any vehicle accepted in on trade to the legal owner within 21 calendar days of the trade in. The 21-day pay off can be shorted if the dealer and the consumer agree in writing. The dealers may not sell consign or transfer a vehicle accepted in on trade before the outstanding loan or lease balance has been paid in full. The dealer is not in violation of this section if the dealer reasonably and in good faith gives notice of rescission of the contract promptly, but no later than 21 days.
14. No person or entity in the state of California shall use a GPS tracking device to determine the location or movement of a person or a vehicle unless they are the registered owner or law enforcement agency, or have given consent to the tracking and installing of such device.
Read your contacts front and back so you know what you are having the customer sign.
Credit Score Reporting
1. If a dealer arranges financing, Makes a credit sale, sells or transfers a conditional sale contract and the dealer obtains from a credit reporting agency the customers credit score the dealer must have a Credit Score Disclosure.
2. The disclosure must be a separate document from the contract.
3. The disclosure must have the following:
A. Name and address of the seller at the top of the disclosure.
B. The three digit credit score.
C. For each consumer credit score obtained for use with a consumer’s credit application, a dealer must provide the potential buyer a summary of the credit information report that corresponds to the current federal credit score reporting requirements. (click here for an example of a model form)
NOTE: Please check with your credit reporting vender to see if you can give a copy of the credit report to your customers, because they will ask and I believe this is an Illegal practice.
CONTRACTS
1. Every vehicle that the dealership sells must have a contract this contract must be in writing, typed or computer typed and must meet all the specific requirements for a contract.
A. Vehicle cash sales must also have an executed contract given to the buyer and/or the co-buyer.
B. The contract not only must include the specific monies amount it must also include the customers name and address and the dealerships name and address.
C. Also what type of vehicle is beginning sold and the VIN and license plate of the vehicle, and must be included and whether the vehicle is new or used.
2. In the contract there are specific areas that both the buyer and the seller must sign and co-buyers if any.
3. All costs involving the sell of the vehicle must also be included in the sales contract and if the dealer is financing the vehicle or a finance company, the finance cost and terms must be include.
4. You must give a copy of the signed contract to the buyer (usually the yellow copy of the contract is given to the buyer (s) with original signatures).
___No dealer shall deliver to the customer an unexecuted contract.
5. Any payment made by a buyer to a seller pending execution of a contract shall be refunded to the buyer in the event the sale contract is not executed.
6. If the dealer breaches the contract and a vehicle has been traded in for the down payment and the vehicle cannot be return, the vehicles fair market value must be given or the trade in value as stated in the contract, which ever is greater. In addition, the monies must be returned with in 5 days.
7. The seller shall not obtain the signature of the buyer to a contract when it contains blank spaces to be filled in after it has been signed.
8. The buyer cannot for any reason, except for fraud breach the contract. The law does not provide for what is called a “NO COOLING OFF PERIOD”.
9. If the buyer does breach the contract the seller would have the right to legally repossess the vehicle.
10. When assigning a conditional sale contract the dealer cannot accept a finance charge an amount in excess of 2 ½ % for contracts up to 60 months and 2% for contacts over 60 months.
11. This limitation does not apply when :
A. The assignment (contract) requires the dealer to bear the entire risk of financial performance of the buyer.
B. The assignment (contract) is more than six months after the date of the conditional contract.
C. To buyer here pay here.
12. Accepting or receiving an amount higher than that authorized would be a cause of actin against a dealer’s license and a misdemeanor crime.
13. Any payment made by a buyer to a seller pending execution of a contract shall be refunded to the buyer in the event the sale contract is not executed.
14. If the dealer breaches the contract and a vehicle has been traded in for the down payment and the vehicle cannot be returned the vehicles fair market value must be given or the trade in value as stated in the contract, which ever is greater. And the monies must be returned with in 5 days.
15. The seller shall not obtain the signature of the buyer to a contract when it contains blank spaces to be filled in after it ahs been signed.
16. The buyer cannot for nay reason, except for fraud breach the contract, there is no Cooling-Off Period unless you obtain a contract Cancellation Option, the “No Cooling Off Cancellation Option” sign must also be posted in every office of every cubical of the dealership.
NOTE: In a case by case bases “good faith” errors made regarding a percentage that was over charged will not be a violation if procedures were put in place to prevent this error and if upon notice of the error, the dealer promptly remits back to the buyer any amount received in excess of the amount permitted.
Red Flag Rule
1. The Federal Trade Commission has implemented the Fair and Accurate Credit Transactions Act (FACTA). The Red Flag Rule is a warning sign that identifies a suspicious pattern, practice, or activity that indicated the possible existence of identity theft.
2. The Red Flag Rule applies to all dealers who extends auto credit (buy here pay here) or arranges auto credit for consumers.
3. The Red Flag Rule requires the development and maintenance of a written Identity Theft Prevention Program (ITPP) to detect, prevent, and reduce the possibility of identity theft.
4. A copy of the FTC guidelines may be obtained at http://ftc.gov/bcp/edu/microsites/redflagsrule/more-about-red-flags.shtm
2-Day Cooling Off Period for Used Vehicle Purchases and Auto Brokers
1. A buyer has the right to cancel the contract on the second day after delivery of the vehicle.
1a. If the vehicle is sold for cash there must be an executed contract and this contract is also bound by the same 2 day cooling off rules.
