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Section 25

Continuing Education Requirements / Recent Changes


Below are significant changes to the law and DMV regulations that have taken place since you last renewed your license, or obtained a license. This section also includes issues the DMV is particulary concerned about and is now monitoring more closely. We try to make it easy for you to catch up on these subjects easily and efficiently in one place.



Legacy License Plates

As of June 17, 2015, the California Legacy License Plate program permits the purchase of replica black and gold California license plates, similar to those issued in the 1960s. Only the 1960's style plates reached the required 7,500 orders before January 1, 2015, so only those black and gold plates will be issued as Legacy Plates. They can be ordered for any year model automobile, commercial vehicle, motorcycle, or trailer. The fee is $50.00. Your customers can also order their own personalized Legacy Plates by using the REG 17 form online at the DMV's website, or mailing the REG 17 with $50.00 to

DMV Special Processing Unit, MS D238

PO Box 932345

Sacramento, CA 94232-3450.



BHPH Dealer Starter Interrupt Notice Period Changed from 48 Hours up to 10 Days, and Double Fines

On August 12, 2015, AB 265 amended Section 2983.37 of the Civil Code to increase the time period a Buy-Here-Pay-Here dealer must warn a buyer before using a starter interrupt system. Under the prior law (AB 1447 discussed more fully below), a BHPH dealer was required to provide a written disclosure to the buyer at the time of sale informing the buyer that the dealer would warn the buyer no less than 48 hours before the use of starter interrupt technology to shut down the vehicle remotely. The dealer was also required to disclose the manner and method in which that warning would occur. AB 265 changes the time period to the following:

5 days before the use of starter interrupt technology for weekly payment contracts;

10 days before the use of starter interrupt technology for all other contracts; and

A final warning must be provided no less than 48 hours before the use of starter interrupt technology for both types of contracts.

Failure to provide the notice in the proper amount of time is a misdemeanor, and AB 265 increases the fine from a maximum of $1,000.00 to $2,000.00.



AB 1447: 30 Day, or 1,000 mile, Warranty Requirements, and GPS Use Limitations for Buy Here-Pay Here Dealers

Summary

Effective January 1, 2013, AB 1447 requires Buy Here Pay Here (“BHPH”) dealers to issue a 30 day, or 1,000 mile warranty, and to limit the use of GPS or starter interrupt devices on every BHPH vehicle sold.

Who Is a BHPH Dealer?:

A BHPH dealer is one who does BOTH of the following:

  • Enters into conditional sales contracts, pursuant to Civil Code section 2981, or lease contracts pursuant to Civil Code section 29857(d), which are subject to Title 14 of Part 4 of Division 3 of the Civil Code. However, a “conditional sales” contract does not include contracts for the sale of vehicles if all amounts owed under the contract are paid in full within 30 days.
  • Assigns less than 90% of all un-rescinded conditional sales or lease contracts to unaffiliated third-party finance or leasing sources within 45 days of the consummation of those contracts.

    A BHPH dealer IS NOT one who:

  • Is a lessor who primarily leases vehicles that are two model years or older
  • Is a dealer that certifies 100% of its vehicle pursuant to V.C. 11713.18, AND
  • Maintains an on-site service and repair facility licensed by the Bureau of Automotive Repair, AND
  • Employs five or more master technicians certified by the National institute for Automotive Service Excellence.

    AB 1447 Details

    BHPH dealers must provide a 30 day, or 1,000 mile warranty, covering at least the following components:

  • Engine, including all internally lubricated parts.
  • Transmission and transaxle.
  • Front and rear wheel drive components.
  • Engine cooling system.
  • Alternator, generator, starter, and ignition system, not including the battery.
  • Braking system.
  • Front and rear suspension systems.
  • Steering system and components.
  • Seatbelts.
  • Inflatable restraint systems installed on the vehicle as originally manufactured.
  • Catalytic converter and other emissions components necessary for the vehicle to pass a California emissions test.
  • Heater.
  • Seals and gaskets on components described in this subdivision.
  • Electrical, electronic, and computer components, to the extent that those components substantially affect the functionality of other components described in this subdivision.

    Any Used Car Buyer's Guide displayed on a vehicle offered for sale or lease by a BHPH dealer shall list each of the above systems and components and shall specify that the BHPH dealer will pay 100 % of the cost of parts and labor for repairs covered by the warranty. The BHPH dealer shall make the repair, or provide a refund notwithstanding the fact that the warranty period has expired, if the buyer or lessee notified the BHPH dealer of the failure of a covered system or part within the warranty period. This section shall not apply to any defect or nonconformity caused by the unauthorized or unreasonable use of the vehicle following the sale, or to any property damage not to the vehicle arising out of the failure of a covered part.

