- Course Title
- Independent Auto Dealers License Renewal
This class will allow renewal for licenses from the state of North Carolina for Independent Used Car Dealers.
Upon successful completion of this course, the participants will be able to:
Sell use motor vehicles in the state of North Carolina.
I-Motor vehicle dealer defined -20-286(11)
A. A person who does any of the following:
1.For commission, money or other thing of value, buys or sells five or more motor vehicles within any 12 consecutive months regardless of who owns the vehicles.
2. On behalf of another and for commission, money, or other thing of value, arranges, offers, attempts to solicit, or attempts to negotiate the sale of five or more motor vehicles within any 12 consecutive months, regardless of who owns the vehicle.
3. Engages wholly or in part in the business of selling motor vehicles, whether or not the vehicles are owned by that person,and sells five or more within any 12 consecutive months.
4. Offers to sell, displays, or permits the display for sale, for compensation,
of five or more vehicles within any consecutive 12 months.
5. Primarily engages in the leasing or renting of motor vehicles and sells or
offers to sell those vehicles at retail. Note: Above definition is slightly abbreviated for outline purposes
B. Used motor vehicle dealer defined -20-286(16)
A motor vehicle dealer who buys, sells or exchanges, or offers or attempts to
negotiate a sale or exchange of an interest in, or who is engaged, wholly or in part in the business of selling, used motor vehicles only.
C. GS-20-286(11)b list exemptions from licensing requirement. It should be noted that a recent law raised the weight requirements for trailers to not more than 2500lbs.
II- License renewal requirements-20-288 (ENF 403, pg. 78 in Regulations)
A. Effective January 1, 2005, 20-288 has been re-written (Discuss)
1. Dealers should note that the renewal form (ENF 403) requires a “copy” of the 6 hr. certificate be sent with the renewal application and not the original.
III- Dealer Records- 20-297(a)
A. “A dealer must keep a record of all vehicles received by the dealer and all
vehicles sold by the dealer. The records must contain the information that the
1. DMV regulations (pgs.61,62) lists those records required to be kept and also states that required records must be kept for 4 years
2. GS-20-347.1- Odometer retention records must be kept for 5 years
IV-Sales Representative Regulations
A. 20-290(b)-“Each dealer shall keep a current list of his licensed salesmen,
showing names, addresses, and serial numbers of their licenses, posted in
a conspicuous place in each place of business.”
B. 20-291- Each sales representative “Shall carry his license when engaged in
business and display it upon request.” The license shall include the name of
representative’s employer and rep is to immediately apply for new license if employer changes.
C. 20-306- Unlawful for salesman to sell except for his employer. A salesman
may be employed by more than one dealer provided that multiple employment
is clearly indicated on his license.
D. 20-299 Acts of officers, directors, partners, salesmen and other representatives
1. 20-299(a) states that “Each licensee shall be responsible for the act of any or all of his salesmen while acting as his agent”.
E. Penalty: In addition to misdemeanor charges a $50 civil penalty may be
assessed for failing to display or carry license.
V- 20-294- Grounds for denying, suspending or revoking licenses.
A. Thirteen reasons for denial, suspension or revocation are listed on pages
7 and 9 of manual. (discuss}
B. The difference between suspension and revocation is described on page 66 of
Regulations. A revocation will require a new license before any activity covered by Article 12. A suspension will not.
VI- Damage disclosure 20-71.4 (read and discuss)
A. Law has recently changed. The new law has replaced “reasonably should
know” with “has knowledge”.
B. The cost of replacing the airbag can now be deducted from cost of repair
C. The removal of the newly required TOTAL LOSS CLAIM VEHICLE marker
required by 20-71.3 is made a Class I felony by 20-71.4(c)
VII- Salvage and other vehicles—titles and registration cards to be branded- 20-71.3 (read and discuss)
A. Any motor vehicle that is declared a total loss by an insurance company shall have a permanent marker attached to the door jamb and the title and registration card will be branded “Total loss claim vehicle”. The permanent marker is put on by the Division at time of final salvage inspection. (discuss)
B. Salvage vehicles up to and including 6 model years old must count the cost of replacing the air bag when calculating repair cost for salvage title.
C. Salvage vehicles more than six model years old must list the cost of replacing the air bag but may deduct it when figuring repair cost for salvage title.
