COUNSELOR’S CORNER By JOHNNIE BROWN, Esq. A fter a winter issue break, Counselor’s Corner is happy to be back to address a few pressing compliance issues. This may be a review for some, but the following issues reflect circumstances that I am finding more common. A quick refresher may alleviate some future legal claims. Obviously, the goal is to provide an excellent customer experience for those buying motor vehicles and for us to make sure we are compliant with state and federal regulations. Selling “As-Is” In West Virginia In 2019, our legislature passed West Virginia Code §46A-6-107, which allows West Virginia motor vehicle dealers to sell certain types of vehicles “as-is.” Importantly, there are limitations, and specific disclosure requirements are required to be met, otherwise the “as-is” sale is void. In order for a vehicle to be eligible to sell “as-is,” it must fit into one of five categories: (1) the vehicle must be inoperable and a total loss; (2) the vehicle is custom built or modified for show purposes or racing; (3) vehicle is sold for less than $4,000.00; (4) the vehicle is driven for more than 100,000 miles; or (5) the vehicle is seven years of age or older. Just a couple of clarifications, you can have a vehicle that is less than seven years old but as long as it has been driven more than 100,000 miles it will qualify. The seven years is determined by looking at the model year of the vehicle and using January 1 of that model year as its so-called “birth date.” For example in the model year 2023, only vehicles that are a 2016 model year are eligible for the seven years of age or older eligibility. Once a vehicle is eligible, please understand that there are specific disclosure requirements, including a statutorily defined disclaimer on the “front page of the contract of sale.” The disclaimer must be in 12-point boldface type, the heading must be in 16-point extra boldface type, and it also must be boxed. We recommend that both the buyer and the co-buyer initial within this disclosure box. The buyer and the co-buyer must acknowledge that they have received a vehicle history report, such as Carfax or Autocheck, and the dealer must disclose any defects or malfunctions disclosed by the prior owner or discovered on inspection. This latter point emphasizes the need for a process in which the prior owner completely discloses to the current dealer prior defects and malfunctions so that proper documentation may be provided to a future “as-is” customer. The buyer does have a right of recession for three days based upon significant mechanical issues or issues which existed at the time of sale, but only if the vehicle was sold under the price, mileage or age eligibilities. Consequently, the three-day right of recession is limited to those occasions. Last, please make sure that you are using the proper Buyer’s Guide and completing it correctly. Likewise, you must use proper “as-is” disclaimer forms and confirm that your West Virginia Motor Vehicle Purchase Agreement is compliant for an “as-is” vehicle. Motor Vehicle History Reports Unfortunately, I am seeing more and more instances where, despite procedures in place, a motor vehicle history report is not provided to a consumer. While there are no specific state statute or regulation that requires a dealer to use or provide a motor vehicle history report, such as Carfax or Autocheck, to a consumer, I believe that over the years, the practice has become industry standard for all pre-owned motor vehicles. wvcar.com 16
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