    A BHPH dealer shall not sell or lease any vehicle unless the vehicle meets all of the safety equipment requirements of Division 12 (commencing with Section 24000) of the Vehicle Code.

    Any agreement between a BHPH dealer and a buyer or lessee that disclaims, limits, or waives the rights set forth in this section shall be void as contrary to public policy. If a BHPH dealer fails to give a buyer a written warranty pursuant to this section, the BHPH dealer shall be deemed to have provided the warranty as a matter of law.

    AB 1447 Also prohibits requiring a buyer to make payments in person. In addition, it prohibits repossessing a vehicle, or charging a penalty, following a timely payment of a deferred down payment as specified in the purchase agreement.

    Further, AB 1447 prohibits BHPH dealers from using electronic tracking or disabling devices after the sale, except as specified below. Violations are misdemeanors, and are punishable by fines of up to $1,000.

    A BHPH dealer shall not do any of the following:

  • 1. Utilize electronic tracking technology to obtain or record the location of the vehicle, unless the buyer is expressly made aware of the existence and use of the tracking technology by the BHPH dealer, the buyer's written consent is obtained, and either subparagraph (A) or (B), or BOTH, apply:
  • (A) The electronic tracking technology is used solely to verify and maintain the operational status of the tracking technology, to repossess the vehicle, or to locate the vehicle to service the loan or keep the loan current.
  • (B) The electronic tracking technology is used solely for any optional service to the buyer and both of the following conditions are met:
  • (i) The agreement to utilize electronic tracking technology for the optional service is separate from the purchase and sale agreement, is not a condition of the purchase or sale agreement for the vehicle, and is executed after the completion of the purchase or sale agreement for the vehicle, AND
  • (ii) The buyer is permitted to cancel the optional service at any point in the future without affecting the sale of the vehicle, and is informed of his or her ability to do so.

    2. Disable the vehicle by using starter interrupt technology, unless the BHPH dealer complies with all of the following provisions:

  • A. Notifies the buyer in writing at the time of the sale that the vehicle is equipped with starter interrupt technology, which the BHPH dealer can use to shut down the vehicle remotely.
  • B. The written disclosure provided to the buyer at the time of sale informs the buyer that a warning will be provided no less than 5 days before the use of starter interrupt technology for weekly payment contracts and 10 days for all other contracts. A final warning of no less than 48 hours must be given before the use of starter interrupt technology for both types of contracts. The notice must also disclose the manner and method in which that warning will occur. The dealer shall offer the buyer a choice of warning methods, including warning from the device, telephone call, email, or text message, if available, provided that the warning method does not violate applicable state or federal law.
  • C. In the event of an emergency, the buyer will be provided with the ability to start a dealer-disabled vehicle for no less than 24 hours after the vehicle's initial disablement.



    AB 1534: Reasonable Market Value Label for Buy Here – Pay Here Dealers

    Summary

    AB 1534 requires BHPH dealers to prominently display a label on all used vehicles for sale that states the Reasonable Market Value (“RMV”) of that vehicle.

    The RMV is the average retail value of a used vehicle based on the condition, mileage, year, make, and model of the vehicle, as determined within the last 60 days by a nationally recognized pricing guide that provides used vehicle retail values, or pricing reports, to vehicle dealers or the public. (2) "Nationally recognized pricing guide" includes, but is not limited to, the Kelley Blue Book (KBB), Edmunds, the Black Book, or the National Automobile Dealers' Association (NADA) Guide.

    AB 1534 requires the RMV labels meet the following standards:

  • The RMV label must contain the heading: “REASONABLE MARKET VALUE OF THIS VEHICLE” in 16 point bold print, and text in at least 12 point print.
  • The RMV label must be located next to any window sticker identifying the equipment provided with the vehicle. If there is no such window sticker, the RMV label must be otherwise prominently displayed and readily readable.
  • The RMV label must include the information used to arrive at the value, including but not limited to the use of a nationally recognized used vehicle value guide.
  • The BHPH dealer shall provide prospective buyers a copy of any information obtained from a nationally recognized pricing guide that the buy-here-pay-here dealer used to determine the reasonable market value of the vehicle.
  • The RMV label must include the date the reasonable market value was determined.
  • The RMV label must indicate the RMV provided is only for comparison shopping purposes, and is not the advertised, or retail sales price, of the vehicle.



