Internet Vehicle Sales
Working Group
1
Internet vehicle sales offer the ability for licensed motor vehicle dealers to expand their businesses and save money previously spent on other types of advertising.
May ease the buying process and expand the choices for buyers and sellers, the internet can also be a conduit for fraudulent activity.
A majority of states do not regulate motor vehicle internet sales but would like to have guidance in this area.
Therefore the working group will develop best practices for the regulation of internet vehicle sales.
The best practices will provide recommendations, tools, and educational materials to member jurisdictions to identify, understand and combat fraud and deceptive internet vehicle sales practices.
The working group will also identify issues and develop guidance for jurisdictions to address concerns arising from wholesale dealer licensing.
• Dealer licensing and/or have managerial oversight of motor vehicle dealer licensing.
• Title issuance process and/or have managerial oversight of said process.
• Legal and/or policy area expertise.
• Law enforcement officer or investigator with vehicle fraud investigation expertise.
Eleven members
representing the following
disciplines with a balance
of members from all four
AAMVA regions:
Jennifer Berry, Chair (CA)
William Harbeson, Vice-chair (TX)
David Silk (ME)
James Walker (NJ)
Ted E. Smith (KS)
Michael Athey (IA)
Teri Baltisberger (NV)
William Childress (VA)
Jeff DeVere (WA)
Larry Purdy (OR)
Monica Weischedel (SD)
Cathie Curtis (AAMVA) Project Manager
Paul Steier (AAMVA)
Pros Cons
Easy; convenient Legal problems if something goes wrong
Better selection Practical problems
Better price choice How do they get problems resolved? Where do
they go?
Do not need to have counter pressure from
sales people
Seller may not have a corporation existence
Can see vehicles in 1 location but buy from
another.
Seller may not be licensed
More competition; may be better prices How do the buyers see the required labels and
stickers Maroney sticker and Used car buyers
guide
More risks Reduced controlled consumer protections
Some dealers are selling vehicles legitimately
on-line but other sellers are not licensed
Pros Cons
Increased customer base Reduced value of brick and mortar
location
Bigger market More informed consumers
Lower overhead Harder to sell add-ons
Can see vehicles in 1 location but buy
from another, can move vehicles around
More competition, competing with
unlicensed dealers
Do not need to have physical display
area
Franchise restrictions hard to identify
Dealer Perspective
Pros Cons – (Questions)
There are some digital tools available Where are the vehicle records?
Consumers want to take the risk to buy on
internet
Who do you license?
States should be consumer oriented How do you find the dealer?
Leverage the internet to do a better job, let the
internet help with the solution
Who has jurisdiction over the sale?
A more informed consumer can help reduce
fraud
In what jurisdiction does the sale take place?
States should look at regulatory requirements
from consumer’s perspective
Is the seller in the country? Or in another
country?
Need to protect consumers who want to buy on
the internet.
How do you enforce current laws?
Need to help consumers understand if the seller
is licensed or unlicensed dealer.
Federal laws require paper documents
Pros Cons
Can help to educate the consumer, use public
awareness campaigns
How does the regulator reach out to the seller? Where
do they find their physical location?
Digital Curbstoners hard to find
Hard to prosecute Curbstoners
Title fraud is a problem
Who do the laws protect? Franchise new dealers or
consumers?
Unlicensed dealers
Consumers may not know that they can complain to
DMVs about on-line sales by unlicensed dealers.
Some current regulations do not apply to on-line
sales; they are outdated
Unlicensed brokers can be in the middle of
transactions
Currently reactive regulation instead of proactive
Need to Define:
• Broker
• Buyer
• Dealer
• Owner
• Sale
• Seller
• Third Party
• Others?
3 subgroups looking at concerns and issues related to:
Advertising
Dealer Licensing
Legal and Enforcement Concerns
Advertising Discussions include:
New business models
Third party advertising
Potential for fraud
Potential best practices to address:
• Should not be false or deceptive.
