It is
imperative that you operate your new business with
complete integrity and the highest ethical standards at
all times. You must follow every State and Federal
guideline on every transaction, PERIOD!
If you
don’t operate strictly under all State and Federal
regulations, your Texas dealer’s license could result in
suspension or revocation. Once you have had a dealer’s
license revoked, it is time consuming and may be costly
(legal fees for legal representation, if applicable) in
order to obtain another dealer license.
Being
completely honest with every one of your customers is a
win-win situation. You will build your reputation your
first few weeks in business and you must build an
ethical reputation. A good, positive selling experience
with a customer will lead to more sales to the
customer’s friends, their co- workers, and their family.
A bad, negative selling experience will result in
customers leaving negative reviews of your dealership
all over the internet. It is very easy for your customer
to leave negative reviews and comments on Google,
Facebook, Twitter, and more. When future customers see
these reviews, they will not purchase vehicles from you.
CUSTOMERS WANT A DEALER THEY CAN TRUST!
To
maintain your honest reputation, you must offer full
disclosure on all vehicles before the sale. Always
disclose every minor mechanical malfunction that you are
aware of before the test drive. By disclosing everything
you know about a vehicle before the test drive you will
build an incredible reputation in your area.
Unethical dealers can never discard a dishonest
reputation.
By
operating your dealership with complete honesty and the
highest ethical standards at all times, you will gain an
honest reputation that will lead you to many more sales
than that of a dishonest dealer.
Being
completely honest with your customers is a win-win
situation. You will have the best reputation in your
area, you will have the highest profits, and you will be
in business for many, many years.
OPERATING YOUR DEALERSHIP WITH COMPLETE INTEGRITY AND
100 PERCENT COMPLIANCE EQUALS MORE PROFITS WHILE
ENSURING YOUR DEALER LICENSE WILL NEVER BE SUSPENDED OR
REVOKED.
When
you are granted a dealer’s license the state of Texas is
giving you an opportunity to enter a business field that
can be quite lucrative, however, you MUST follow several
sets of rules and guidelines.
All Texas
motor vehicle dealers must follow the laws we discuss in
this course and the TXDMV has zero tolerance for any
dealer that does not follow the rules. Any dealer that
does not comply, or follow, the rules can have their
dealer’s license suspended, revoked and pay extensive
fines.
Reasons for License Suspension or
Revocation of a Texas Motor Vehicle Dealer’s License: if
you are following along in your training manual you can
read these with me.
• Falsifying or forging
documents.
• Filing a false or forged document.
• Keeping Open Titles.
• Not assigning titles.
•
Misuse of plates or tags.
• Making Material
Misrepresentations on Applications.
• Failing to
maintain qualifications for GDN.
• The
department shall cancel a dealer’s GDN if the dealer
obtains the number by submitting false or misleading
information
• Refusal to provide evidence of being in
business.
• Not Remaining Regularly and Actively
Engaged in the Business.
• Failing to Report or Pay
Taxes.
• Misuse of license.
• Off-site Sales,
Curbstoning.
• Failure to apply for title within 30
working days of the date of sale. or 45 days if offering
financing, or 60 days if sold to a military purchaser.
• Giving the title work to the customer.
•
Incomplete or No Records.
• Not responding to
request for records.
• Forgery or Fraud.
• Spot
Deliveries.
• Dehorsing.
• Parking on the
Right-of-Way.
• Failing to Settle Civil Penalties.
• Odometer Tampering.