    AB 1215 – Electronic Processing of Documents and the National Motor Vehicle Title Information System (“NMVTIS”), Effective July 1, 2012

    Summary

    California law AB 1215, which went into effect July 1, 2012, did the following:

  • It increased the fees that dealers can charge for licensing.
  • It required new dealers, and encouraged used dealers, to use electronic lien and electronic titling (“ELT”) services, and;
  • Regulated dealer disclosure of damaged used vehicles.

    Under AB 1215, dealers are able to charge a document preparation fee of up to $80.00 for each new or used purchase/leased vehicle transaction. This is an increase over the former $55.00 for vehicle purchase transactions, and $45.00 for lease transactions. Despite this increased fee, it is anticipated that the use of the ELT system overall will save taxpayers as much as $9 million per year, resulting in a win-win for dealers and taxpayers.

    AB 1215 also required dealers to participate in the California DMV's Business Partner Automation Program (“BPA”). The BPA program provides fast and easy electronic title and registration processes that are intended to streamline the title and registration processes.

    AB 1215 further required California new and used dealers to obtain a National Motor Vehicle Title Information System (NMVTIS) report on each used vehicle before offering it for sale. Dealers can do this by using a sanctioned NMVTIS Consumer Access Provider such as instaVIN or Auto Data Direct. The NMVTIS report contains the most up-to-date (usually updated every 24 hours) title information from all states. The report contains vehicle history information from state DMV’s, salvage auctions, junkyards, and insurance companies. If the NMVTIS report reveals a branded title, such as “Salvage,” “Flood Damaged,” or one of approximately 50 other state branding terms, that information must be disclosed to the consumer. This is done by attaching a red 4” x 5” window sticker to the vehicle that warns potential buyers about the branding on the title. The dealer must also provide a copy of the NMVTIS-based car history report to the buyer. Only official NMVTIS Access Providers can be used to provide the reports to dealers. A complete list of NMVTIS Consumer Access Providers is available on the NMVTIS Web site, at NMVTIS Access Providers. For more specific information about the sticker and the NMVTIS reporting requirements, see the "NMVTIS" section below.

    AB 1215 Details

    Below are the AB 1215 rules, and how they changed prior laws & regulations. These rules became effective July 1, 2012, unless otherwise indicated

  • Temporary Operating Permit – Reduced from 6 months to 90 days: V.C. 445 (c) (2) Reduces the time a vehicle may be operated on the Used Vehicle Dealer Notice/Temporary Identification (“Temporary Permit”) from 6 months to 90 days. A driver operating a vehicle with the temporary permit after 90 days may be cited.
  • Electronic Registration System (“EVR”): V.C. 4456.4 (a)-(c) Requires licensed new car dealers to participate in a DMV approved Electronic Registration System (“EVR") for registering and titling all vehicle transactions. Off-Road, RV’s and motorcycles are exempt.
  • Private Industry Partners – New Vehicle Dealers – October 1, 2012 Deadline: V.C. 11713.1(y) States it shall be unlawful for NEW VEHICLE DEALERS to sell or lease a new motor vehicle after OCTOBER 1, 2012 unless the dealer has a contractual agreement with DMV to be a private industry partner pursuant to V.C. 1685. Off-Road, RV’s and motorcycles are exempt.
  • $80.00 and $65.00 Document Preparation Fees: V.C. 4456.5(a)-(c) Authorizes a dealer under a contractual agreement with DMV as a private industry partner to charge a document processing fee not to exceed $80.00. Dealers who are not a private industry partners shall not charge more than $65.00. The EVR filing charge may not exceed the actual amount the dealer is charged by a first-line service provider. No fee in this section shall be represented as a governmental fee.
  • Two Day Cooling Off Period Amendments: V.C. 11713.21(2)(D) Authorizes USED VEHICLE dealers, when offering a Contract Cancellation Option after OCTOBER 1, 2012, to charge 1% of the purchase price if the vehicle has a cash price of more than $30,000, but less than $40,000. The term “cash price” has the same meaning as subparagraph (A) of paragraph (1) of subdivision (a) of Civil Code 2982. Cash price” excludes registration, transfer, titling, license, California tire, and optional business partnership automation fees.
  • Conditional Sales Contract Amendments: Civil Code Section 2982, which applies to both new and used vehicle dealers, is amended as follows:

    (1)(A): The term “Cash Price” for Conditional Sales Contracts is the price of the vehicle excluding the following:

  • Document processing charges,
  • Charges to electronically register or transfer the vehicle,
  • Taxes imposed on the sale,
  • Pollution control certification fees,
  • Prior credit or lease balance on property being traded in,
  • The amount charge for a service contract,
  • The amount charged for a theft deterrent system,
  • The amount charged for a surface protection product,
  • The amount charged for an optional debt cancellation agreement, and
  • The amount charge for a contract cancellation option agreement.

