Who Regulates Car Dealers?

Categories: Defective Products

Who regulates dealers?

If you visit a car dealership in California or another state, you might wonder who regulates car dealers. In California, you will see white stickers on the window of every car for sale. State and federal regulations for car dealers stipulate that on the sticker there must be information about the suggested retail price, information about the warranty, optional equipment, miles per gallon, crash safety ratings and much more. Car dealership regulations require this information to be displayed so that the buyer can make a better decision about their purchase.

There are federal laws that regulate car dealers in California and across the U.S. One of the federal rules is Title 15 of the U.S. Code that states that each vehicle must have the above information displayed. If a dealer removes that information before the car is sold, there can be fines and even prison time.

That is not the only regulation that applies to car dealers. Each state also has a lemon law that allows the consumer to get a refund or vehicle exchange if the new or used car under warranty cannot be repaired properly after several attempts. California has a tough lemon law that requires car dealers to make every effort to repair defective cars under the original manufacturer’s warranty.

Some of the other state entities that regulate car dealers are:

The Department of Motor Vehicles

In California, there are more than 30 million cars registered with the DMV, and all other states have the equivalent of the DMV, too. As DMVs have gotten larger over the decades, their responsibilities have grown. Today, the DMV does not simply register new cars and provide driver’s licenses. Today, the DMV in all states regulates car dealers.

In California, the DMV has a strict protocol set up for any entity that wants to operate a car dealership. To become a dealer in this state, you must do the following:

  • Pass criminal background checks
  • Take car dealership and sales courses and pass a test
  • Get a surety bond of $50,000
  • Fully comply with all requirements for the use of the car dealership, such as signage, display lot requirements and front office rules
  • Have an inspection performed by an officer from the DMV.

The California DMV also requires that all auto salespeople be licensed. Under car dealer regulations for the state, an automotive salesperson is a person who leases or sells vehicles for a dealer. All salespeople in California and other states need to pass a background check to ensure they were not convicted of any crimes or improper conduct related to their work in car dealerships.

New Motor Vehicle Board

The NMVB in California is part of the DMV, and it has two major functions that relate to auto dealerships:

  • Attempts to resolve any disputes between car manufacturers and dealerships
  • Attempts to resolve disputes between California consumers and dealerships or manufacturers.

Department of Consumer Affairs

In California, the Department of Consumer Affairs, or DCA, regulates car dealers via the Arbitration Certification Program. If you think you have bought a lemon vehicle in the state, you can make a claim to this agency. It is a free process, and you do not need a lawyer.

Have Questions on Who Regulates Car Dealers? Talk to Neale & Fhima Today.

There are many regulations for car dealers in California and all other states that are designed to protect consumers from unscrupulous business owners in the industry. If you believe that you have been taken advantage of in any way by a car dealership, the attorneys at Neale & Fhima can perform a no-cost review of your auto sales dispute.  Please contact us today.