2. This contract must be a separate document from the sales contract.
3. The sales contract must include a disclosure next to the space reserved for the buyer (s) signature notifying the buyer that a used vehicle may be returned and the transaction can be cancelled within a time frame specified in the dealer’s cancellation contract.
4. The Cooling Off Period starts when the vehicle is retailed, signs the contract and takes delivery of the vehicle.
5. The Contract Cancellation Option Agreement must include the following:
A. Vehicle Identification Number (Vin#).
B. Make and Model of the vehicle.
C. A statement specifying the time frame for cancellation. (mini um of 2 days and 250 miles).
D. A statement specifying the condition of the vehicle for return.
E. A place for the buyer’s signature to elect the option to cancel.
F. A statement specifying the last date, time, and where the buyer can cancel the contract.
G. A place for a signature that the customer was given the option of a Cooling Off Period, but declined.
H. The customer should sign a conditional report as to the condition of the vehicle before it left the lot and both customer and the dealer should sign this report. (Picture wouldn’t hurt either).
NOTE: The date and time must be the same as your normal business hours. Your must have business hours posted outside of you office. You must have business hours posted outside of your office.
Example: If you sell a car on Friday and you are not opened on Sunday the second day is going to be Monday the customer can return the vehicle. If you are opened on Monday because of a holiday then the second day would be Tuesday.
6. The dealership can, but doesn’t have to charge for a Contract Cancellation Option. The maximum you can charge for this Contract Cancellation Option is as followed:
$5000 or less ($75.00) $5001-$10,000-($150.00) - $ 10,001- $30,000 –($250,00) $30,001-$40,000-(1% of the price)
7. If the contract is cancelled the dealer can charge a restocking fee. The restocking fee is as follows:
$5000 or less-($175.00) ____ $10,000 or less ($350.00) ____ 10,001 or more ($500.00)
NOTE: If a restocking fee is charged, the Cancellation Option charge must be subtracted from the restocking fee.
Example: On a vehicle with a purchase price of less than $5000. a Cancellation Option was charged in the amount of $75.00 and the customer brought back the vehicle you can only charge $100.00 on the restocking because you already collected$75.00 from the Cancellation Option.
8. When the vehicle is returned the full refund must be given back. This includes sales tax, registration fee, documentary charge, smog inspection fee and certificate. If vehicle has been trade-in, the fair market value of the trade-in as stated in the contract or the vehicle must be returned.
9. If a trade-in was given and the customer elected to have a Cancellation Option the trade-in must not be sold for 2 days as to give time for the customer to return the purchased vehicle.
10. If the vehicle taken in on trade was accidentally sold and there and there were procedures in place to prevent this problem, but the vehicle still was sold there will be no action taken against the dealer from the DMV.
11. If a vehicle has been returned to the dealer registration fees still apply, the vehicle is not a void is to be treated like a roll back.
12. You can require the customer to make a separate payment for the Cancellation Option.
Example: the customer pays with a visa for the vehicle and cash for the Cancellation Option.
NOTE: If you take a check for the Cancellation Option and the vehicle is returned within the 2 days period and all the money was returned and the dealership did not cashier the check for the Cancellation Option and the customer makes a stop payment, you will now have to take them to court to get your money on your Cancellation Option.
Return under the Contract Cancellation Option
1. The cancellation takes place when the buyer gives written notice of cancellation to the dealer at the address specified in the contract and returns the vehicle to the dealer within the time frame allowed.
2. The return can take place under the following conditions:
A. The vehicle must be in substantially the same condition as at delivery, excluding normal wear and tear.
B. The mileage at the time of return must not exceed the mileage at delivery by no less than 250miles or if the contract states more then what ever the contract states.
C. The buyer must return to the dealer the original contract, all titling papers, registration documents and any other papers that were given at the time of sales.
D. The vehicle must be free of all liens, and encumbrances other than the ones created by the conditional sales contract, any loan arranged by the dealer, or any loan obtained by the buyer from a third party.
E. If the dealer refuses to accept the returned vehicle it must be explained in writing in and given notification to the buyer of failure to meet terms of agreements.
F. Dealer has 2 days to return all the money given by the customer back to the customer including tags, tax, license ext..
Exemptions to the 2-day Cooling Off Period
1. A dealer must offer the contract cancellation option for the sale of any used vehicle unless:
A. It’s wholesaled, or sold for junk.
B. The purchase price is $40,000 or more.
C. The vehicle is a motorcycle, off-road vehicle or recreation vehicle.
D. The vehicle is sold for commercial use. (Opposed to personal use). This doesn’t mean a pick up truck that has a body type model- commercial.
E. The buyer has returned a vehicle to the dealer under a Contract Cancellation Option within the last 30 days.
After Market Add-On Items
1. If a dealer retails or leases a vehicle and offers after market add-ons the dealer must provide the buyer, a separate written discloser.
2. The disclosure must have the following:
A. Descriptions and the cost of each individual item.
B. The total cost of all of the items.
C. The amount of the installment payment if the buyer does not purchase the items or if the buyer does purchase the items.
D. The dealers name, address, and telephone number.
E. The dealer and the buyer (s) must sign.
F. A signed copy must be given to the customers and a copy retained for the dealer.
Example: You may want to include in the sale a Service Contract, Insurance Product, Theft Deterrent Device, Gap Insurance, Exterior or Interior surface protection. If the buyer chooses all your products you will have to have to itemize the products, their cost, and all disclosure in #2 above. If the customer decides to eliminate anytime, you add a new disclosure with all disclosures in #2 above at the end the finale agreement must reflect all disclosures in #2 above and can have any cross or initials.