    The Cash Price excludes the charge to be retained by the seller for document processing authorized pursuant to Section 4456.6 of the Vehicle Code. The Cash Price excludes the charge to electronically register or transfer the vehicle authorized pursuant to Section 4456.5 of the Vehicle Code. The Cash Price also excludes the subtotal representing the sum of the amounts described above. If the minimum finance charge provided by subparagraph (B) or subparagraph (C) of paragraph (1) of subdivision (j), if either is applicable, is greater than the earned finance charge as of the date of prepayment, the holder shall be additionally entitled to the difference. This subdivision shall not impair the right of the seller or the seller’s assignee to receive delinquency charges on delinquent installments and reasonable costs and fees as provided in subdivision (k) or extension or deferral agreement charges as provided in Section 2982.3. If the seller imposes a charge for document processing, or to electronically register or transfer the vehicle, the contract shall contain a disclosure that the charge is not a governmental fee. “Cash price” means the amount for which the seller would sell and transfer to the buyer unqualified title to the motor vehicle described in the conditional sale contract, if the property were sold for cash at the seller’s place of business on the date the contract is executed, and shall include taxes to the extent imposed on the cash sale and the cash price of accessories or services related to the sale, including, but not limited to, delivery, installation, alterations, modifications, improvements, document preparation fees, a service contract, a vehicle contract cancellation option agreement, and payment of a prior credit or lease balance remaining on property being traded in.

  • Lease Contracts: Civil Code Section Amendments Section 2985.8 of the Civil Code, which is applicable to both new and used dealers, is amended as follows: (4) A brief description of each vehicle or other property being traded in, and the agreed upon value of the vehicle or property, if the amount due at the time of signing the lease, or upon delivery, is paid in whole or in part with a net trade-in allowance; or if the “Itemization of Gross Capitalized Cost” includes any portion of the outstanding prior credit or lease balance from the trade-in property. (5) The charge, if any to be retained by the lessor for document processing authorized pursuant to Section 4456.5 of the Vehicle Code, which may not be represented as a governmental fee. (6) The charge, if any, to electronically register or transfer the vehicle authorized pursuant to Section 4456.5 of the Vehicle Code, which shall not be represented as a government fee.

  • NMVTIS: V.C. 11713.26(a)-(h) requires dealers to obtain a National Motor Vehicle Title Information System (NMVTIS) history report for all used vehicles for sale as of July 1, 2012. If the vehicle has a branded title, such as “salvage,” dealers must also attach a warning sticker on the vehicle advising the buyer. The specific requirements of V.C. 11713.26 are outlined below.
  • A dealer shall not display or offer for sale at retail a used vehicle, as defined in Section 665 and subject to registration under this code, unless the dealer first obtains a NMVTIS vehicle history report from a NMVTIS data provider for the vehicle identification number of the vehicle.

    If a NMVTIS vehicle history report for a used vehicle indicates that the vehicle is or has been a junk automobile or a salvage automobile or the vehicle has been reported as a junk automobile or a salvage automobile by a junk yard, salvage yard, or insurance carrier pursuant to Section 30504 of Title 49 of the United States Code, or the certificate of title contains a brand, a dealer shall do both of the following:

  • (1) Post the following disclosure on the vehicle while it is displayed for sale at retail in at least 14-point bold black type, except for the title "Warning" which shall be in at least 18-point bold black type, on at least a 4 x 5.5 inch red background in close proximity to the Federal Trade Commission’s Buyer’s Guide:
  • "WARNING According to a vehicle history report issued by the National Motor Vehicle Title Information System (NMVTIS), this vehicle has been reported as a total-loss vehicle by an insurance company, has been reported into NMVTIS by a junk or salvage reporting entity, or has a title brand which may materially affect the value, safety, and/or condition of the vehicle. Because of its history as a junk, salvage, or title-branded vehicle, the manufacturer’s warranty or service contract on this vehicle may be affected. Ask the dealer to see a copy of the NMVTIS vehicle history report. You may independently obtain the report by checking NMVTIS online at www.vehiclehistory.gov."

  • (2) Provide the retail purchaser with a copy of the NMVTIS vehicle history report upon request prior to sale
  • The above sections do not apply to a used vehicle for which NMVTIS does not have a record.

