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Dealerships have to comply with state, federal regulations

On Behalf of | Feb 2, 2021 | Auto Dealership Law |

One of the most difficult aspects of owning a large dealership, or network of dealerships, in Orange County or elsewhere is having to follow all the laws and regulations that cover motor vehicle sales.

Auto dealers have to follow a number of federal and California laws. Additionally, they also may be subject to additional rules and responsibilities based on contracts they have with car manufacturers or others.

Not understanding or not following these rules, even because of an honest mistake, can cost an auto dealer in terms of fines and loss of business opportunities. Slips in the area of legal compliance can also lead to costly litigation.

Some laws and regulations apply specifically to the sale of autos

Some rules pertain directly to the sale of automobiles.

For example, the Federal Trade Commission’s so-called Used Car Rule requires a dealership to post information when selling a used car. This decal, called a Buyers Guide, has to set out with clear detail the terms of any warranty the dealership is offering to the buyer.

While these decals have become commonplace, dealerships still need to be careful that they follow these laws by, for example, making sure that the information on the decal is accurate.

Other laws and regulations may also impact a dealer’s operations

Moreover, like other businesses, automobile dealerships have to follow many other laws. For examples, disputes about employment are fairly common, so a dealership will want to be sure that they have followed all federal and California law covering items like anti-discrimination, wage payments and the like.

Dealers who offer financing for their customers may also have to require with what is commonly referred to as Regulation Z or the Truth in Lending regulation.

Many of these laws and regulations are complicated enough to the point where having the advice of a law firm experienced in the nuances of auto dealership laws. This experience is particularly important should an alleged violation lead to litigation.




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