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Archive October 2019

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Zombie Car Left at Dealership

When operating an independent auto dealership, cars come, cars go.....but what about those cars that stay? What about that customer prospect that pulls up to your lot in a vehicle, then takes a test drive and never comes back? Or that girlfriend or boyfriend that borrows a car from a friend for some reason parks it at your dealership to look at a car, only to leave in an suspicious old van? This is not a rare Friday the 13th type occurrence, but happens more than you think.

Not All ID's Are Created Equal

We frequently see advertisements stating that "no driver's license necessary" to buy a car.  While a Texas or state issued ID card might technically be acceptable to purchase a vehicle for title purposes, can that same person even legally drive the car off the lot?  What if that person gets in an accident two blocks down the road and injures a third party? 

Can an Independent Dealer Deliver a Vehicle Outside the Dealership?

Dealers often see certain "vending machine" dealers delivering vehicles around town with their custom trucks.  Are the vehicles delivered after purchase, part of a single transaction at your dealership, or conditioned on later purchase after delivery? Well, like most things in Texas’ complicated regulatory framework, it depends. 

These types of transactions are based largely in part on what is known as “Peddler Rules.”  This is not relating to bicycles, but rather peddlers and solicitors. These laws were passed to protect consumers from unscrupulous door to door salespeople with vague and confusing contracts and bills of lading.

Watch Your Insurance Deductibles

If your dealership finances vehicles, most dealers require sufficient insurance to protect the property subject to the lien.  To accomplish this, most dealers require full / comprehensive coverage.  However, while most insurance provisions should require that the dealership be included as the lienholder on the policy, do your contracts stipulate what the deductible on that policy is?  Most dealers just assume that the policy will have a $500 deductible, but that is not always the case.

Trading In a Car Without a Title

As most auto dealers know, they cannot sell a vehicle without a title.  Auto dealers should also not take a trade-in without a blue title in the customer’s name.  If the customer does not have the title, but the vehicle is subject to the lien, the lienholder, such a bank or credit union, may have the title in their possession.  Dealers should contact the lender to discuss payoff for title release if applicable.

So what do you do if your customer claims to have a “clean” title, but can't remember where it is or is lost or destroyed?  Be Careful!  You could ask that the customer go to the local DMV regional service center with a VTR 34, Application for a Certified Certificate of Copy of Title.  Also some local tax assessor or title deputies may process a replacement for title, but wait times may vary. 

TDI Issues Bulletin on Named Driver Policies

As many of you may know, the 86th Texas Legislature passed House Bill 259, (Ed Thompson) which no prevents the use of named driver insurance policies.  House Bill 259 prohibits insurers from delivering, issuing for delivery, or renewing named driver policies on or after January 1, 2020. The prohibition does not apply to operators’ policies, as defined in Texas Transportation Code Section 601.077 (ex. usually an SR-22).  A named driver policy may not be renewed in 2020, but some named driver policies may be in effect after January 1, 2020 if in force before the deadline.

Bonded Title on Trade In?

TIADA routinely provides guidance to dealers applying for a bonded title when there is a missing title that cannot be located or an issue with the chain in custody of an original title.  However, a dealer recently contacted our office with the question of whether they could accept a trade in on a vehicle with a bonded title.

OCCC Orders of Interest

 
The Office of Consumer Credit Commissioner routinely publishes routine enforcement action.  TIADA is providing summaries of public orders that you can review at OCCC Enforcement Orders for review of your compliance efforts.  TIADA is not providing comment on the guilt or innocence of any parties involved.  

DMV Orders of Interest

 
The Texas Department of Motor Vehicles publishes contested enforcement action.  TIADA is providing summaries of public orders that you can review to enhance your compliance efforts. TIADA is not providing comment on the guilt or innocence of any parties involved.