    As used in this section the following terms have the following meanings:

  • "NMVTIS" means the National Motor Vehicle Title Information System established pursuant to Section 30501 et seq. of Title 49 of the United States Code.
  • "NMVTIS vehicle history report" means a report obtained by an NMVTIS data provider that contains:
  • The date of the report
  • Any disclaimer required by the operator of NMVTIS
  • If available from NMVTIS, information establishing the following:
  • Whether the vehicle is titled in a particular state.
  • Whether the title to the vehicle was branded by a state.
  • The validity and status of a document purporting to be a certificate of title for the vehicle.
  • Whether the vehicle is or has been a junk automobile or a salvage automobile.
  • The odometer mileage disclosure required pursuant to Section 32705 of Title 49 of the United States Code for that vehicle on the date the certificate of title for that vehicle was issued and any later mileage information.
  • Whether the vehicle has been reported as a junk automobile or a salvage automobile pursuant to Section 30504 of Title 49 of the United States Code.
  • "Junk automobile," "operator," and "salvage automobile" shall have the same meanings as defined in Section 25.52 of Title 28 of the Code of Federal Regulations.
  • "NMVTIS data provider" means a person authorized by the NMVTIS operator as an access portal provider for NMVTIS.
  • "NMVTIS operator" means the individual or entity authorized or designated as the operator of NMVTIS pursuant to subdivision (b) of Section 30502 of Title 49 of the United States Code, or the office designated by the United States Attorney General, if there is no authorized or designated individual or entity.
  • Nothing in this section shall prohibit a NMVTIS data provider from including, in a NMVTIS vehicle history report containing the information required above, additional vehicle history information obtained from resources other than NMVTIS.

    This section shall not create any legal duty upon the dealer related to the accuracy, errors, or omissions contained in a NMVTIS vehicle history report that is obtained from a NMVTIS data provider or any legal duty to provide information added to NMVTIS after the dealer obtained the NMVTIS vehicle history report.

    In the event that all NMVTIS data providers cease to make NMVTIS vehicle history reports available to the public, this section shall become inoperative.

    In the event that all NMVTIS data providers cease to make NMVTIS vehicle history reports available to the public, it is the intent of the Legislature that the United States Department of Justice notify the Legislature and the department.

    This section does not apply to the sale of a recreational vehicle, a motorcycle, or an off-highway motor vehicle subject to identification under Section 38010.

    This section shall become operative on July 1, 2012.



    Registration and Vehicle Transfer Fees

    As of January 1, 2012, DMV is mailing vehicle registration billing notices 60 days in advance of the vehicle registration expiration date. The temporary 30-day grace period to pay renewal fees after the expiration date, which was in effect from July 1, 2011 through December 31, 2011, has ceased. The pre-July 1, 2011, penalty structure returns (i.e., 1 to 10 days late, 11 to 30 days late, 31 days up to and including one year late, etc.).

    Renewal fees must be paid if a registration application is submitted within 30 days of the vehicle registration expiration date. Renewal fees may be accepted if paid within 75 days prior to the vehicle registration expiration date. Companies participating in the DMV’s Business Partner Automation Program must continue to collect fees due within 75 days of the work date. Law enforcement will resume its regular enforcement actions for late vehicle registration.



    Salesperson’s License

    Starting January 1, 2011, dealers are permitted to post copies of salesperson’s licenses at their dealerships, instead of only original licenses which were required under the old rules. The original license must still be surrendered to the dealer while the salesperson is employed there. At such time as the salesperson is no longer employed by the dealer, the dealer must return the original license to the salesperson, and destroy the remaining copies. A salesperson may work for more than one dealership only if all of the dealers share a common controlling ownership (50% or more) of all the dealerships where the salesperson works.



    Notification of Consumer Credit Score

    When a dealer obtains a consumer’s credit score for use with a consumer’s credit application, the dealer must provide the potential buyer a summary of the credit information report in compliance with Federal credit score reporting requirements. The following form may be used to comply with these requirements: Credit Summary Form



    Smog Testing for Diesel Vehicles

    Smog testing of diesel vehicles in California began January 1, 2010. Diesel vehicles manufactured in, or after, 1998, with a gross vehicle weight rating of 14,000 lbs. or less must be smogged for original and transfer registrations. Biennial (every two years) smog inspections for owners renewing their diesel vehicle registrations will be phased in beginning with registration renewal dates of April 30, 2010, and later.

    Unlike gas powered vehicles, diesel vehicles that are four or less model years old WILL need to be smog tested. The four year old and newer smog test exemption for gas vehicles does not apply to diesel vehicles. You can charge the $50.00 smog fee for these diesel vehicles because they are actually being smogged.

    Also unlike gas powered vehicles, diesel vehicles that are six or less model years old ARE subject to biennial smog testing.

    Diesel vehicles located in non-biennial counties, vehicles where a smog was done in the last 12 months, and family transfers of diesel vehicles ARE exempt from the smog test, just like the gasoline vehicles.