3. The finale disclosure must match the sales contract.
____Spanish Contract
1. If the customers’ primary language is Spanish you must write a Spanish contract up and have it executed even if the salesperson is not Spanish speaking.
2. If the customer primary language is Spanish make sure all papers regarding the 2-day Cooling off Period, the Cap on finance mark-ups, Credit Scored and Certified vehicle are translated and signed by the customer(s).
CONSIGNMENT DIV.5 11730
1. The failure of a dealer, when required under this section, to complete and comply with the terms of the prescribed consignment agreement for any vehicle which the dealer agrees to accept on consignment, or to pay the agreed amount to the consignor or his or her designee within 20 days after the date of sale of the vehicle, is cause for suspending or revoking the license of the dealer under paragraph (10) of subdivision (a) of section 11705.
2. if you do any consignment you still have to offer the 2-day Cooling Off Period Cancellation Option.
Example:
20. Use or permit the use of the special plate assigned to him or her for any purpose other than as permitted by section 11715.
21. Sale of a vehicle without making the return and payment of the full sales tax due.
22. Sell a previously unregistered vehicle without disclosing in writing to the purchaser the date on which any manufacturer or distributor’s warranty commenced.
NOTE: You must keep in mind that when you get administrative fee or an unlawful dealer active fine (and do not pay your fine) you put your bond in jeopardy, and your license at risk.
23. Administrative Service Fees (ASF) for the following violations is $5.00 each.
A. The dealer shall attach for display a copy of the report of sale on the vehicle before the vehicle is delivered to the purchaser. (Aka operating permit)
B. The dealer shall submit to the department title or other paper work accompanied by any additional fees and penalties due for transfer of registration of the vehicle within 30 days from the date of sale.
Note:
IF THE APPLICATION IS FIRST SUBMITTED TO THE DEPARTMENT WITHIN 30 DAYS FROM THE DATE OF SALE, THE DEALER IS ALLOWED AN ADDITIONAL 20 DAYS FROM THE DATE THE ITEM IS CASHIERED FOR A TOTAL OF 50 DAYS FROM THE DATE OF SALE.
The dealer shall pay penalties due for noncompliance with this paragraph; the dealer shall not charge the purchaser for the penalties.
C. Every dealer upon transferring by sale, lease or otherwise any vehicle whether new or used shall no later than the end of the fifth (5) calendar day not counting the date of the sale, give notice of the transfer to the DMV at its headquarter.
24. Administrative Service Fees for the following violations are $25.00 ea.
A. If the department returns an application, and the application was first received by the department within 30 days of the date of sale of the vehicle. The dealer shall submit a corrected application to the department within 50 days from the date of sale. * more than 50 day’s late from date of sale of the used vehicle. ASF fees will apply.
25. Any addition of changes to a contract for any goods or services after the contract has been negotiated without previously disclosing the costs the buyer and obtaining the buyer’s signature.
26. Not disclosing the cost of goods, inflating the amount of any installment payment or down payment or the extension of the maturity of a sale or lease contract for the purpose of disguising the actual charges of goods or services to be added by the dealer to the contract.
27. Failure to provide new disclosure required by AB68 that pertain to the disclosure of costs for added items, disclosure of the credit score, disclosure of the 2-day cooling off period.
28. Advertising a vehicle as “Certified” when it does not meet the requirements for a Certified Vehicle.
29. Accepting over 2 ½ % for contracts less than 60 month’s or 2% for contracts over 60 months of the finance charge when assigning the contract.
MOTOR VEHICLE FINANCING
1. The terms of the financing are going to be based on how long you want the customer to pay for the vehicle (36, 24, or 12 month).
2. The allowable interest is 21% APR on a pre-computed 552 contracts, which is equal to a 12 add on.
3. If you use a 553 contract a simple interest financing you can charge whatever % rate you like.
4. The computation of interest and the conversion to Annual Percentage Rate (APR) is usually computed by a computer but in short it is figured out like this, simple interest:
By applying a constant rate to the unpaid balance as it changes, Like amortizing. (Civil Code 2981.7n).
5. On a pre-computed contract (Civil code 2981.7o).
Example of a retail install sale contract pre-computed finance charges.
Cash Price 3495.00
Document prep charge 65.00
Smog fee 50.00
__________________________________
Total 3600.00
X 7.25% sales tax +261.00
__________________________________
Total 3861.00
License, and registration +100.00
__________________________________
Total 3961.00
Smog certificate +8.25
__________________________________
Total 3969.25
Down payment -1200.00
__________________________________
Line 7 amount financed 2769.25
Annual percentage rate
-12% or 21.96 +398.00
__________________________________
The amount you will have
paid after you made all
payments 3167.25
__________________________________
14 payments 226.23
Determination of a finance charge by multiplying the original unpaid balance by a rate and multiplying that product by the number of payment periods elapsing between the date of the contract and the date of the last scheduled payment.
6. If the contract includes a fiancé charge on the pre-computed basics it must be identified by the rule of 78’s, sum of the digits or
7. The sum of the periodic time balances method
8. Usually dealers have a computer program that does all the finance computing and accounting.
9. When assigning a conditional sale contract the dealer cannot accept a finance charge in an amount in excess of 2 ½% for contract up to 60 months and 2% for contracts over 60 months.