• Must be truthful and lawful.
• Must comply with all other advertising requirements
• Variation of laws across jurisdictions
• Hover over ad to see more information
• Consumers may not aware that the ad was placed by a dealer
• Tools to identify licensed dealers and unlicensed dealers
• The real price; MSRP, conditional rebates, etc.
• Where is the vehicle is located
How extensive are jurisdictional laws/rules? How do they
respond to complaints?
What enforcement tools are available to them? Violations,
retraction, cease and desist letters?
Should there be limitations on internet advertising?
Do some jurisdictions pre-approve ads?
What are the different types of business models for selling
vehicles on -line?
What is coming in the near future for social media?
Can enforcement access social media data on vehicles
advertised for sale?
Dealer Licensing discussions include:
Dealer Licensing Requirements
Unlicensed dealers
Doing Business in a State
Manufacturer direct sales to consumers
Regulatory model for internet sales
International sales; cross border sales
Education on doing business selling vehicles
Potential Best Practices could address:
• Retail vs wholesale, must represent themselves as a dealer
• Physical location, signs, hours of operation, vehicles on-site vs not on site
• Types of dealer licenses, brokers, wholesalers, limits on number of dealers on one location
• Identifying and addressing unlicensed dealers
• Determining the location of an internet sale, which state’s laws regulating the sale
• Is there a need for an Internet Sales only license?
• How extensive are jurisdictional laws/rules? How do they respond to complaints?
• What enforcement tools are available to them? Violations, retraction, cease and desist letters?
• Do jurisdictions pre-approve ads?
• What is coming in the near future for social media?
• How to is Curbstoning addressed in jurisdictions?
• What tools can be used to analyze the number of vehicles sold
• What are the most effective ways to educate consumers
• What federal laws apply?
Legal and Enforcement discussions include:
• Jurisdiction over the sales of the vehicles
• Virtual vs physical locations
• Investigative tools
• Consumer Protection
• Consumer Education
Potential Best Practices could address:
• If all the paperwork is handled in one state but the sale begins in another state, who has jurisdiction?
• Physical location currently required; potential for virtual locations
• Zoning issues
• Consumers may need to be able to go to the location
• Warrant required?
• Records need to be available for inspection; enforcement based on records, anchors them to a state, location
• Create checklist for consumers: include inspection, title check, NMVTIS check, licensed dealer vs private sale
• When is the sale consummated, when can a buyer back out of a sale? Where does the sale take place? At what point has the sale been finalized. Sales contract?
• Which jurisdiction’s law applies?
• Can virtual locations provide consumer protection?
• Can the consumer locate the seller if there is a problem?
• How do you regulate and investigate enforce without the physical location
• What can be produced to provide consumer education?
Working Group is also looking at the unique issues related to wholesale dealer licensing and may also develop some best practices
• It is problematic in some states and not in other states.
• There are some fraudulent activates being discovered in some states.
• Some are selling vehicles directly to the pubic.
• Licensed in one state but doing business in another state.
Currently identifying stakeholders; want their input!
DRAFT Plan to include stakeholders:
• Send to stakeholders by August 30
• Ask if they plan to attend meeting in-person in November
• Determine schedule for meeting with them based on how many attending in person
• Each stakeholder should have 5 – 10 minutes to introduce themselves, their company or organization and to explain their interest in Internet Vehicle Sales
• Then working group and stakeholders will discuss prepared topics and questions in roundtable format
Identified about 20 stakeholders that fall within these high-level areas.
Vehicle Sales Interests
Dealer Business Support Companies
Associations
Advertising Companies
Government Regulators
We would like to hear ideas from jurisdictions, industry and other stakeholders!
What are some success you have experienced?
Some challenges you have experienced?
What are some of your issues and concerns?
What information can you provide to the Working Group?
Do you have additional feedback?
Contact Information:
David Silk
Cathie Curtis
Top Related