    Sellers of on-road heavy duty diesel-powered vehicles with gross vehicle weight ratings ("GVWR") greater than 14,000 lbs., agricultural yard trucks with off-road certified engines, and certain diesel-fueled shuttle vehicles of any GVWR that are subject to this regulation must provide the following written disclosure to the buyer on the bill of sale:

    "An on-road heavy-duty diesel or alternative-diesel vehicle operated in Califonria may be subject to the California Air Resources Board Regulation to Reduce Particulate Matter and Criteria Pollutant Emissions from In-Use Heavy-Duty Diesel Vehicles. It therefore could be subject to exhaust retrofit or accelerated turnover requirements to reduce emissions of air pollutants. For more information, please visit the California Air Resources Board website at www.arb.ca.gov/dieseltruck."

    Sellers of a heavy duty tractor, or 53 foot long or longer box type trailer subject to this regulation, must also disclose the following in writing on the bill of sale:

    "A heavy-duty tractor and 53 foot or longer box-type trailer operated in California may be subject to the California Air Resources Board Heavy-Duty Vehicle Greenhouse Gas Emission Reduction Measure. These vehicles may be required to use low-rolling resistance tires and meet aerodynamic equipment requirements to reduce greenhouse gas emissions. For more information, please visit the California Air Resources Board website at www.arb.ca.gov/cc/hdghg.htm."

    For the latest news and information on diesel testing, go to Diesel Smog News.



    Federal Trade Commission Identity Theft Red Flag & Address Discrepancy Rules

    Starting June 1, 2010, all vehicle dealers engaging in finance activities must have a written Identity Theft Protection Program in place. The “Red Flag Rules” require the program to include, at a minimum, the following four “reasonable policies and procedures:”

  • Identify what are Red Flags for a covered account.
  • Detect Red Flags when they appear
  • Respond to the Red Flags to prevent and mitigate identity theft
  • Periodically update the program to reflect changes in risks to customers or the safety and soundness of the dealer against identity theft.
  • The Federal rules also require the following:

  • Approval of the written program by either the board of directors, or a committee of the board (if you have either one of these), or a designated employee at the senior management level.
  • Continued oversight/monitoring of the development, implementation, and administration of the program and training your staff.
  • The Red Flag rules do not specify an exact process for your program. You only need a program that is appropriate to the size and complexity of your financing activities at your dealership. The following are a few examples of ways to identify, detect, and respond to identity theft, and to update your program after you create it.

    Identifying Red Flags – Look for the following:

  • An application that appears to be forged or altered
  • A consumer report that contains an address discrepancy, fraud alert, or credit freeze
  • A change of address notice quickly followed by an application for a new credit card
  • A Social Security number that has already been provided by another
  • An address or phone number that has been provided by several others
  • A creditor has been notified that the customer is not receiving statements
  • A long inactive account is being used
  • Detecting Red Flags

  • Verify the identity of applicant
  • Authenticate your applicant by verifying their other existing accounts
  • Responding to Red Flags

  • Monitor the suspect account
  • Contact the customer
  • Change passwords
  • Notify law enforcement if you suspect identity theft
  • Updating the Program

  • Keep current with changes in identity theft techniques and prevention
  • Incorporate relevant new techniques for preventing, detecting, and stopping identity theft
  • Approval and Monitoring

  • The program must be reviewed and approved by your board of directors (if you have them), or board appointed committee, or a senior managing employee. Do this in writing
  • Periodically review the program, note its results, and make changes as needed
  • Failure to Comply

    Potential penalties included but are not limited to:
  • Civil penalties for each violation
  • DMV enforcement action – potential suspension or revocation of your dealer license
  • Final Point

    You need to be able to justify that the written policies and procedures that you put into place are reasonable and adequate to minimize the risk of identity theft at your dealership.

    Federal Identity Theft Red Flags Rules Link

    To review the actual Federal Red Flag law, go to Federal Red Flag Rules



    Wholesale Dealer Application Changes

    As of January 1, 2010, original wholesale dealer applications are to be mailed directly to DMV headquarters in Sacramento, instead of being submitted to your local DMV Inspector. We recommend you use the wholesale license application checklist to make things easier and to make sure you do not miss anything. Wholesale Application Checklist Applications take approximately six weeks to process. Questions should be directed to Occupational Licensing at (916) 229-3154. The application mailing address is: Department of Motor Vehicles, Occupational Licensing, P.O. Box 932342-L224, Sacramento, CA 94232-3420.



