SB 335 Revises various laws regarding the registration, licensure and sale of motor vehicles
Sponsor: Griesheimer Co-Sponsor(s)
LR Number: 1572S.01I Fiscal Note: 1572-01
Committee: Transportation
Last Action: 3/14/2007 - Hearing Conducted S Transportation Committee Journal Page:
Title: Calendar Position:
Effective Date: Varies

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Current Bill Summary

SB 335 - This act makes various revisions to laws regarding the registration, licensure, and sale of motor vehicles.

DEALER PLATES - This act makes a sectional correction reference with respect to manufacturer and dealer plates (Section 301.130).

TEMPORARY PERMITS - This act modifies various provisions relating to temporary permits. The act removes references to the terms "plate" and "paper plate" from the temporary permit provision. The act further increases the fee that a dealer may charge for a temporary permit from $7.50 to $10.50 (Section 301.140).

IN TRANSIT TAGS - The act repeals the provision of law which required dealers to use "In Transit" tags when moving motor vehicles from one dealer to another or from the manufacturer (Section 301.170).

TEMPORARY PERMITS FOR RESIDENTS - The act repeals the provision of law that required the issuance of temporary permits to nonresidents (Section 301.177).

OUT OF STATE CERTIFICATE OF OWNERSHIP - The act provides that the absence of a prior designation on a an out-of-state title that the vehicle is a reconstructed motor vehicle, motor change vehicle, specially constructed motor vehicle or prior salvage vehicle shall not relieve the transferor of the duty to exercise due diligence with respect to the title prior to its transfer. If the transferor exercises due diligence with respect to the out-of-state title, then the transferor shall not be liable despite the fact that the title was not properly designated (Section 301.190)(also repeals a doubly-enacted Section 301.190).

SALES BY DEALERS - The act require dealers to have a certificate of ownership or proof that the dealer has applied for a certificate of ownership or that a prior lien has been satisfied by the dealer for every motor vehicle in the dealer's possession (Section 301.200).

SALVAGE POOL OR SALVAGE DISPOSAL SALES - The act increases the fee from $25 to $100 imposed on out-of-state prospective purchasers at salvage disposal sales (Section 301.218).

UNCLAIMED VEHICLES REPORTS AND CLAIMS FOR STORAGE - Under this act, dealers and persons operating garages in which a motor vehicle remains unclaimed for a period of 15 days, may report the unclaimed vehicle to the department of revenue. Under the current law, dealers are required to report such unclaimed vehicles to the Department of Revenue. The act also repeals the provision which provided that dealers who failed to report unclaimed vehicles to the department of revenue forfeited all claims and liens for storing the vehicle (Section 301.280).

MOTOR VEHICLE DEALER DEFINITION - The act modifies the term "motor vehicle dealer." Under the act, the sale of 12 (current law is 6 or more) or more motor vehicles in a calendar year shall be required as evidence that the person is engaged in the motor vehicle business and is eligible for licensure as a motor vehicle dealer. The act also sets forth a minimum sales requirement of 12 sales a year. If a dealer fails to meet the minimum sales requirement, the dealer is prohibited from renewing his or her license for one year. The act sets forth similar requirements for trailer dealers (Section 301.550).

BONA FIDE ESTABLISHED PLACE OF BUSINESS - This act requires a motor vehicle dealer application to include an annual certification that the applicant has a bona fide established place of business for the first three years and only for every other year thereafter. A bona fide established place of business for any motor vehicle dealer, boat dealer, wholesale motor vehicle dealer, trailer dealer, or wholesale or public auction, in addition to other current legal requirements, must be a permanent enclosed commercial, non-residential building. All bona fide places of business must display an exterior sign that is 12" in height (current law requires the sign to 6" in height).

The act provides that the photograph that accompanies a dealer application shall not be any smaller than 5" by 7".

DEALER SURETY BOND - The act requires dealers to file a corporate surety bond in the amount of $100,000 (currently $25,000).

DISTINCTIVE DEALER LICENSE NUMBERS - The act modifies the provision which sets forth the dealer license number designations (Section 301.560.4).

USED MOTOR VEHICLE DEALER EDUCATIONAL SEMINAR - The act exempts public auto auctions and applicants currently holding a new or used license for a separate dealership from showing proof of completing an educational seminar when applying for a used motor vehicle dealer's license. The act also specifically provides that current new motor vehicle franchise dealers and motor vehicle leasing agencies are not subject to the educational seminar requirements.

The act limits the number of additional plates a new motor vehicle manufacturer may hold to no more than 299 plates. New and used dealers are limited to 1 additional plate or certificate of number per ten-unit transactions annually (Section 301.560).

Section 301.560 has an effective of January 1, 2008.

MOTOR VEHICLE SHOWS - Under the act, motor vehicle dealers may participate in no more than two motor vehicle shows and conduct sales away from the dealer's licensed place of business if the event is conducted for not more than five consecutive days. If any show or sale includes a class of dealer or franchised new vehicle line-make, that is also represented by a same class dealer or dealer representing the same line-make outside of the boundary lines of the city or town and is within 10 miles of where the show or sale is to take place, the dealer outside of the boundary lines of the city or town shall be invited to participate in the show or sale. The act limits off-site sales to five days in duration (down from 10 days) and increases the permit fee for off-site sales to $500 (up from $200)(Section 301.566).

ADVERTISING STANDARDS - Under this act, the terms "invoice price" and "$....below/over invoice" shall not be used in advertisements. The current law currently allows these terms. The act also removes the prohibition on advertisements that offer to match or better a competitor's price (Section 301.567).

SALE OF 5 OR MOTOR VEHICLES IN A YEAR WITHOUT A LICENSE - This act makes it unlawful for a person to sell 5 (down from 7) or more motor vehicles in a calendar year unless the person is licensed or meets other exceptions listed in the statute. The sale of five or more vehicles within a calendar year shall be deemed to be acting as a motor vehicle dealer without a license (Section 301.570).

FINANCE CHARGE-BUY RATE CONTRACT RATE - Under this act, no motor vehicle dealer shall participate in a finance charge for the financing of a motor vehicle by a consumer that would result in the difference between the buy rate and the contract rate of more than 3% (Section 301.554).

USED MOTOR VEHICLE RETAIL CONTRACT CANCELLATION OPTION - Under this act, a motor vehicle dealer shall not sell a used vehicle at retail to an individual for personal, family, or household use without offering the buyer the opportunity to cancel the contract and allowing the buyer to return the vehicle without cause. This act does not apply to a used vehicle having a purchase price of $40,000 or more or to any lease of a used motor vehicle. The buyer will have a two-day contract cancellation option and may cancel the contract provided the buyer pays a restocking fee not to exceed $500. The act provides what the contract cancellation option agreement must contain. For instance, the agreement shall contain a statement specifying the maximum number of miles the vehicle can be driven in order to be eligible for cancellation (the act specifies that the maximum number shall not be any fewer than 200 miles).