10. This limitation does not apply when:
A. The assignment (contract) requires the dealer to bear the entire risk of financial performance of the buyer.
B. The assignment (contract) is more that six months after the date of the conditional contract.
C. To buy here pay here.
11. Accepting or receiving an amount higher than that authorized would be a cause of action against a dealer’s license and a misdemeanor crime. In a case by case bases “good faith” errors made regarding a percentage that was over charged will not be a violation if procedures were put in place to prevent this error and if upon notice of the error, the dealer promptly remits back to the buyer any amount received in excess of the amount permitted.
12. If you are in house financing and your customer bounces a check the most you can charge for the check fee is $25.00.
13. Dealers are required to pay off the outstanding loan or lease balance on any vehicle accepted in on trade to the legal owner within 21 calendar days of the trade in. The 21-day pay off can be shorted if the dealer and the consumer agree in writing. The dealers may not sell consign or transfer a vehicle accepted in on trade before the outstanding loan or lease balance has been paid in full. The dealer is not in violation of this section if the dealer reasonably and in good faith gives notice of rescission of the contract promptly, but no later than 21 days.
14. No person or entity in the state of California shall use a GPS tracking device to determine the location or movement of a person or a vehicle unless they are the registered owner or law enforcement agency, or have given consent to the tracking and installing of such device.
Read your contacts front and back so you know what you are having the customer sign.
Credit Score Reporting
1. If a dealer arranges financing, Makes a credit sale, sells or transfers a conditional sale contract and the dealer obtains from a credit reporting agency the customers credit score the dealer must have a Credit Score Disclosure.
2. The disclosure must be a separate document from the contract.
3. The disclosure must have the following:
A. Name and address of the seller at the top of the disclosure.
B. The three digit credit score.
C. For each consumer credit score obtained for use with a consumer’s credit application, a dealer must provide the potential buyer a summary of the credit information report that corresponds to the current federal credit score reporting requirements. (click here for an example of a model form)
NOTE: Please check with your credit reporting vender to see if you can give a copy of the credit report to your customers, because they will ask and I believe this is an Illegal practice.
CONTRACTS
1. Every vehicle that the dealership sells must have a contract this contract must be in writing, typed or computer typed and must meet all the specific requirements for a contract.
A. Vehicle cash sales must also have an executed contract given to the buyer and/or the co-buyer.
B. The contract not only must include the specific monies amount it must also include the customers name and address and the dealerships name and address.
C. Also what type of vehicle is beginning sold and the VIN and license plate of the vehicle, and must be included and whether the vehicle is new or used.
2. In the contract there are specific areas that both the buyer and the seller must sign and co-buyers if any.
3. All costs involving the sell of the vehicle must also be included in the sales contract and if the dealer is financing the vehicle or a finance company, the finance cost and terms must be include.
4. You must give a copy of the signed contract to the buyer (usually the yellow copy of the contract is given to the buyer (s) with original signatures).
___No dealer shall deliver to the customer an unexecuted contract.
5. Any payment made by a buyer to a seller pending execution of a contract shall be refunded to the buyer in the event the sale contract is not executed.
6. If the dealer breaches the contract and a vehicle has been traded in for the down payment and the vehicle cannot be return, the vehicles fair market value must be given or the trade in value as stated in the contract, which ever is greater. In addition, the monies must be returned with in 5 days.
7. The seller shall not obtain the signature of the buyer to a contract when it contains blank spaces to be filled in after it has been signed.
8. The buyer cannot for any reason, except for fraud breach the contract. The law does not provide for what is called a “NO COOLING OFF PERIOD”.
9. If the buyer does breach the contract the seller would have the right to legally repossess the vehicle.
10. When assigning a conditional sale contract the dealer cannot accept a finance charge an amount in excess of 2 ½ % for contracts up to 60 months and 2% for contacts over 60 months.
11. This limitation does not apply when :
A. The assignment (contract) requires the dealer to bear the entire risk of financial performance of the buyer.
B. The assignment (contract) is more than six months after the date of the conditional contract.
C. To buyer here pay here.
12. Accepting or receiving an amount higher than that authorized would be a cause of actin against a dealer’s license and a misdemeanor crime.
13. Any payment made by a buyer to a seller pending execution of a contract shall be refunded to the buyer in the event the sale contract is not executed.
14. If the dealer breaches the contract and a vehicle has been traded in for the down payment and the vehicle cannot be returned the vehicles fair market value must be given or the trade in value as stated in the contract, which ever is greater. And the monies must be returned with in 5 days.
15. The seller shall not obtain the signature of the buyer to a contract when it contains blank spaces to be filled in after it ahs been signed.
16. The buyer cannot for nay reason, except for fraud breach the contract, there is no Cooling-Off Period unless you obtain a contract Cancellation Option, the “No Cooling Off Cancellation Option” sign must also be posted in every office of every cubical of the dealership.
NOTE: In a case by case bases “good faith” errors made regarding a percentage that was over charged will not be a violation if procedures were put in place to prevent this error and if upon notice of the error, the dealer promptly remits back to the buyer any amount received in excess of the amount permitted.
Red Flag Rule
1. The Federal Trade Commission has implemented the Fair and Accurate Credit Transactions Act (FACTA). The Red Flag Rule is a warning sign that identifies a suspicious pattern, practice, or activity that indicated the possible existence of identity theft.