    Dealer License Changes – 10 Day Notice

    Dealer's must notify DMV within 10 days of making the following changes:

  • Changes to corporate officers, limited liability company members/managers, or association representatives. Note: A change of ownership automatically cancels the existing license, and the new owner must file an original license application. It is illegal for the new owner to use the existing license or supplies.
  • Changing your business name.
  • Changing your dealership address. This includes changing suite numbers, zip codes, etc.
  • Adding or removing business locations
  • Changing you license type. This would include, for example, changing from auto to RV, or motorcycle, or adding or deleting a franchise.
  • Failure to report is cause for cancelling your license. Use the change forms at License Change Forms.



    Dealers Responsible for Updates

    DMV requires you remain current with the laws, regulations, and DMV procedures which impact your business. You can access official DMV handbooks and helpful manuals through the DMV’s website at dmv.ca.gov. In addition, it is essential that you receive the Vehicle Industry News (“VIN”) bulletins, the Occupational Licensing Industry News (“OLIN”) bulletins, and other DMV bulletins which are published periodically throughout the year. These bulletins contain key new laws and regulations that may directly affect your daily business operations. To receive these bulletins automatically by e-mail, go to E-Mail Alert System. It is quick and easy to do.



    Dealer License Fees

    As of January 1, 2010, the California Car Buyers’ Protection Act of 2009, and Senate Bill 95, required anyone obtaining a dealer license to pay an original license fee of $175.00. Existing dealer license renewal fees were raised to $125 per year. Original auto broker endorsement fees were also increased to $100.00, and broker renewal fees were raised to $75.00 per year.



    Purchase and Trade-In Payment Deadline: 21 Days

    Beginning January 1, 2010, Senate Bill 95 required dealers purchasing, or taking a trade, to tender payoff of the prior credit or lease balance due within 21 calendar days. Dealers must also not transfer any ownership interest in the vehicle until they have made such payment. To see the full senate bill and its legislative history, go to Senate Bill 95.



    Report of Sale, V.C. 4456

    Vehicle Code Section 4456 requires dealers to do the following with respect to Reports of Sale:

    (1)The dealer or lessor–retailer shall attach for display a copy of the report of sale on the vehicle before the vehicle is delivered to the purchaser.

    (2) The dealer or lessor–retailer shall submit to the department an application accompanied by all fees and penalties due for registration or transfer of registration of the vehicle within 30 days from the date of sale, as provided in subdivision (c) of Section 9553, if the vehicle is a used vehicle, and 20 days if the vehicle is a new vehicle. Penalties due for noncompliance with this paragraph shall be paid by the dealer or lessor-retailer. The dealer or lessor–retailer shall not charge the purchaser for the penalties.

    (3) As part of an application to transfer registration of a used vehicle, the dealer or lessor–retailer shall include all of the following information on the certificate of title, application for a duplicate certificate of title, or form prescribed by the department:

  • Date of sale and report of sale number.
  • Purchaser's name and address.
  • Dealer's name, address, number, and signature or signature of authorized agent.
  • Salesperson number.
  • (4) If the department returns an application and the application was first received by the department within 30 days of the date of sale of the vehicle if the vehicle is a used vehicle, and 20 days if the vehicle is a new vehicle, the dealer or lessor–retailer shall submit a corrected application to the department within 50 days from the date of sale of the vehicle if the vehicle is a used vehicle, and 40 days if the vehicle is a new vehicle, or within 30 days from the date that the application is first returned by the department if the vehicle is a used vehicle, and 20 days if the vehicle is a new vehicle, whichever is later.

    (5) If the department returns an application and the application was first received by the department more than 30 days from the date of sale of the vehicle if the vehicle is a used vehicle, and 20 days if the vehicle is a new vehicle, the dealer or lessor–retailer shall submit a corrected application to the department within 50 days from the date of sale of the vehicle if the vehicle is a used vehicle, and 40 days if the vehicle is a new vehicle.

    (6) An application first received by the department more than 50 days from the date of sale of the vehicle if the vehicle is a used vehicle, and 40 days if the vehicle is a new vehicle, is subject to the penalties specified in subdivisions (a) and (b) of Section 4456.1.

    7. The dealer or lessor–retailer shall report the sale pursuant to Section 5901.

    (b) (1) A transfer that takes place through a dealer conducting a wholesale vehicle auction shall be reported to the department by that dealer on a single form approved by the department. The completed form shall contain, at a minimum, all of the following information:

    (A) The name and address of the seller. (B) The seller's dealer number, if applicable. (C) The date of delivery to the dealer conducting the auction. (D) The actual mileage of the vehicle as indicated by the vehicle' s odometer at the time of delivery to the dealer conducting the auction. (E) The name, address, and occupational license number of the dealer conducting the auction. (F) The name, address, and occupational license number of the buyer. (G) The signature of the dealer conducting the auction.

