HLS 14RS-1454 ENGROSSED
Page 1 of 9
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
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(5) and (13)(a)(i), to enact R.S. 32:792(B)(17) and 796,2
and to repeal R.S. 32:792(B)(1)(d) and 795, relative to used motor vehicle dealers;3
to amend the definitions of motor vehicle and used motor vehicle dealer; to provide4
relative to false, misleading, or unsubstantiated advertising in connection with a used5
motor vehicle dealer business; to provide relative to the deposit and down payment6
disclosure and delivery pending a sale by a used motor vehicle dealer; and to provide7
for related matters.8
Be it enacted by the Legislature of Louisiana:9
Section 1. R.S. 32:781(5) and (13)(a)(i) and 792(B)(1)(d) are hereby amended and10
reenacted and R.S. 32:792(B)(17) and 796 are hereby enacted to read as follows:11
§781. Definitions12
As used in this Chapter:13
* * *14
(5) "Motor vehicle" means any motor-driven car, van, or truck required to15
be registered pursuant to the Vehicle Registration License Tax Law, R.S. 47:451 et16
seq., or any vehicle manufactured for off-road use and issued a manufacturer's17
statement or certificate of origin, as required by the Louisiana Motor Vehicle18
Commission, that cannot be issued a registration certificate and license to operate on19
the public roads of this state because, at the time of manufacture, the vehicle does not20 HLS 14RS-1454 ENGROSSED
HB NO. 770
Page 2 of 9
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
meet the safety requirements prescribed by R.S. 32:1301 through 1310 which is used1
or is designed to be used, for the transporting of passengers or goods for public,2
private, commercial, or for-hire purposes and, including but not limited to motor3
homes, motorcycles, all-terrain vehicles, recreational vehicles, travel trailers, boat4
trailers, ambulances, buses, fire trucks, conversion vehicles, wreckers, semitrailers,5
hearses, and marine products, as any of the terms are defined in R.S. 32:1252.6
* * *7
(13)(a)(i) "Used motor vehicle dealer" means any person, partnership,8
corporation, limited liability company, or other entity who, for a commission or with9
intent to make a profit or gain of money or other thing of value, buys, sells, brokers,10
exchanges, rents with option to purchase, auctions at retail or public, offers, or11
attempts to negotiate a sale or exchange of an interest in used motor vehicles and12
who is engaged wholly or in part in the business of buying and selling used motor13
vehicles, whether such motor vehicles are owned by such person and whether the14
motor vehicles are sold from a dealership location or via any form of advertising,15
including but not limited to the Internet. A person shall be presumed to be engaged16
in the business of selling used motor vehicles if he sells five or more used motor17
vehicles in any twelve-month period which vehicles are not registered to and insured18
by members of the individual's household, immediate family members, or legal19
entities which the individual has an ownership interest in or is employed by. An20
entity shall be presumed to be engaged in the business of selling used motor vehicles21
if the entity sells five or more used motor vehicles which are not registered to and22
insured by the entity or by an entity affiliated with the entity receiving anything of23
value.24
* * *25
§792. Denial, revocation, or suspension of license; grounds; unauthorized acts26
* * *27
B. The commission may revoke or suspend a license, issue a fine or penalty,28
or enjoin a used motor vehicle dealer, dealer in used parts or used accessories of29 HLS 14RS-1454 ENGROSSED
HB NO. 770
Page 3 of 9
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
motor vehicles, used motor vehicle auctioneer, or salesperson for any of the1
following conduct:2
* * *3
(17) Use of false, misleading or unsubstantiated advertising in connection4
with his business. For the purpose of this Paragraph, false, misleading and5
unsubstantiated advertising in connection with the sale of a used motor vehicle shall6
include but not be limited to the following:7
(a) Making unsubstantiated claims regarding the dealership, such as being8
the "largest" or "biggest" dealer, or being the "number one dealer" in an area.9
(b) Advertising that notes will not have to be paid by the customer for a10
certain period of time, unless the dealer can substantiate the delay in payment and11
unless the delay is offered to all customers without restriction or limitation.12
(c) Advertising a loan interest rate without including all restrictions or13
limitations in the same size lettering.14
(d) Advertising guaranteed credit approval without including all restrictions15
or limitations and any required credit rating in the same size lettering.16
(e) Advertising a monthly note without restriction or limitation and without17
reference to an approved credit rating in the same size lettering.18
(f) Advertising a guaranteed amount for trade-ins.19
(g) Advertising a price other than the full cash price for which the vehicle20
will be sold, except for tax, title, and license which must be referenced.21
(h) Advertising a price without providing a complete and accurate22
description of the vehicle, including make, model and model year and any23
identification and serial number of the vehicle.24