2. The Red Flag Rule applies to all dealers who extends auto credit (buy here pay here) or arranges auto credit for consumers.
3. The Red Flag Rule requires the development and maintenance of a written Identity Theft Prevention Program (ITPP) to detect, prevent, and reduce the possibility of identity theft.
4. A copy of the FTC guidelines may be obtained at http://ftc.gov/bcp/edu/microsites/redflagsrule/more-about-red-flags.shtm
2-Day Cooling Off Period for Used Vehicle Purchases and Auto Brokers
1. A buyer has the right to cancel the contract on the second day after delivery of the vehicle.
1a. If the vehicle is sold for cash there must be an executed contract and this contract is also bound by the same 2 day cooling off rules.
2. This contract must be a separate document from the sales contract.
3. The sales contract must include a disclosure next to the space reserved for the buyer (s) signature notifying the buyer that a used vehicle may be returned and the transaction can be cancelled within a time frame specified in the dealer’s cancellation contract.
4. The Cooling Off Period starts when the vehicle is retailed, signs the contract and takes delivery of the vehicle.
5. The Contract Cancellation Option Agreement must include the following:
A. Vehicle Identification Number (Vin#).
B. Make and Model of the vehicle.
C. A statement specifying the time frame for cancellation. (mini um of 2 days and 250 miles).
D. A statement specifying the condition of the vehicle for return.
E. A place for the buyer’s signature to elect the option to cancel.
F. A statement specifying the last date, time, and where the buyer can cancel the contract.
G. A place for a signature that the customer was given the option of a Cooling Off Period, but declined.
H. The customer should sign a conditional report as to the condition of the vehicle before it left the lot and both customer and the dealer should sign this report. (Picture wouldn’t hurt either).
NOTE: The date and time must be the same as your normal business hours. Your must have business hours posted outside of you office. You must have business hours posted outside of your office.
Example: If you sell a car on Friday and you are not opened on Sunday the second day is going to be Monday the customer can return the vehicle. If you are opened on Monday because of a holiday then the second day would be Tuesday.
6. The dealership can, but doesn’t have to charge for a Contract Cancellation Option. The maximum you can charge for this Contract Cancellation Option is as followed:
$5000 or less ($75.00) $5001-$10,000-($150.00) - $ 10,001- $30,000 –($250,00) $30,001-$40,000-(1% of the price)
7. If the contract is cancelled the dealer can charge a restocking fee. The restocking fee is as follows:
$5000 or less-($175.00) ____ $10,000 or less ($350.00) ____ 10,001 or more ($500.00)
NOTE: If a restocking fee is charged, the Cancellation Option charge must be subtracted from the restocking fee.
Example: On a vehicle with a purchase price of less than $5000. a Cancellation Option was charged in the amount of $75.00 and the customer brought back the vehicle you can only charge $100.00 on the restocking because you already collected$75.00 from the Cancellation Option.
8. When the vehicle is returned the full refund must be given back. This includes sales tax, registration fee, documentary charge, smog inspection fee and certificate. If vehicle has been trade-in, the fair market value of the trade-in as stated in the contract or the vehicle must be returned.
9. If a trade-in was given and the customer elected to have a Cancellation Option the trade-in must not be sold for 2 days as to give time for the customer to return the purchased vehicle.
10. If the vehicle taken in on trade was accidentally sold and there and there were procedures in place to prevent this problem, but the vehicle still was sold there will be no action taken against the dealer from the DMV.
11. If a vehicle has been returned to the dealer registration fees still apply, the vehicle is not a void is to be treated like a roll back.
12. You can require the customer to make a separate payment for the Cancellation Option.
Example: the customer pays with a visa for the vehicle and cash for the Cancellation Option.
NOTE: If you take a check for the Cancellation Option and the vehicle is returned within the 2 days period and all the money was returned and the dealership did not cashier the check for the Cancellation Option and the customer makes a stop payment, you will now have to take them to court to get your money on your Cancellation Option.
Return under the Contract Cancellation Option
1. The cancellation takes place when the buyer gives written notice of cancellation to the dealer at the address specified in the contract and returns the vehicle to the dealer within the time frame allowed.
2. The return can take place under the following conditions:
A. The vehicle must be in substantially the same condition as at delivery, excluding normal wear and tear.
B. The mileage at the time of return must not exceed the mileage at delivery by no less than 250miles or if the contract states more then what ever the contract states.
C. The buyer must return to the dealer the original contract, all titling papers, registration documents and any other papers that were given at the time of sales.
D. The vehicle must be free of all liens, and encumbrances other than the ones created by the conditional sales contract, any loan arranged by the dealer, or any loan obtained by the buyer from a third party.
E. If the dealer refuses to accept the returned vehicle it must be explained in writing in and given notification to the buyer of failure to meet terms of agreements.
F. Dealer has 2 days to return all the money given by the customer back to the customer including tags, tax, license ext..
Exemptions to the 2-day Cooling Off Period
1. A dealer must offer the contract cancellation option for the sale of any used vehicle unless:
A. It’s wholesaled, or sold for junk.
B. The purchase price is $40,000 or more.
C. The vehicle is a motorcycle, off-road vehicle or recreation vehicle.
D. The vehicle is sold for commercial use. (Opposed to personal use). This doesn’t mean a pick up truck that has a body type model- commercial.