D. GS 20-109.1 (p.67 in Regulations) regulates the procedure an insurance
company must follow when a vehicle is damaged to the extent that it becomes a salvage vehicle. Individuals who elect to keep their vehicles may do so, but their new title will be branded as salvage. (discuss)
VII-FTC Buyers Guide (Handout containing actual Federal codes pertaining to Buyer’s Guide and implied warranties will be distributed and discussed)
VII-Privacy notification and FTC Safe Guards Rule
A. Gramm-Leach-Bliley Act (discuss)
B. Discuss actual case where auto dealer was sued for disclosing non public info
C. Driver’s license and Social Security number are non-public information and
not to be made public or placed in a non secure location
VII- Motor Vehicle Display – 20-292 (p.7 in Regulations)
A. Motor vehicles must be displayed at dealer’s established salesroom
a. Demonstrator with dealer’s name or other sales information
b. Vehicle is displayed at a trade show or exhibit where no sales activities relating to the vehicle takes place
c. Vehicle is displayed at home or place of business of customer at customer’s request
2. Does not apply to recreational vehicles, house trailers, camping or other utility trailers
VIII- Consignment of vehicles ( not regulated by statute, only regulations, p.58) Discuss
A. Agreement must be in writing with complete description of vehicle
B. Must have tags and insurance
C. Customer must be informed of consignment unless dealer assigns to dealership before transferring
D. A retail dealer cannot consign to another retail dealer
E. Must have valid inspection sticker
F. Penalty: Type II violation
VIX- Motor Vehicle Inspections 20-183.4c (p.49 in Regulations)
A. A new vehicle must be inspected before it is sold at retail
B. A used vehicle must be inspected prior to being offered for sale
C. A used vehicle sold at public auction must have 9 months remaining on sticker. If auction is in an emissions county, must have emissions sticker.
D. New law, effective this year, exempts historic vehicles, as defined in 20-79.4(b), from safety inspections. Historic vehicles are vehicles over 35 years old.
E. Dealers should make sure check engine light is not on prior to submitting
a vehicle for inspection. This will show up immediately on Carfax as emissions failure.
X- Requirements for Bill of Sale (p.59 in Regulations)
A. Dealer must provide the information listed on p.59 of Regulations in writing to buyer. Information may be on a bill of sale, buyer’s order, financial statement or combination thereof. Each form must be completed in duplicate and signed by the buyer and seller. Buyer to get the original or a copy and the seller must retain a copy for 4 years. (discuss)
XI- Installment agreements and limits on finance charges (20-303)
A. Every retail installment agreement shall be evidenced by an instrument in
writing, which contains all the agreements of the parties and shall be signed by the buyer.
B. Dealers who sell on installment must comply with 25A-15(c) which states that if the contract is repayable in not less than six installments the interest rate will be as follows on self propelled motor vehicles:
1. 18% per annum for vehicles one and two model years old
2. 20% per annum for vehicles three model years old
3. 22% per annum for vehicles four model years old
4. 29% per annum for vehicles five model years and older
C. Truth in lending: Federal law and similar state laws require a full and complete disclosure of all charges, fees and interest rates on installment contracts
XII- Dealer Plates: The issuance and use of dealer plates is regulated by 20-79 and that statute as been re-written . The plates will now be issued on a staggered basis. DMV will notify dealers as to implementation of new law. (discuss)
A. Restrictions on use of dealer plates are also regulated by 20-79 and the
restrictions are listed on page 61 of Regulations. There is no change in the law as to use. (discuss)
XIII-Transporter plates: Transporter plates are regulated by 20-79.2 and this statute is in the Regulations on p. 69. (discuss)
XIV- Temporary plates: Temporary plates or markers are regulated by 20-79.1 and this statute is in the Regulations on pages 40, 41 and 42. (discuss)
XV- Disclosure signs:
A. GS20-101.1 regulates the disclosure requirements when a dealer charges
administrative fees. This statute is included in the Regulations on pages 42 and 43. (discuss)
B. GS20-101.2 regulates the disclosure requirements when a dealer receives
compensation for arranging financing. This statute is included in the Regulations on page 43. (discuss)
XVI- Liens, abandonment and sale of repossessed vehicles
A. 20-77(c)-“ In any case where a vehicle is sold under a mechanic’s or storage
lien or abandoned property, the Division shall be given a 20 day notice as provided in 20-114.
B. 20-77(d) “An operator of a place of business for garaging, repairing, parking or storing vehicles for the public in which a vehicle remains unclaimed for 10 days, or the landowners upon whose property a motor vehicle has been abandoned for more than 30 days, shall, within five days after the expiration of that period, report the vehicle as unclaimed to the Division. Failure to make such report shall constitute a Class 3 misdemeanor. Persons who are required to make this report and who fail to do so within the time period specified may collect other charges due but may not collect storage charges for the period of time between when they were required to make this report and when they actually did send the report to the Division by certified mail.”
XVII- Patriot Act
A. Blocked person list identifying “Specially Designated Nationals” is available
on Treasury Department website (www.treas.gov). Can also be found in the Federal Register at a public library.
B. Dealers are required by Federal law to “Verify your customer’s identity and
check their names against the blocked person’s list.
XVIII- Soldiers and Sailors Relief Act
A. Federal law requires that on retail or revolving payment accounts, a
person who is call to active military duty may demand that the interest rate be
lowered to 6% under the following conditions:
1. The person called to active duty demands the reduction
2. Military pay, including benefits, is less than buyer’s civilian salary
3. Reduction only applies during the active duty period
XIX- Cash transactions over $10,000
A. Federal law requires dealers to report cash transactions over $10,000
B. Use Treasury form 8300 or FinCen form 8300 (banks have these forms)
C. Dealer should be suspicious if multiple sales add up to $10,000
D. Felony for failing to comply
Method of Instruction
Demonstration of Skills: No
Class Participation: No