    (2) Submission of the completed form specified in paragraph (1) to the department shall fully satisfy the requirements of subdivision (a) and subdivision (a) of Section 5901 with respect to the dealer selling at auction and the dealer conducting the auction.

    (3) The single form required by this subdivision does not relieve a dealer of any obligation or responsibility that is required by any other provision of law.

    (c) A vehicle displaying a copy of the report of sale may be operated without license plates or registration card until either of the following, whichever occurs first:

  • (1) The license plates and registration card are received by the purchaser.
  • (2) A six-month period, commencing with the date of sale of the vehicle, has expired. Note: On July 1, 2012, and thereafter, this six month period will be reduced to 90 days.


  • Administrative Service Fees

    V.C. Section 4456.1 states as follows:

  • (a) A dealer or lessor-retailer who violates paragraph (1), (2), or (7) of subdivision (a) of Section 4456 shall pay to the department an administrative service fee of five dollars ($5) for each violation.
  • (b) A dealer or lessor-retailer who violates paragraph (4), (5), or (6) of subdivision (a) of Section 4456 shall pay to the department an administrative service fee of twenty-five dollars ($25) for each violation.
  • (c) Subject to subdivision (d), each violation of Section 4456 is, in addition to the obligation to pay an administrative service fee, a separate cause for discipline pursuant to Section 11613 or 11705.
  • (d) A violation of subdivision (a) of Section 4456 because of a dealer or lessor-retailer's failure to submit to the department an application for registration or transfer of registration is a cause for disciplinary action pursuant to Section 11613 or 11705 only if the initial application is submitted 50 days or more following the date of sale of the vehicle if the vehicle is a used vehicle, and 40 days if the vehicle is a new vehicle.


  • Report of Sale Order Forms

    Report of Sale forms are issued through a DMV warehouse. Local DMV Inspectors retain a small supply for newly licensed dealers, and may have a few on hand for emergencies only. The correct procedure for timely ordering more ROS forms can be found at ROS Order Forms



    Dealer Plate Orders

    An OL-22 form must be completed to get additional dealer plates, replacement plates, stickers, or a duplicate registration card. You can download this form at Dealer Plate Order Form. Completed forms are to be submitted to your local Occupational Licensensing Inspector.



    Year of Manufacture License Plates Use Expanded Through 1969 and 1972

    As of July 1, 2009, California’s “Year of Manufacture” license plate program has been expanded to cover 1969 or older model year vehicles, and commercial vehicles or pickup trucks that are 1972 or older model years. This means you can put the classic California black and yellow plates back on these vehicles for an original look. The original application fees are increased from $35.00 to $45.00. The $10 annual renewal fee, $20 plate retention fee, and $12 plate transfer fee remain the same.

    The plates you intend to use must not have a current DMV record on file. The year sticker on the plates must match the model year of the vehicle being registered. The exception to this rule is 1963 model vehicles do not need any year sticker as none were originally issued in 1963. For example, a 1965 Corvette would have a set of black and yellow plates with a 1965 sticker issued by DMV in that year. A 1963 split window Corvette would need no year sticker at all.



    Unlicensed Dealers - Vehicles Impounded

    Effective January 1, 2009, Assembly Bill #2042 amends Vehicle Code Section 22651 to authorize a peace office to remove and impound vehicles when a person is cited as an unlicensed dealer.



    Smog Fee for Temporary Operating Permit

    As of January 1, 2009, new restrictions were placed on all Temporary Operating Permits ("TOP's") issued for the purpose of obtaining a biennial smog certificate, regardless of the registration expiration date.

    Changes

  • Vehicle owners must present a failed smog test report when requesting a TOP.
  • A $50 fee will be collected when the TOP is issued.
  • The TOP is only valid for 60 days from the vehicle's registration expiration date, or 60 days from the date that the vehicle was removed from Planned Non-Operation ("PNO"). For example, if the registration expired, or the vehicle was removed from PNO status, on February 12th, and the owner presents a failed smog test report issued on February 25th, the TOP will be valid until April 12th.
  • Only one biennial smog TOP can be issued to the same vehicle within a two-year period.
  • These changes only apply to a TOP issued for biennial smog certification.


  • No-Texting Law

    As of January 1, 2009, writing, sending, or even reading a text-based communication while driving is against the law in California. The law applies to electronic wireless communication devices where you manually input the text message. The devices include, but are not limited to, those that offer text messaging, instant messaging, or electronic mail. The fines are $20 for a first offense and $50 for each subsequent offense. Further penalties may be assessed for multiple violations, more than tripling the base fine amount.





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