E. The buyer has returned a vehicle to the dealer under a Contract Cancellation Option within the last 30 days.
After Market Add-On Items
1. If a dealer retails or leases a vehicle and offers after market add-ons the dealer must provide the buyer, a separate written discloser.
2. The disclosure must have the following:
A. Descriptions and the cost of each individual item.
B. The total cost of all of the items.
C. The amount of the installment payment if the buyer does not purchase the items or if the buyer does purchase the items.
D. The dealers name, address, and telephone number.
E. The dealer and the buyer (s) must sign.
F. A signed copy must be given to the customers and a copy retained for the dealer.
Example: You may want to include in the sale a Service Contract, Insurance Product, Theft Deterrent Device, Gap Insurance, Exterior or Interior surface protection. If the buyer chooses all your products you will have to have to itemize the products, their cost, and all disclosure in #2 above. If the customer decides to eliminate anytime, you add a new disclosure with all disclosures in #2 above at the end the finale agreement must reflect all disclosures in #2 above and can have any cross or initials.
3. The finale disclosure must match the sales contract.
____Spanish Contract
1. If the customers’ primary language is Spanish you must write a Spanish contract up and have it executed even if the salesperson is not Spanish speaking.
2. If the customer primary language is Spanish make sure all papers regarding the 2-day Cooling off Period, the Cap on finance mark-ups, Credit Scored and Certified vehicle are translated and signed by the customer(s).
CONSIGNMENT DIV.5 11730
1. The failure of a dealer, when required under this section, to complete and comply with the terms of the prescribed consignment agreement for any vehicle which the dealer agrees to accept on consignment, or to pay the agreed amount to the consignor or his or her designee within 20 days after the date of sale of the vehicle, is cause for suspending or revoking the license of the dealer under paragraph (10) of subdivision (a) of section 11705.
2. if you do any consignment you still have to offer the 2-day Cooling Off Period Cancellation Option.
Example:
NOTE:
1. When showing the customer where to sign, DO NOT use highlighters.
2. When filling out forms be sure to print the following letters below in cursive, just so the DMV doesn’t get them confused with another ___letter or number.
Example: a 5 could look like an S but not in cursive.
?D G J R S U V Y Z
3. Remember DMV does not use “o” only zeros.
DMV ENFORCEMENT ACTIONS
Administrative Action-
A. This is an action by the DMV against an occupational license.
B. The department after notice and hearing may suspend or revoke an occupational license for several causes listed in CVC 11705.
Criminal action-
A. Criminal complaint filed against an individual through the local District Attorney’s office.
(The lists of violations are in the back of the vehicle codebook)
Civil action-
A. Civil action filed through the local District Attorney’s Office or State Attorney General’s Office.
Examples of violations include:
Business and Professions Code section 17200
Unfair Competition 17500
False and Misleading Advertising
B. Civil action may also be filed by a private party (vehicle purchaser) seeking monetary compensation. Filed through local Small Claims Court or county Superior Court.
Violations
A. Types of violation are:
F- Felony, imprisonment in state prison.
M- Misdemeanor, fine or imprisonment in county jail for one year or less.
I- Infraction, fine only.
B. Penalties may include heavy civil penalties (fines), expenses of investigation and prosecution.
Note: ALL enforcement actions can be enforced against you.
Example:
1. When showing the customer where to sign, DO NOT use highlighters.
2. When filling out forms be sure to print the following letters below in cursive, just so the DMV doesn’t get them confused with another ___letter or number.
Example: a 5 could look like an S but not in cursive.
?D G J R S U V Y Z
3. Remember DMV does not use “o” only zeros.
DMV ENFORCEMENT ACTIONS
Administrative Action-
A. This is an action by the DMV against an occupational license.
B. The department after notice and hearing may suspend or revoke an occupational license for several causes listed in CVC 11705.
Criminal action-
A. Criminal complaint filed against an individual through the local District Attorney’s office.
(The lists of violations are in the back of the vehicle codebook)
Civil action-
A. Civil action filed through the local District Attorney’s Office or State Attorney General’s Office.
Examples of violations include:
Business and Professions Code section 17200
Unfair Competition 17500
False and Misleading Advertising
B. Civil action may also be filed by a private party (vehicle purchaser) seeking monetary compensation. Filed through local Small Claims Court or county Superior Court.
Violations
A. Types of violation are:
F- Felony, imprisonment in state prison.
M- Misdemeanor, fine or imprisonment in county jail for one year or less.
I- Infraction, fine only.
B. Penalties may include heavy civil penalties (fines), expenses of investigation and prosecution.
Note: ALL enforcement actions can be enforced against you.
Example:
WHOLESALE
Use the Wholesale Report of Sale for reporting sales of used vehicles from:
A. Dealer to dealer this includes wholesale transactions to out-of- state
B. Scrap metal processors
C. Dismantlers.
D. All parts of the Wholesale Report of Sale have the same accountable number.
DISPOSITION OF WHOLESALE REPORT OF SALE
A. Send DMV copy (white upper portion) to Sacramento within five calendar days after date of sale to another.
B. Give the buyer the yellow copy.
C. Retain the blue copy in your book.
Retain this copy for a minimum of four years.
NOTE:
Fill out the Wholesale Report of Sales accurately; any incomplete or illegible notices cannot be used to update the database.
