HLS 14RS-1454 ORIGINAL
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Regular Session, 2014
HOUSE BILL NO. 770
BY REPRESENTATIVE PRICE
MOTOR VEHICLES: Provides relative to the Used Motor Vehicle Commission
AN ACT1
To amend and reenact R.S. 32:781(13)(a)(i) and 792(B)(1)(d), to enact R.S. 32:796, and to2
repeal R.S. 32:795, relative to used motor vehicle dealers; to amend the definition3
of "used motor vehicle"; to provide for a nonexclusive listing of false, misleading,4
or unsubstantiated advertising in connection with his used motor vehicle dealers'5
business; to provide relative to the deposit and down payment disclosure and6
delivery pending a sale by a used motor vehicle; and to provide for related matters.7
Be it enacted by the Legislature of Louisiana:8
Section 1. R.S. 32:781(13)(a)(i) and 792(B)(1)(d) are hereby amended and reenacted9
and R.S. 32:796 is hereby enacted to read as follows:10
§781. Definitions11
As used in this Chapter:12
* * *13
(13)(a)(i) "Used motor vehicle dealer" means any person, partnership,14
corporation, limited liability company, or other entity who, for a commission or with15
intent to make a profit or gain of money or other thing of value, buys, sells, brokers,16
exchanges, rents with option to purchase, auctions at retail or public, offers, or17
attempts to negotiate a sale or exchange of an interest in used motor vehicles and18
who is engaged wholly or in part in the business of buying and selling used motor19
vehicles, whether such motor vehicles are owned by such person and whether the20 HLS 14RS-1454 ORIGINAL
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motor vehicles are sold from a dealership location or via any form of advertising,1
including but not limited to the Internet. A person shall be presumed to be engaged2
in the business of selling used motor vehicles if he sells five or more used motor3
vehicles in any twelve-month period which vehicles are not registered to and insured4
by members of the individual's household, immediate family members, or legal5
entities which the individual has an ownership interest in or is employed by. An6
entity shall be presumed to be engaged in the business of selling used motor vehicles7
if the entity sells five or more used motor vehicles which are not registered to and8
insured by the entity or by an entity affiliated with the entity receiving anything of9
value.10
* * *11
§792. Denial, revocation, or suspension of license; grounds; unauthorized acts12
* * *13
B. The commission may revoke or suspend a license, issue a fine or penalty,14
or enjoin a used motor vehicle dealer, dealer in used parts or used accessories of15
motor vehicles, used motor vehicle auctioneer, or salesperson for any of the16
following conduct:17
(1) A change of condition after the license has been granted resulting in18
failure to maintain the qualifications for licensure, including but not limited to:19
* * *20
(d) Use of false, misleading, or unsubstantiated advertising in connection21
with his business. For the purpose of this Paragraph, the following shall be22
considered false, misleading and unsubstantiated advertising in connection with the23
sale of a used motor vehicle shall include but not be limited to the following:24
(i) Making unsubstantiated claims regarding the dealership, such as being the25
"largest" or "biggest" dealer, or being the "number one dealer" in an area.26
(ii) Advertising that notes will not have to be paid by the customer for a27
certain period of time, unless the dealer can substantiate the delay in payment and28
unless the delay is offered to all customers without restriction or limitation.29 HLS 14RS-1454 ORIGINAL
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(iii) Advertising a loan interest rate without restriction or limitation.1
(iv) Advertising guaranteed credit approval without restriction or limitation.2
(v) Advertising a monthly note without restriction or limitation and without3
reference to an approved credit rating.4
(vi) Advertising a guaranteed amount for trade-ins.5
(vii) The advertised price must be the full cash price for which the vehicle6
will be sold, except for tax, title and license which must be referenced.7
(viii) When the price is advertised, the dealer is required to provide a8
complete and accurate description of the vehicle, including make, model and model9
year of the vehicle.10
(ix) Performing a "bait and switch" in which the dealer does not have the11
vehicles advertised for sale and has not had the vehicles within a reasonable time12
from the advertisement. 13
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§796. Deposit and Down Payment Disclosure and Delivery of Vehicle Pending the15
Sale.16
A. In every transaction between a used motor vehicle dealer and a potential17
purchaser in which the purchaser provides a deposit on a used motor vehicle, the18
used motor vehicle dealer is required to provide a statement that the deposit given19
is on an agreement to purchase, and not an actual sale. The agreement shall clearly20
state that no transaction has actually occurred, and no sales documents have been21
completed. The deposit is merely intended as a hold on a vehicle.22
B. In every transaction between a used motor vehicle dealer and a potential23
purchaser in which the purchaser provides a down payment for the purchase of a24
used motor vehicle, the used motor vehicle dealer is required to provide, either on25
