23 available facts to determine if interim use applies. These factors include, but are not limited to: the retail sales history of such type of vehicles; inventory records; advertising on the vehicle and at the location of the vehicle; manufacturer’s contract terms, conditions, discounts and rebates; length and location of use or lease prior to sale; whether depreciation is taken under IRC Section 167; ownership and control documents; and if leased, whether the lease contract provisions provide that the vehicle is subject to recall, substitution allowance, and sale during the lease period. QUESTION 5: I spot-delivered a car to a customer, but I cannot obtain financing for him. What do I do if the customer refuses to return my vehicle or returns it with excess wear and tear or damage? If a customer refuses to return the vehicle, the dealer may sue for replevin and/or damages. However, the dealer does not normally have the right to repossess the vehicle at this time. Repossession is an extraordinary remedy that may be exercised by a dealer only when he has a security interest in the vehicle and there is a default. Inasmuch as the security interest normally won’t arise until execution of the retail installment contract, repossession is not available to dealers in these instances. Oftentimes dealers use riders to the Retail Installment Contracts with language that provides that the buyer shall return the automobile and that the seller shall return to the buyer all deposits less the value of any damage done to the vehicle. However, the Illinois Attorney General has issued an opinion that such language is in violation of Section 2C of the Illinois Consumer Fraud and Deceptive Business Practices Act which provides in relevant part: “If the furnishing of merchandise … is conditioned upon the consumers … having a credit rating acceptable to the seller and the seller rejects the credit application of that consumer, the seller must return to the consumer any down payment … made on the purchase order or contract and may not retain any part thereof. The retention by the seller of part or all of the down payment … is an unlawful practice within the meaning of the Act.” QUESTION 6: Does prior use need to be disclosed on the sale of a used vehicle? A recent Illinois appellate case indicates that a selling dealer has an affirmative obligation to disclose prior use of a used vehicle, specifically if the vehicle was used in fleet or rental operations. Moreover, this obligation is not limited to only the previous owner’s use. It appears that a good method of meeting this duty imposed by the courts would be to provide a customer with a complete vehicle history at the time of sale, using one of the well-known services to accomplish this. This information should be made available to the customer prior to his executing the closing documents; the dealer should have the customer sign an acknowledgment that he has provided this information prior to the sale and should retain that acknowledgment in the dealer file.
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