Note:
1. Wholesale “only” dealers that deal with less than 50 vehicles, subject to registration during a one-year period are exempt from taking the continuing education courses. VC 11704.5
2. Wholesale only dealers who sell less than 24 vehicles in a year only need a $10,000 bond.
WHOLESALE ROLLBACKS
A rollback is a sale to a buyer then a subsequent return of that vehicle to the selling dealership. Transaction resulting in a “rollback” and are not voided sales.
A. When the vehicle is returned to the selling dealer, the buyer must complete a Wholesale Report of Sale back to the selling dealer.
B. The Wholesale Report of Sales DMV copy must also be submitted to the department within the prescribed 5-day Period.
REPOSSESSIONS
1. Whenever possession is taken of any vehicle by or on behalf of any legal owner under the terms of a security agreement or lease agreement the person taking possession shall notify within one hour after taking possession of the vehicle. Notify the correct department i.e. Police, Sheriff or if on a campus the Campus Police.
2. A written notice also shall be giving to the correct authorities within one business day.
Example:
Use the Wholesale Report of Sale for reporting sales of used vehicles from:
A. Dealer to dealer this includes wholesale transactions to out-of- state
B. Scrap metal processors
C. Dismantlers.
D. All parts of the Wholesale Report of Sale have the same accountable number.
DISPOSITION OF WHOLESALE REPORT OF SALE
A. Send DMV copy (white upper portion) to Sacramento within five calendar days after date of sale to another.
B. Give the buyer the yellow copy.
C. Retain the blue copy in your book.
Retain this copy for a minimum of four years.
NOTE:
Fill out the Wholesale Report of Sales accurately; any incomplete or illegible notices cannot be used to update the database.
Note:
1. Wholesale “only” dealers that deal with less than 50 vehicles, subject to registration during a one-year period are exempt from taking the continuing education courses. VC 11704.5
2. Wholesale only dealers who sell less than 24 vehicles in a year only need a $10,000 bond.
WHOLESALE ROLLBACKS
A rollback is a sale to a buyer then a subsequent return of that vehicle to the selling dealership. Transaction resulting in a “rollback” and are not voided sales.
A. When the vehicle is returned to the selling dealer, the buyer must complete a Wholesale Report of Sale back to the selling dealer.
B. The Wholesale Report of Sales DMV copy must also be submitted to the department within the prescribed 5-day Period.
REPOSSESSIONS
1. Whenever possession is taken of any vehicle by or on behalf of any legal owner under the terms of a security agreement or lease agreement the person taking possession shall notify within one hour after taking possession of the vehicle. Notify the correct department i.e. Police, Sheriff or if on a campus the Campus Police.
2. A written notice also shall be giving to the correct authorities within one business day.
Example:
3. Any person failing to notify the correct department is guilty of an infraction and a minimum of $300 and up to a $500 dollar fine.
4. When a vehicle is repossessed and the renewal fees are due the department shall waive any renewal penalties that are due for latepayment if the fees are paid within 60 days of taking possession.
5. After the vehicle is repossessed you need to fill out a:
NOTICE OF INTENTION TO DISPOSE OF MOTOR VEHICLE form. This form gives the customer 15days to retrieve their vehicle.
Example:
4. When a vehicle is repossessed and the renewal fees are due the department shall waive any renewal penalties that are due for latepayment if the fees are paid within 60 days of taking possession.
5. After the vehicle is repossessed you need to fill out a:
NOTICE OF INTENTION TO DISPOSE OF MOTOR VEHICLE form. This form gives the customer 15days to retrieve their vehicle.
Example:
6. The buyer can request a written accounting regarding the disposition. The accounting shall itemize:
A. The gross proceeds of the deposition
B. The reasonable and necessary expenses incurred for retaking, holding, preparing for and conducting the sale.
C. The satisfaction of indebtedness secured by any subordinate lien or encumbrances on the motor vehicle.
D. In all sales that result in a surplus, the seller or holder shall furnish an accounting whether or not requested by the buyer. Any surplus shall be returned to the buyer within 45 days after the sale is conducted.
7. You cannot accelerate the maturity of any part of the conditional sale of contract.
8. If after default by the buyer, the seller repossesses or voluntarily accepts surrender of the motor vehicle, any person liable on the contract shall have a right to reinstate the contract. UNLESS the seller reasonably and in a good faith determines that any of the following has occurred:
A. Any person liable on the contract intentional provided false or misleading information on their application.
B. To avoid repossession has concealed the motor vehicle or removed it from the state.
C. Threatens to commit acts of destruction or has failed to take care of the vehicle in a reasonable manner that the value has been substantially impaired.
D. Attempts to commit or threatened to commit criminal acts of violence or bodily harm against the person attempting to repossess the vehicle.
E. Has knowingly let the vehicle become involved in a criminal act.
F. If the vehicle is seized by a federal, state, or local law agency.
G. Exercise of the right to reinstate the contract shall be limited to once in any 12-month period and twice during the term of the contract.
9. To reregister a repossessed vehicle you need to fill out a reg. 119 CERTIFICATE OF REPOSSESSION and possibly a reg. 262 for the odometer.
10. Enter “Repossession” in lieu of the registered owner’s release on line 1 of the Certificate of Title.
11. If you return the vehicle back to the registered owner you or the register owner needs to pay $15.00 to the chief of police or a parking authority operated by the city or county before the vehicles returned. If the R/O pas the dealership the dealership can charge an additional $5.00 administration fee and must keep a copy for the dealerships record and give a copy to the R/O. failure to pay the $25.00 within 3 days is subject to a $50.00 fine.