the bill of sale, or by separate agreement, a statement that the sale is conditioned26
upon certain identifiable events, such as financing or obtaining state-mandated27
compulsory automobile insurance.28 HLS 14RS-1454 ORIGINAL
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C. In every transaction between a used motor vehicle dealer and a potential1
purchaser in which the purchaser provides either a down payment or a deposit for the2
purchase of a used motor vehicle, the used motor vehicle dealer is required to3
complete a disclosure statement that contains the following provisions:4
(1) The amount of the deposit or down payment.5
(2) Whether the money given is either a deposit or a down payment, and6
shall include a notice that either party may recede or withdraw from the transaction.7
(3) Clearly state:8
(a) If the customer chooses to withdraw from the transaction the deposit or9
down payment will be forfeited to the used motor vehicle dealer.10
(b) If the used motor vehicle dealer who chooses to withdraw, the dealer11
must return the deposit or down payment.12
(c) The failure to perform under the terms of the agreement including but not13
limited to the dealer's failure to provide a vehicle fit for its intended purpose shall be14
treated as the same as the dealer withdrawing.15
(d) The inability of the potential purchaser to secure financing or to obtain16
state-mandated compulsory automobile insurance shall be treated as the same as the17
customer withdrawing.18
(4) A time limit in which to complete the transaction not to exceed twenty19
days.20
(5) A complete description of the motor vehicle to be sold including the21
make, model, year, and any identification and serial numbers of the motor vehicle.22
(6) The purchase price of a trade-in the vehicle including the make, model,23
year and identification and serial number of the vehicle and its condition.24
(7) The price allowed for any trade-in.25
D. If the dealer allows the customer to take delivery on a vehicle which is26
the subject of either a deposit or a down payment, a pre-delivery sale disclosure27
statement from the dealer and the customer shall include the following:28 HLS 14RS-1454 ORIGINAL
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(1) A condition report which clearly identifies any noticeable damage to the1
vehicle before it is released to the customer.2
(2) A statement that if the dealer withdraws from the agreement to purchase,3
the customer will be responsible only for damages beyond normal wear and tear4
occurring during the customer's use of the vehicle which may be deducted from the5
deposit or down payment.6
(3) A statement that if the customer withdraws from the agreement to7
purchase, the customer shall be responsible not only for damages occurring during8
the customer's use of the vehicle but also for usage of the vehicle at a day rate not to9
exceed thirty-five cents per mile, which may be deducted from the deposit or down10
payment. 11
(4) A statement that if the customer either withdraws from the agreement to12
purchase or fails to return the vehicle at the expiration of the term of agreement, the13
dealer may seek repossession of the vehicle by any lawful means.14
(5) A statement that if the dealer withdraws from the agreement to purchase15
that the dealer must give written notice, by certified or registered mail, to the16
customer at least five days prior to taking repossession of the vehicle which may be17
done by any lawful means, and only upon return of the deposit in accordance with18
Subsection (C) of this Section.19
E. It shall be unlawful and constitute a violation of this Chapter for any used20
motor vehicle dealer to fail to follow any of the provisions of this Section.21
* * *22
Section 2. R.S. 32:795 is hereby repealed in its entirety.23
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Price HB No. 770
Abstract: Provides relative to the business practices of used motor vehicle dealers. HLS 14RS-1454 ORIGINAL
HB NO. 770
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are additions.
Present law provides that a "used motor vehicle dealer" means any person, partnership,
corporation, limited liability company, or other entity who, for a commission or with intent
to make a profit or gain of money or other thing of value, buys, sells, brokers, exchanges,
rents with option to purchase, auctions, offers, or attempts to negotiate a sale or exchange
of an interest in used motor vehicles and who is engaged wholly or in part in the business
of buying and selling used motor vehicles, whether such motor vehicles are owned by such
person and whether the motor vehicles are sold from a dealership location or via any form
of advertising, including but not limited to the Internet.
Proposed law provides that auction shall be a retail or public.
Present law provides that the used motor vehicle commission may revoke or suspend a
license, issue a fine or penalty, or enjoin a used motor vehicle dealer, dealer in used parts or
used accessories of motor vehicles, used motor vehicle auctioneer, or salesperson for a
change of condition after the license has been granted resulting in failure to maintain the
qualifications for licensure, including but not limited to the use of false, misleading, or
unsubstantiated advertising in connection with his business.
Proposed law adds a nonexclusive list of what shall be considered of false, misleading, or
unsubstantiated advertising in connection with his business.