• Does not maintain established
place of business
• Uses false or deceptive
advertising
• Failed to notify TxDMV MVD of license
entity changes within 10 days
• Fails to
maintain $50,000 dealer surety bond for entire licensure
period
Failure To File Annual Vehicle Inventory
Tax
Failure To File Monthly Tax
Failure To Sell 5
Vehicles Per Year
Premises Violations, Including Bond
Violations
Filing False Tax Statements When
Transferring Title (Example: Dealers Sells A Vehicle To
A Consumer For $4,000 But When Doing The Title Transfer
Says That He Sold The Vehicle For $2,000 that is a big,
big no no
Reasons for Denial of a Texas Motor
Vehicle Dealers License Application
• False
statement of material facts in application
• Criminal
History Specified in Texas Administrative Code §211.3
• Criminal History Specified in Texas Occupations Code
§53.021
• Has no established place of business
•
Does not have working telephone
• Does not have
display lot/area
• Display Lot is Not Physically
Separated from All Other Businesses’ Parking
•
Business is not physically separate from another
business
DEALERS MUST FOLLOW EVERY LAW, RULE, AND
GUIDELINE IN ORDER TO OPERATE A SUCCESSFUL AND
PROFITABLE DEALERSHIP. ANY DEALER THAT DOES NOT OPERATE
COMPLETELY WITHIN THE LAW WILL FACE FINES AND/OR A
LICENSE SUSPENSION OR REVOCATION.
The TxDMV has what is known as
the Motor Vehicle Dealer Fine Matrix. The fines for
certain violations of State law are set in the Matrix
and written into the Texas Occupational Code and the
Texas Administrative Code.
Here you see the
TxDMV Motor Vehicle Dealer Fine Matrix
As you can see
if you willfully defraud a customer the fine starts at
$1000 and can lead to revocation of the license
Falsification or forgery of tax documents starts at a
1000 fine and can lead to revocation, and the federal
fines for this could be much more, so be advised we are
looking at the State sanctions here, which would be in
addition to any Federal penalties
Lets look at some
more here, misrepresenting mileage starts at 2000
dollars and leads to revocation, federal penalties could
also include prison time for odometer crimes
False
VIT statements start at 1000 dollars and can lead to
revocation
Lets look at some more violations
here, allowing someone to used your GDN, allowing
someone to use your dealer license carries fines of 500
to 4000, you can never let unlicensed persons act as a
dealer with your dealer license
Take a look at this
one towards the bottom, acting as a manufacturer or
distributor will lead to fines that START at 5000 and
can lead to charges being filed by the Attorney General,
these are some serious violations
Take a look at
a couple more here, violation of the Blue law can lead
to fines up to 2000, selling or leasing a vehicle that
does not meet emissions can lead to fines of up to 4000
dollars, overcharging documentary fees can lead to fines
of up to 2000, we will show you how to comply with
documentary fee laws later in the course so you will
never over charge
If you follow every rule, law,
and guideline required for your business you will never
pay any fines and you will always keep your license.
Remember 100 percent compliance equals100 percent
profits,
TxDMV Enforcement Division
Texas
laws are enforced by the Texas Department of Motor
Vehicles Enforcement Division and they receive about
12,000 complaints a year, they investigate lemon law
violations and also respond to dealer complaints. The
Enforcement Division receives approximately 12,000
complaints per year. Enforcement investigators make
contact with licensees and complainants to collect
information based on complaints received. Investigators
also assist law enforcement by training officers and
other agents on rules and regulations that apply to
licensees.
The Enforcement Division is made of
five sections under the direction of a single director
who reports to the TxDMV Executive Director.
The
five sections are:
Administrative, Legal, Lemon Law,
Motor Vehicle Investigations, and Motor Carrier
Investigations.
The Legal section employs attorneys
that review investigations and, if needed, prosecute
violations.
Administrations supports the other
sections with the functions of Human Resources,
Purchasing, and Accounting
The Lemon Law section
administers the Texas Lemon Law and Warranty compliance
programs that mainly affect franchised dealers that sell
new motor vehicles.
Motor Vehicle Investigations, and
Motor Carrier Investigations are carried out as well.
Dealer Complaints
The TxDMV makes it very
easy to log a complaint against any Texas motor vehicle
dealer, they have several phone numbers, email address,
and the online dealer complaint form they can complete
at the following website:
https://txdmv.secure.force.com/Complaint/
As
you can see it is very easy for customers to log a
complaint against your dealership using this online form
Texas state laws are called statutes and if you ever
want to read a statute, which is Texas law, you can go
to google, or whatever search engine you use, and type
in Texas Statute, then click on Texas Statutes
Then you can scroll down and click on the category you
are interested in to read how the law applies to that
category