- Course Title
- North Carolina Independent Dealer Initial
Students will be given the NC Dealers and Manufacturers Regulations, a copy of the Federal Trade Commission Codes pertaining to Buyers Guides and a hand out that include the Gramm-Leach-Bliley statutes. The class outline will coincide with the Dealers Regulations Manual, Title Manual and FTC Codes. Instructor will explain and discuss the pertinent material found in these documents, and students will be encouraged to make notations when necessary.
To familiarize students with the rules and regulations pertaining to the sale and transfer of used motor vehicles in North Carolina.
I. Regulation of motor vehicle distribution in public interest. (20-285)
A. G.S. 20-286. Definitions. Pages 2 thru 4 in Dealer Manual
II. Related Statutes and regulations (page numbers refer to Dealer Regulations Manual)
A. G.S. 20-287- Licenses required; penalties p.6
B. G.S. 20-288-Application for license: license requirements: expiration p.7
C. G.S.20-289- License fees p.9
D. G.S. 20-290- Licenses to specify places of business; display of license and list of sales representatives; advertising p.9
E. G.S. 20-291-Representatives to carry licenses and display it on request; license to name employer p.10
F. G.S. 20-292- Dealers may display motor vehicles only at established salesroom. p.10
G. G.S. 20-294- Grounds for denying, suspending or revoking licenses. The Division may deny, suspend or revoke a license issued under this Article p.10
H. G.S. 20-295- Action on application p.11
I. G.S. 20-296- Notice and hearing upon denial, suspension, revocation or refusal to renew license p.12
J. G.S. 20-297- Retention and inspection of certain records p.12 and p.103
K. G.S. 20-298- Insurance p.12
L. G.S. 20-299-Acts of officers, directors, partners, salesmen and other reps p.13
M. G.S. 20-20-301- Powers of Commissioner p.13
N. G.S. 20-302- Rules and regulations p.17
O. G.S. 20-303- Installment sales to be evidenced by written instrument; statement to be delivered to buyer p.17
P. G.S. 20-79. Dealer License Plates p. 64…67
Q. G.S. 20-79.1-Use of temporary registration plates or markers by purchasers of motor vehicles in lieu of dealer plates p.68,99
R. G.S. 20-79.2 - Transporter plates p.71
S. G.S. 20-101.1- Conspicuous disclosure of dealer administrative fees p.73
T. G.S. 20-101.2- Conspicuous disclosure of dealer finance yield charges p.74
U. G.S. 20-106- Receiving or transferring stolen vehicles p.75
V. G.S. 20-108- Vehicles or component parts of vehicles without manufacturer’s numbers p.78
W. G.S. 20-109- Altering or changing engine or other numbers p.81
III. Vehicle Mileage Act (p.86)
A. G.S. 20-343- Unlawful change of mileage p.87
B. G.S. 20-344- Operation of vehicle with intent to defraud p.87
C. G.S. 20-346-Lawful service, repair, or replacement of odometer p.88
D. G.S. 20-347-Disclosure requirements p.88
E. G.S. 20-347.1- Odometer disclosure record retention p.90
F. G.S. 20-348- Private civil action p.91
G. G.S. 20-349- Injunctive enforcement p.91
H. G.S. 20-350- Criminal offense p.91
IV. Manner of Operation (p.96)
A. Vehicles offered for sale owned by dealership shall have title available p.96
B. Vehicles offered for sale on consignment p.97
C. Vehicles offered for sale on a floor plan lien p.98
D. Bill of sale-written documentation p.98
E. Buyers Guides (p.104 and 111) and handout containing FTC rules
F. Business records p.103
V. Inspection and investigation by the Division (p.12 and 104)
A. Division may make periodic inspections of premises and records
B. All bona fide complaint in writing will be investigated to determine if there is a violation of regulations
C. Hearings to be held prior to suspending, revoking or failing to renew license
VI. Civil penalties for violations by licensee (p.106 …111)
A. Types of violations subject to civil penalties
1. Type I Violation- First offense within 3 years is $250, second offense is $500 and third and subsequent offenses are $1000
2. Type II Violation- First offense within 3 years is $100, second offense is $250 and third and subsequent offenses are $500