(i) Performing a "bait and switch" in which the dealer does not have the25
vehicle advertised for sale and has not had the vehicle within a reasonable time from26
the advertisement.27
* * *28 HLS 14RS-1454 ENGROSSED
HB NO. 770
Page 4 of 9
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
§796. Deposit and Down Payment Disclosure and Delivery of Vehicle Pending the1
Sale.2
A. In every transaction between a used motor vehicle dealer and a customer3
in which the customer provides a deposit on a used motor vehicle, the used motor4
vehicle dealer is required to provide a statement that the deposit given is on an5
agreement to purchase, and not an actual sale. The agreement shall clearly state that6
no transaction has actually occurred, and no sales documents have been completed.7
The deposit is merely intended as a hold on a vehicle.8
B. In every transaction between a used motor vehicle dealer and a customer9
in which the customer provides a down payment for the purchase of a used motor10
vehicle, the used motor vehicle dealer is required to provide, either on the bill of11
sale, or by separate agreement, a statement that the sale is conditioned upon certain12
identifiable events, such as financing or obtaining state-mandated compulsory13
automobile insurance.14
C. In every transaction between a used motor vehicle dealer and a customer15
in which the customer provides either a down payment or a deposit for the purchase16
of a used motor vehicle, the used motor vehicle dealer is required to abide by the17
following provisions and shall complete a disclosure statement that contains the18
following provisions:19
(1) The amount of the deposit or down payment.20
(2) Whether the money given is either a deposit or a down payment, and21
shall include a notice that either party may recede or withdraw from the transaction.22
(3) Clear statements that:23
(a) If the customer chooses to withdraw from the transaction the deposit or24
down payment will be forfeited to the used motor vehicle dealer.25
(b) If the used motor vehicle dealer chooses to withdraw from the26
transaction, the dealer shall return the deposit or down payment.27 HLS 14RS-1454 ENGROSSED
HB NO. 770
Page 5 of 9
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
(c) The failure to perform under the terms of the agreement including but not1
limited to the dealer's failure to provide a vehicle fit for its intended purpose shall be2
treated as the same as the dealer withdrawing.3
(d) The inability of the customer to secure financing or to obtain4
state-mandated compulsory automobile insurance, if the customer failed to provide5
accurate or complete information necessary to obtain financing or insurance or6
regarding the customer's ability to obtain credit or insurance, shall be treated the7
same as the customer withdrawing.8
(4) A time limit in which to complete the transaction not to exceed twenty9
days.10
(5) A complete description of the motor vehicle to be sold including the11
make, model, year, and any identification and serial numbers.12
(6) The price of the vehicle and a description of the vehicle including the13
make, model, year, identification and serial number and its condition.14
(7) The amount of the trade-in allowance and a description of the trade-in15
vehicle including the make, model, year, identification and serial number and its16
condition.17
D. If the dealer allows the customer to take delivery on a vehicle which is18
the subject of either a deposit or a down payment, a pre-delivery sale disclosure19
statement from the dealer and the customer shall include the following:20
(1) A condition report which clearly identifies any noticeable damage to the21
vehicle before it is released to the customer.22
(2) A statement that if the dealer withdraws from the agreement to purchase,23
the customer will be responsible only for damages beyond normal wear and tear24
occurring during the customer's use of the vehicle which may be deducted from the25
deposit or down payment.26
(3) A statement that if the customer withdraws from the agreement to27
purchase, the customer shall be responsible not only for damages occurring during28
the customer's use of the vehicle but also for usage of the vehicle at a day rate not to29 HLS 14RS-1454 ENGROSSED
HB NO. 770
Page 6 of 9
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
exceed thirty-five cents per mile, which may be deducted from the deposit or down1
payment.2
(4) A statement that if the customer either withdraws from the agreement to3
purchase or fails to return the vehicle at the expiration of the term of agreement, the4
dealer may seek repossession of the vehicle by any lawful means.5
(5) A statement that if the dealer withdraws from the agreement to purchase6
that the dealer must give written notice, by certified or registered mail, to the7
customer at least five days prior to taking repossession of the vehicle which may be8
done by any lawful means, and only upon return of the deposit in accordance with9
Subsection (C) of this Section.10
E. It shall be unlawful and constitute a violation of this Chapter for any used11
motor vehicle dealer to fail to follow any of the provisions of this Section.12
* * *13
Section 2. R.S. 32:792(B)(1)(d) and 795 are hereby repealed in their entirety.14
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.
