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 those peddles! A dealer should not contact the consumer at their home, but the consumer must reach out to the dealership first via phone or email.  After that initial contact is made … the consumer, most related negotiations are deemed to have occurred at the dealership.  Again, all sales must have a nexus to a dealer's physical location.

Timing of the transaction to deliver a vehicle. This is important.  Generally, a delivery should only occur after the deal has closed.  Dealers need to avoid what are referred to as “spot deliveries.”  This fraudulent practice consists of selling and delivering a consumer a car after signing a Retail Installment Contract and then calling the consumer back to sign a new contract with higher interest, higher payments or to put more money down. There are special contracts such as a conditional delivery agreements, which could be entered into instead of a Retail Installment Contract. These contracts make it clear to the consumer that the deal is not final. The Office of the Consumer Credit Commissioner has approved a form that contains three elements: 1. The buyer also has an option to cancel the sales contract before credit is approved; 2. The buyer can cancel with full refund and return of trade-in if financing is not approved in accordance with the terms described in the purchase order. The buyer's liability in case of cancellation is limited to rental, excessive mileage and use, which are items set out in the contract.

Time to chill.  What about FTC's Cooling Off Rule?  If you are selling and delivering vehicles over the phone on a regular basis, you may need to comply with the Federal Trade Commission's “Cooling-Off Rule” which gives consumer's a 3-day right to cancel a sale made at their home or workplace, but not all sales are covered.  Texas has similar provisions in the Texas Finance Code 348.111 BUYER'S RIGHT TO RESCIND CONTRACT which states in part “Until the retail seller complies with Section 348.110, a retail buyer who has not received delivery of the motor vehicle is entitled to: (1)  rescind the contract; (2)  receive a refund of all payments made under or in contemplation of the contract;  and (3) receive the return of all goods traded in to the retail seller under or in contemplation of the contract or, if those goods cannot be returned, to receive the value of those goods.”

What type of truck is delivering the vehicle?  Even this is covered in the law. Be careful about this point.  If a consumer elects to have a vehicle delivered by the dealer, it MUST be via a flatbed truck.  If it is a regular tow truck or truck and trailer, the dealer may be required to be licensed by the Texas Department of Licensing and Regulation. Also remember that vehicle must have tags during transportation. Per DMV “Each motor vehicle being transported using the full mount method, the saddle mount method, the tow bar method, or any combination of those methods in accordance with Transportation Code, §503.068(d), must have a dealer's or converter's temporary tag or a buyer's temporary tag, whichever is applicable, affixed to that vehicle. “


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