3. Type III Violation- Any offense will be $50
4. Multiple offenses in course of same transaction, the most significant violation only will be charged and assessed
B. Payment of Civil Penalties- Due within 30 days
C. Acts that constitute Type I violations p.108
D. Acts that constitute Type II violations p.110
E. Acts that constitute Type III violations p.110…111
F. Civil Penalty for selling vehicles without a license is $5000 p.111
VII. Inspection requirements.
A. When a vehicle must be inspected; one way trip permits (p.84,85)
B. Emissions block explained
VIII. Registration (Section 1, Chapter 1, page 1 in Title Manual)
A. G.S. 20-50- Subject to registration
B. G.S. 20-51- Exempt from title or registration
1.Mopeds ,“tow dollies”
C. G.S. 20-64 and G.S.20-72- Plate transfers
1-G.S. 20-64 allows plates to be transferred to vehicles of like category
a. Twenty day transfer rule included in 20-72
b. If not of a like category original plate to be surrendered and unexpired portion of fee will be credited toward new plate. If fee for original plate is less than the new one, cash refund will not be given.
c. Owner who surrenders a plate costing $60 or more may receive a refund on a monthly-prorated basis up to one half the annual license fee. Proof of insurance up to surrender date is required.
d. If original vehicle has not been disposed of, plate transfer to another vehicle must be recorded and new registration card issued PRIOR TO OPERATION!
e. Application for transfer must be made within 20 days after plates were last used on original vehicle. If tags are not transferred from trade-in vehicle, dealer should not transfer a tag until he verifies date the original vehicle was sold to determine when 20 days expire. Under new inspection rules it may be cheaper not to transfer tag.
f. NOTE: Dealer must read and understand G.S.20-64, G.S.20-72 and Section 2, Chapter 1, pages 11, 12 and 13 of Title Manual to fully understand the plate transfer procedure.
IX. Salvage Titles and Damage Disclosure
1. Flood Vehicle-A motor vehicle that has been submerged or partially submerged in water to the extent that damage to the body, engine, transmission, or differential has occurred.
2. Reconstructed Vehicle-A motor vehicle of a type required to be registered that has been materially altered from original construction due to removal, addition or substitution of new or used essential parts; and includes glider kits and custom assembled vehicles.
3. Salvage Motor Vehicle-Any motor vehicle damaged by collision or other occurrence to the extent that the cost of repairs and rendering the vehicle safe for use on the public streets and highways would exceed 75% of it’s fair retail market value, whether or not the vehicle has been declared a total loss by an insurer. Repairs shall include the cost of repairs and labor. Fair market retail values shall be as found in the NADA Pricing Guide Book or other publications approved by the Commissioner.
4. Salvage Rebuilt Vehicle- A salvage vehicle that has been rebuilt for title and registration.
5. Non USA Vehicle-A motor vehicle manufactured outside the US and not intended for sale in the US.
B. G.S. 20-71.3- Salvage and other vehicles- titles and registration cards to be branded.
C. G.S. 20-71.4- Failure to disclose damage to a vehicle shall be a misdemeanor. P.61
X. Statutes pertaining to liens and titles
A. G.S. 20-57- Division to issue certificate of title and registration card.
B. G.S. 20-58- Perfection by indication of security interest on title.
C. G.S. 20-58.1- Duty of Division upon receipt of application for notation of security interest.
D. G.S. 20-58.2- Date of perfection. Must get to DMV within 20 days.
E. G.S. 20-58.4- Release of security interest
F. G.S. 20-59- Unlawful for lienor not to surrender title when lien is satisfied
G. G.S. 20-60- Owner after transfer not liable for negligent operation
H. G.S. 20-72- Transfer by owner
I. G.S. 20-73-New owner must get new certificate of title within 28 days
J. G.S. 20-74- Penalty for making false statement about transfer of vehicle
K. G.S. 20-75- When transferee is dealer or insurance company
L. G.S. 20-75.1- Conditional delivery of motor vehicles
M. G.S. 20-76- Title lost or unlawfully detained: bond as condition to issuance of new certificate
N. G.S. 20-77- Transfer by operation of law; sale under mechanic’s lien; unclaimed vehicles
XI. Procedures for transferring title (Section 1, chapter 3, p.4 in Title Manual)
A. Items that constitute a proper sale of vehicle
1. Proper assignment of the title document
2. Delivery of the vehicle
B. Items that constitute a proper assignment of a title document
1. Purchaser’s name and address
2. Date of sale or date of delivery
3. Seller’s signature
4. Odometer reading
C. Transferring ownership on title (Explained in full in Section 1, chapter 3, pages 4 thru 7 of Title Manual)
1. Vehicle information on the title must agree with supporting documents.
2. Registered owner on title must sign as seller in presence of notary on reverse of title. Proper papers must be furnished if someone other than owner signs.
