Requirements for Displaying a Vehicle Off-Premises
TIADA compliance consultation service recently received a call from a dealer considering purchasing a property a mile away because it had highway frontage. In contrast, their lot did not, and they wanted to use this property as a display area. After the call, the dealer is now considering using it as a storage lot because the Texas Administrative Code states a dealer display area must be “located at the retail dealer's business address or contiguous with the retail dealer's address,” but a noncontiguous storage lot is permissible.
What is Contiguous?
So, what constitutes a contiguous property? To meet the contiguous requirements, the property must share a common border and not be separated from each other by a road or another piece of property. Despite a property being just across the street, it does not meet the requirement. Yet, if you find a piece of property that is not contiguous, you can still use it for a storage lot.
A non-contiguous storage lot is permissible only if there is no public access and no sales activity occurs at the storage lot. A sign stating the retail dealer's name, telephone number, and the fact that the property is a storage lot is permissible. To avoid crossing over from storage to selling, you should never take the customer to see vehicles at the lot. Instead, bring the car to your dealership and avoid placing advertising on the vehicles at the storage lot. For example, having the price of a car on the front windshield may be considered offering the vehicle for sale.
Overall, a noncontiguous storage lot can allow you to create more foot traffic if done properly, but you must keep in mind that it cannot be used for selling. If you have additional questions about storage lots and display areas, please feel free to reach out to TIADA.