Running a car dealership can be a rewarding and lucrative career. But there’s a lot to know about running a dealership.
The fact is, there’s a lot of laws and regulations around owning a car dealership. A lot of these may not be well known, but they have to be adhered to. If they aren’t, you could face legal trouble.
What are the car dealership regulations and laws that you need to be aware of? Let’s take a look at what you need to know, so you can make sure you’re running your auto business properly.
Car Dealership Regulations and Laws
In addition to the normal laws all businesses must follow, there are several laws that uniquely apply to car dealerships. What are these dealership laws?
One example is the Magnuson-Moss Warranty Act. This law requires consumer product manufacturers and sellers to be upfront regarding the information and details of customer warranties.
For example, you are required to state if the warranty is full or partial. You also have to keep documentation of the exact contents and details of your warranty options.
Then there’s the Used Car Rule, which requires auto dealerships to clearly display, via a window sticker, any details of warranty coverage. This includes terms and conditions, and the extent of repair costs covered by the warranty.
You’re also required to display certain disclaimers. For example, you must mention if a pre-purchase inspection of the vehicle is permitted. Failure to comply with this regulation can be punished with up to $16,000 in fines per violation.
You’ll also be required to comply with several different laws regarding credit and leasing. For example, Regulation Z, also known as the Truth in Lending Act, establishes specific terminology and style guidelines that must be followed with regards to loans.
Things like the Equal Credit Opportunity Act, the Fair Credit Reporting Act, and other credit regulations will also affect you. Most of these laws come with steep fines as penalty for noncompliance.
These are just scratching the surface of the different laws your dealership needs to abide by. It can be a lot for any single person to keep track of.
If you’re a dealership owner, it’s a good idea to hire a lawyer who is well versed in car dealership law. They can help you manage the different laws you must adhere to, and make sure you’re doing so correctly.
Understand Dealership Laws and Regulations
Like any business, it’s important to understand the laws that govern auto dealers. Car dealership regulations are extensive, and include both generic business laws as well as industry specific regulation.
Hopefully, this helped to clear up some questions you may have had regarding legal regulations for car dealerships.
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