3. Lien release is required if a lien is shown on the face of the title.
4. All liens existing against the purchaser for the vehicle must be entered in the lien section. ( A lien not recorded on title is invalid)
5. Assignment must trace from registered owner through dealers to the retail purchaser. Each assignment should include the seller and purchaser’s hand printed name and date of purchase. Sellers signature must be notarized for NC assignments. Odometer reading must be included if vehicle is ten years old or newer.
6. Joint ownership requires both sellers to sign releasing ownership. Only one needs to complete odometer certification.
7. The person must personally sign and hand print when transferring ownership. NC recognizes hand print as hand printed, not typed or computer generated.
D. The Title Manual includes instructions on the use of all forms required in the proper transferring of vehicles. Only NC residents, out of state students, military personnel and immediate family, and vehicles garaged at least 6 month of year may obtain NC titles. Form 615A must be completed.
1. MVR 191- Certificate of Title (Section 1, chapter 3, pages 4 thru 7)
2. MVR-1- Application for Title (Section 1, Chapter 2, pages 2 thru 6)
3. MVR-2- Dealer’s Reassignment Form (Section 1, Chapter 5, p.1)
4. MVR-3- Certificate of Repossession (Section.1, Chapter 6, page 4)
5. MVR-4- Duplicate Title (Section.1, Chapter.6, page 1)
6. MVR-5- Title correction and substitute title (Section 1, Chapter 6, p.1)
7. MVR-6- Lien Recordings Section 1, Chapter 6, page 2)
8. MVR-6T- Temporary lien filing to be used by licensed dealer when title is not available (Section 1, Chapter 6, page 4)
9. MVR-7- Recording assignment of lien and application for transfer of lien (Section 1, Chapter 6, page 5)
10.MVR-8- Removal of lien (Section 1, Chapter 6, page 6)
11. MVR-92A- Requirements for obtaining title by filing an indemnity bond (Section 5, Chapter 1, page 65)
12. MVR-106- Requirements for obtaining NC Registration
E. Documents needed for transfer at the license plate office
XII. Installment Sales contracts
A. G.S. 25-9-609- Secured party has the right to take possession after default. Without judicial process, but cannot breach the peace during repossession. Advice from an attorney is recommended to prevent costly lawsuits. Breach of the peace” is defined as conduct “plainly likely to provoke violent retaliation”
B. 25A-15 (b) Finance charge not to exceed:
1. 24% if amount if amount less than $1500
2. 22% if amount exceeds $1500 but is less than $2000
3. 20% if amount exceeds $2000 but is less than $3000
4. 18% if amount is $3000 or greater
C. 25A-15 (c) Financing on vehicles not to exceed (b) above and restrictions on year model if financed more than 6 months are as follows:
1. 18% on one and two model years
2. 20% on three model years old
3. 22% on four model years old
4. 29% on five model years old
XIII. Highway Use Tax
A. Tax is imposed for privilege of using highways of NC and is in addition to all other taxes. The tax rate is 3%. The sales price minus the trade in value is used when sold by a dealer and the market value is used for casual sales. Tax must be paid when applying for title. Bill of sale is required when sold by a retailer. Dealer may collect and remit tax for purchaser.
XIV. Gramm-Leach-Bliley Act
A. Sec.6801. Protection of nonpublic information
B. Sec. 6802. Obligations with respect to disclosures of personal information
XV. 20-354.3- NC Motor Vehicle Repair Act
A. Written motor vehicle repair estimate and disclosure statement required. Shop and environmental fees included in estimate.
XVI. USA Patriot Act
Method of Instruction