Present law provides that every used motor vehicle dealer who accepts a deposit or a down
payment from a consumer shall provide the consumer with a purchase agreement statement
containing the following:
(1)A complete description of the motor vehicle subject to the purchase agreement,
including the make, model, year, and vehicle identification number.
(2) The purchase price of the vehicle.
(3)The amount of the deposit or down payment.
(4)A statement identifying whether the funds received by the dealer are for deposit or
down payment.
(5)Any conditions necessary to complete the sale.
Proposed law repeals present law.
Present law provides that every used motor vehicle dealer who accepts a deposit or down
payment for a purchase agreement conditioned upon the consumer's ability to obtain
financing of the remainder of the purchase price shall return the deposit or down payment
upon a determination that the consumer does not qualify for financing. If no determination
is made regarding financing within 20 days of the receipt of the deposit or down payment,
the deposit or down payment shall be returned to the consumer at the end of the 20 day
period.
Proposed law repeals present law.
Proposed law provides that in every transaction between a used motor vehicle dealer and
a potential purchaser in which the purchaser provides a deposit on a used motor vehicle, the
used motor vehicle dealer is required to provide a statement that the deposit given is on an
agreement to purchase, and not an actual sale. The agreement shall clearly state that no
transaction has actually occurred, and no sales documents have been completed. The deposit
is merely intended as a hold on a vehicle.
Proposed law provides that in every transaction between a used motor vehicle dealer and a
potential purchaser in which the purchaser provides a down payment for the purchase of a HLS 14RS-1454 ORIGINAL
HB NO. 770
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used motor vehicle, the used motor vehicle dealer is required to provide, either on the bill
of sale, or by separate agreement, a statement that the sale is conditioned upon certain
identifiable events, such as financing or obtaining state-mandated compulsory automobile
insurance.
Proposed law provides that in every transaction between a used motor vehicle dealer and a
potential purchaser in which the purchaser provides either a down payment or a deposit for
the purchase of a used motor vehicle, the used motor vehicle dealer is required to complete
a disclosure statement that contains the following provisions:
(1)The amount of the deposit or down payment.
(2)Whether the money given is either a deposit or a down payment, and shall include
a notice that either party may recede or withdraw from the transaction.
(3)Clearly state:
(a)If the customer chooses to withdraw from the transaction the deposit or down
payment will be forfeited to the used motor vehicle dealer.
(b)If the used motor vehicle dealer who chooses to withdraw, the dealer must
return the deposit or down payment.
(c)The failure to perform under the terms of the agreement including but not
limited to the dealer's failure to provide a vehicle fit for its intended purpose
shall be treated as the same as the dealer withdrawing.
(d)The inability of the potential purchaser to secure financing or to obtain
state-mandated compulsory automobile insurance shall be treated as the same
as the customer withdrawing.
(4)A time limit in which to complete the transaction not to exceed twenty days.
(5)A complete description of the motor vehicle to be sold including the make, model,
year, and any identification and serial numbers of the motor vehicle.
(6)The purchase price of a trade-in the vehicle including the make, model, year and
identification and serial number of the vehicle and its condition.
(7)The price allowed for any trade-in.
Proposed law provides that if the dealer allows the customer to take delivery on a vehicle
which is the subject of either a deposit or a down payment, a pre-delivery sale disclosure
statement from the dealer and the customer must include the following:
(1)A condition report which clearly identifies any noticeable damage to the vehicle
before it is released to the customer.
(2)A statement that if the dealer withdraws from the agreement to purchase, the
customer will be responsible only for damages beyond normal wear and tear
occurring during the customer's use of the vehicle which may be deducted from the
deposit or down payment.
(3)A statement that if the customer withdraws from the agreement to purchase, the
customer shall be responsible not only for damages occurring during the customer's
use of the vehicle but also for usage of the vehicle at a day rate not to exceed thirty-
five cents per mile, which may be deducted from the deposit or down payment. HLS 14RS-1454 ORIGINAL
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(4)A statement that if the customer either withdraws from the agreement to purchase or
fails to return the vehicle at the expiration of the term of agreement, the dealer may
seek repossession of the vehicle by any lawful means.
(5)A statement that if the dealer withdraws from the agreement to purchase that the
dealer must give written notice, by certified or registered mail, to the customer at
least five days prior to taking repossession of the vehicle which may be done by any
lawful means, and only upon return of the deposit in accordance with Subsection (C)
of this Section.
(Amends R.S. 32:781(13)(a)(i) and 792(B)(1)(d); Adds R.S. 32:796; Repeals R.S. 32:795)