- Location: Utah
Dealer-related Information in Utah
Motor vehicle dealerships are governed by the Motor Vehicle Enforcement Division (MVED) of the Utah State Tax Commission, which (as you might expect from a tax agency) has very complex rules and processes. The vehicle sales industry does, unfortunately, attract the occasional fraudulent dealer―a fact which forces the MVED to regulate all dealerships very closely. In turn, this means that running a dealership requires a lot of paperwork. Everything needs to be carefully documented.
If you sell cars, trucks, trailers, motorcycles, or other types of motor vehicles, you are expected to know all the ins and outs of the legislation surrounding this industry. We have provided some detailed information and links that will help you navigate the system and run a successful dealership that remains on good terms with the Utah State Tax Commission and the MVED.
Dealer license: Generally, you need a dealer's license if you sell three or more motor vehicles a year. You do not need a license to sell only those vehicles you've owned for 12 months or more.
A dealer's license for new motor vehicles allows you to sell and dismantle new and used vehicles (including trailers weighing more than 2,000 pounds when empty), and to run a body shop. A dealer's license for used motor vehicles limits your dealings to used vehicles. The same two types of licenses are also available for those dealing with new or used motorcycles, snowmobiles, off-highway vehicles, and small trailers (those weighing 750-1,999 pounds when empty).
You must post your license certificate at the dealership and carry your license card with you when on the job or driving one of the vehicles. No matter when you receive your license, it expires every year at midnight on June 30. Unfortunately, your licensing fees will not be prorated for licensing periods shorter than one year.
Records: Make lots of room in the dealership office, because you need to document everything that goes on at your dealership and hang onto these records for five years. Show them to any MVED employee or police officer who asks to see them.RECORDS YOU NEED TO KEEP
- A record of every vehicle bought or exchanged, or received or accepted for sale or exchange
- A record of every used part or used accessory bought or acquired
- A record of every motor vehicle bought or acquired and wrecked or dismantled
- All buyers' orders, contracts, odometer statements, temporary permit records, financing records, and all other documents related to the purchase, sale, or consignment of motor vehicles
- A record of the name and address of the person to whom any motor vehicle or motor vehicle body, chassis, or engine is sold or disposed of, and a description of the vehicle by year, make, and vehicle identification number (VIN)
Trade-ins: If you accept a trade-in from a customer who still owes on the loan for the vehicle, you must notify the lienholder in writing within seven days that the vehicle has been traded in. Furthermore, you must pay off the loan to the lienholder within 21 calendar days of the sale date or 15 calendar days from the date you were paid in full for the vehicle you sold (whichever is sooner).
If the sale falls through within 21 days, you have five days to notify the lienholder in writing that the sale has been rescinded, and you must return the trade-in vehicle to the customer.
Third-party warranties: You have 15 days from the date you sell a third-party warranty or service contract to a customer to pay the warranty or service contract company. You must make sure the warranty or service contract goes into effect within 15 days of the sale. If you fail to pay the warranty or service contract company within 15 days, you could be liable to the customer for any damages that would have been covered, and you risk having your dealer's license suspended.
Salvage vehicles: A salvage vehicle is one that was so badly damaged due to an accident, flood, or other event that it would cost more to repair the vehicle than the vehicle is worth. A salvage vehicle that has been repaired so that it operates normally is considered a rebuilt/restored vehicle.
Before a dealer can negotiate the sale of a salvage or rebuilt/restored vehicle, he must notify both the customer and the prospective lienholder of the vehicle's status using Form TC-814 (available from the MVED, not online). This form must also be prominently displayed in the bottom of the passenger-side windshield when the vehicle is displayed for sale.
DETAILED INFORMATION FOR DEALERS
Safety inspections: The vehicle must pass the Utah safety inspection before you can issue the buyer a temporary license for it. In some counties, an emissions test is also required. This means either the dealer must have the vehicle inspected prior to sale (and perform any repairs necessary to pass the inspection), or the dealer must sell the car "as is" without issuing the buyer a temporary permit.
Registration and title: Within 30 days of selling a vehicle to a Utah resident and issuing a temporary permit, the dealer must obtain the registration and license plates from the Division of Motor Vehicles (DMV) and supply these to the new owner (the time frame is reduced to 21 days when selling to another dealer). If you sell a vehicle without issuing a temporary permit, you have 48 hours to deliver the title. Questions about this process can be answered by:
- Division of Motor Vehicles
- 210 N. 1950 W.
- Salt Lake City, UT 84134
- (801) 297-7780
Monthly dealer report of sales: When you issue a temporary permit for a sold vehicle and complete the registration paperwork for the customer, the sale is reported on the title application. However, if you sell a vehicle without issuing a temporary permit, you will report the sale by submitting a Motor Vehicle Dealer Monthly Report of Sales.
Permits and plates: In addition to the temporary permits that the dealer provides the buyer, the MVED issues the following permits for unregistered vehicles:
- Extension permits, for when a temporary permit expires before the dealer has registered the vehicle
- Nonresident permits, for those who buy a vehicle in Utah for registration in another state
- Loaded demonstration permits entitle the dealer to use a dealer plate to demonstrate an unregistered loaded vehicle to a customer.
- In-transit permits allow dealers 96 hours to transport unregistered vehicles on Utah highways.
- Dismantling permits, for dismantling a vehicle or taking it to a licensed dismantler, crusher, or salvage dealer
The MVED issues the following types of license plates:
- Dealer plates, for transporting unlicensed vehicles owned or consigned by the dealer on public highways. Dealer plates may not be placed on vehicles you have sold or leased, nor may they be used on relatives' cars. They may be used only by dealers on vehicles that belong to the dealership. Dealer plates expire every year on June 30, just like dealer licenses, and must be renewed annually. If the dealership sold less than three vehicles in the previous year, the dealer plates will not be renewed.
- Dismantler plates
- Manufacturer plates
- Transporter plates
Advertising: Utah has laws that strictly govern how dealerships may advertise, and there are serious penalties for violations. Read the summary of regulations.
Odometers, mileage, and disclosure: Every vehicle to be registered in Utah must have a properly functioning odometer. It's illegal to drive a car whose odometer is broken except to take the vehicle to a repair shop. It's also illegal to install a device that alters the true odometer reading or to sell a car with such a device installed―or to issue a false odometer statement or to tamper with a vehicle's odometer in any way.
Dealers are required by law to provide the buyer with a signed Odometer Disclosure Statement. If the odometer was repaired or replaced, this should be reflected in the disclosure statement, and the vehicle must have a decal to this effect (available from the MVED) permanently adhered to the driver's side door frame.
Lemon Law: According to Utah's Lemon Law, customers who buy or lease a new car or RV that has significant flaws that can't be fixed are entitled to a refund or replacement from the manufacturer. Read the legal details.