Unfortunately, we all know that motor vehicle history reports have limitations and that things can be missed or reported after a motor vehicle has been sold. Motor vehicle history reports have been known to change from the time dealer acquires a motor vehicle to when it is sold. First, please reinforce the procedure to provide a motor vehicle history report to all consumers on pre-owned motor vehicles, and make sure that the motor vehicle history report is current with the date of sale. If there are any negative deficiencies or events noted within the history report, they should be highlighted and the consumer should initial each highlighted item so that no confusion arises later that such information was disclosed. Also, I recommend either the use of a separate form or that a dealer creates a stamp that can be placed on each motor vehicle history report. I have used Carfax as an example here as it has the largest market share. I recommend that this disclosure read as follows: ATTENTION!!! This Carfax is for informational purposes only. We make no representations concerning the accuracy or completeness of this Carfax report. Carfax controls all content contained within this report and not this dealer. An automobile can be involved in an accident and Carfax not have it recorded. Most used cars have had paint work or some repair. You should rely upon your own inspection of this motor vehicle. We encourage you to carefully look over the motor vehicle. We have performed a West Virginia motor vehicle safety inspection to place a proper inspection sticker on the car. Please initial here to confirm that you have read this statement. Voluntary Protection Products Disclosures One of the more common issues we see is a consumer alleging that they were not informed that they purchased a particular voluntary protection product or that they were required to purchase it. Unfortunately, this is where documentation becomes so important. If you are using a menu selling system, screenshots can be printed and the customer initializes those items which they wish to purchase. We should have systems and training in place in which any voluntary protection product is clearly disclosed on the bill of sale and the retail installment contract. There should also be a separate document within the retail file specifically disclosing the voluntary protection product, its terms and conditions, pricing, and language reflecting that the purchase of the product is not required in order to obtain credit. As all of you are aware, there are current proposed FTC regulations that would significantly change how voluntary protection products are sold and likely significantly impact the ability to sell these products to the consumer. On the other hand, and as stated above, we want every customer to have an excellent experience and do not wish them to go away from the dealership thinking that they purchased something that they were unaware of or were somehow misled. It is so important to have proper signatures and proper disclosure procedures in place. Customer Relation Management (CRM) Notes Interestingly, customer relationship management systems, and the notes kept within, have become helpful in recent consumer complaints. CRM procedures can document conversations with a consumer about the motor vehicle post-sale and particularly any mechanical or service issues. Having a good CRM or business development center which handles these types of communications and recording of them can be helpful when disagreements arise about the purchase of a motor vehicle or subsequent service issues. I encourage us to use this tool not only as a way to develop customer relations, but to also provide an accurate record to assist us with consumer complaints. Recalls Recalls are becoming more and more common in the automotive industry. I wish to reiterate and emphasize our responsibility as it relates to the sale of new and used motor vehicles with an open recall. A new car may not be sold with an open recall. While this can create expense as it sits on your floor plan, there is federal law that does allow a dealer to recover the floor plan interest on the motor vehicle due to an open recall which the manufacturer simply cannot resolve or provide the needed part. There is no prohibition to selling a used car with an open recall. However, I encourage judgment to be used in this situation. If the used car is one of the same line make of new motor vehicles which you sell, then strong consideration has to be given to not selling that used motor vehicle until the recall is completed. However, every recall is not the same. Some relate to simple items and others are much more safety sensitive. Recalls that relate to safety-sensitive issues should not be sold if it endangers any consumer or the public. When we have used cars that are not of the line make for which we hold our sales and service agreement, these can become more difficult. Fortunately, there are governmental websites that clearly show if a vehicle has an open recall. Again, judgment must be used. If the recall is a safety-sensitive issue, then we need to exercise hesitancy and err on the side of not selling. Otherwise, a pre-owned car with a minor recall issue can be sold, but I would encourage it to be done with a proper disclosure form. The West Virginia Dealers Association does have a disclosure form for selling a used car with an open recall and, if you have not previously received it, do not hesitate to contact the Association or myself and we will provide it to you. The F&I office can create tremendous exposure for a motor vehicle dealer. I hope that this review and reminder of these commonly seen issues can assist you with your compliance efforts. As always, the Association is there to assist you and I encourage you to call with any compliance questions. Issue 1, 2023 17
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