12. A tow truck shall have on both side of the trick the name of the company or the owner or operator of the tow truck business address and telephone number of the owner or driver. This must be on a sign not least an 2 inches in height and shall be in contrast to the color of the background, in lieu of a name, business address and telephone number you may use the license number issued to the agency by the Department of Consumer Affairs.
NOTE: A tow vehicle registered in the dismantler business names is used for the carrying of the dismantled vehicle “only” and is not for repossessing.
Brokering
1. “Brokering” is an arrangement under which a dealer, for a fee, provides a service of arranging, negotiating or assisting the purchase of a new or used motor vehicle, not owned by the dealer, for another or others.
2. A dealer who obtains an auto broker’s endorsement to his or her dealer’s license is subject to all of the licensing, advertising, and other statutory and regulatory requirements.
Brokering Requirements:
A. DMV endorsement
B. Fee (original endorsement) $50.00 non-refundable
C. Auto broker log (DMV will furnish)
__The brokering dealer owes an Utmost Duty of Care, Integrity, Honesty and Loyalty in dealings with its principal or principals.
2-Day Cooling Off Period for Auto Brokers
1. The Auto Brokers have the same responsibility as a retail dealer.
2. The Auto Broker is the one that has to give the full refund back to the customer.
3. The Auto Broker is the one that would have to due the inspection report.
4. The Broker is responsible to post the fees (if any).
Unlawful Brokering Acts:
1. Failure to execute a written brokering agreement.
2. All consumers shall be provided a completed copy of the agreement before the signing the agreement or before accepting the first $100.00.
3. Can not accept a purchase deposit that exceeds 2.5 % of the selling price.
4. Failure to refund any money including deposits upon demand by a consumer before the consumer’s signing of a purchase agreement and taking deliver of the vehicle.
5. Act as a seller and provide brokering services, both in the same transaction.
6. Failure to disclose to the consumer or selling dealer that there is a fee for auto brokering. This arrangement shall be confirmed in a brokering agreement.
7. Failure to record in the dealer’s auto broker log, all information about the brokered vehicle.
8. Failure to maintain for 3 years a copy of the executed brokering agreement and other notices and documents related to each brokered transaction.
9. Failure to advise the consumer, before accepting any money that a full refund will be given if the motor vehicle ordered through the auto broker is not obtained for the consumer or if the service orally contracted for is not provided.
10. Failure to cancel a brokering agreement and refund, upon demand, any money paid by a consumer including any brokerage fee, under any of the following circumstances:
A. When the final price of the brokered vehicle exceeds the purchase price listed in the brokering agreement.
B. When the vehicle delivered is not as described in the brokering agreement.
C. When the expired agreement that contains a purchase price at or below the price listed in the brokering agreement.
Information for the Auto broker’s Log
1. Vehicle Id number
2. Date of brokering agreement
3. Selling dealer’s name, address, and dealer number
4. Name of consumer
5. Brokering dealer’s name and dealer number
Brokering Agreement: Form and Contents
1. The agreement shall be printed in no smaller than 10-point type and shall contain not less than the following terms, conditions, requirements and disclosures.
A. Name, Address, License number, and Telephone number of the auto broker.
B. A complete description, including Make, Model, Year model and Color, of the vehicle and the desired options.
C. The following statement:
“The following information shall be completed prior to the signing of this brokering agreement:”
Dollar Purchase Price of Vehicle:
Date this agreement will expire if a purchase agreement from a selling dealer is not present for your signature: ____________ Fee that you will be obligated to pay us, if any: ____________
D. One of the following notices, as appropriate, printed in at least 10-point type and placed immediately below the statement: 1. “We do not receive a fee from the selling dealer” or 2. “We receive a fee from the selling dealer”
E. The date the agreement is executed.
F. The signature of the auto broker and consumer.
G. The following notice on the face of the brokering agreement with a heading in at least 14-point type and the text in at least 10-point type:
NOTICE
This is an agreement to provide services; it is not an agreement for the purchase of a vehicle. California law gives you the following rights and protection:
2. Once you have signed this agreement, you have the right to cancel it and receive a full refund of any money paid, including any brokerage fee you may have paid, under any of the following circumstances:
A. The final price of the vehicle exceeds the purchase price listed above.
B. The vehicle is not as described above upon delivery.
C. This agreement expires before you being presented with a selling dealer’s purchase agreement.
If you have paid a purchase deposit, you have the right to receive a refund of that deposit at anytime before your signing a vehicle purchase agreement with a selling dealer. Purchase deposits are limited by law to no more than 5 % of the purchase price of a vehicle and must deposited by an auto broker or auto buying service in a federally insured trust account. If you are unable to resolve a dispute with you auto broker or auto buying service, please contact the Department of Motor Vehicles, Division of Investigations and Occupational Licensing, via your local office of the Department of Motor Vehicles.
Brokering: Purchase Deposits: Trust Account:
1. A dealer who brokers a motor vehicle sale shall deposit directly into a trust account any purchase money, including purchase deposits.
2. The brokering dealer shall serve as trustee of the trust account required.
3. All trust accounts must be maintained at a bank or saving in loan regulated by the state or the government.
4. The brokering dealer shall not in any manner use the money in the trust account except as followed:
A. In partial or full payment to a selling dealer for a vehicle purchased by the brokering dealer’s consumer.
B. To make refunds.
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