Present law provides that for purposes of certain laws pertaining to used motor vehicle
dealers, that "motor vehicle" means any motor-driven car, van, or truck required to be
registered pursuant to the Vehicle Registration License Tax Law, which is used or is
designed to be used, for the transporting of passengers or goods for public, private,
commercial, or for-hire purposes and, including motor homes, motorcycles, all-terrain
vehicles, recreational vehicles, travel trailers, boat trailers, ambulances, buses, fire trucks,
conversion vehicles, wreckers, semitrailers, hearses, and marine products, as any of the
terms are defined in certain present law pertaining to motor vehicles.
Proposed law provides that for purposes of certain laws pertaining to used motor vehicle
dealers, that "motor vehicle" also means any vehicle manufactured for off-road use and
issued a manufacturer's statement or certificate of origin, as required by the Louisiana Motor
Vehicle Commission, that cannot be issued a registration certificate and license to operate
on the public roads of this state because, at the time of manufacture, the vehicle does not
meet certain safety requirements, which is used or is designed to be used, for the transporting
of passengers or goods for public, private, commercial, or for-hire purposes.
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 HLS 14RS-1454 ENGROSSED
HB NO. 770
Page 7 of 9
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
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.
Proposed law provides that "motor vehicle" means any motor-driven car, van, or truck
required to be registered pursuant to the Vehicle Registration License Tax Law, R.S. 47:451
et seq., which is used or is designed to be used, for the transporting of passengers or goods
for public, private, commercial, or for-hire purposes, including but not limited to motor
homes, motorcycles, all-terrain vehicles, recreational vehicles, travel trailers, boat trailers,
ambulances, buses, fire trucks, conversion vehicles, wreckers, semitrailers, hearses, and
marine products, as any of the terms are defined in present law.
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 repeals the provision of law relating to false advertising as change in
condition following licensure for which a license can be revoked for under present law and
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 the use of false, misleading,
or unsubstantiated advertising in connection with his business.
Proposed law adds a nonexclusive list of what shall be considered 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, HLS 14RS-1454 ENGROSSED
HB NO. 770
Page 8 of 9
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
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 customer 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
customer in which the purchaser provides a down payment for the purchase of a 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
customer in which the customer 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 includes:
(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)Clear statements that 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 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 customer to secure financing or to obtain state-mandated
compulsory automobile insurance, if the customer failed to provide accurate
or complete information necessary to obtain financing or insurance or
regarding the customer's ability to obtain credit or insurance, shall be treated
as the customer withdrawing.
(4)A time limit in which to complete the transaction not to exceed 20 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 price of the vehicle and a description of the vehicle including the make, model,
year, identification and serial number and its condition.
(7)The amount of the trade-in allowance and a description of the trade-in vehicle
including the make, model, year, identification and serial number and its condition. HLS 14RS-1454 ENGROSSED
HB NO. 770
Page 9 of 9
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
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.
(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 proposed law.
(Amends R.S. 32:781(5) and (13)(a)(i); Adds R.S. 32:792(B)(17) and 796; Repeals R.S.
32:792(B)(1)(d) and 795)
Summary of Amendments Adopted by House
Committee Amendments Proposed by House Committee on Commerce to the original
bill.
1. Made technical corrections and additions.
2. Amended definition of "motor vehicle" in portion of law pertaining to used
motor vehicle dealers.
3. Repealed the provision of law relating to false advertising as change in condition
following licensure under present law and provided 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 the use of false,
misleading, or unsubstantiated advertising in connection with his business.
4. Provided that advertisements are false or misleading if all restrictions or
limitations on financing terms are not in the same size lettering as the offer.
5. Provided the disclosure statement required pursuant to proposed law shall
contain a clear statement that the inability of the customer to secure financing or
to obtain state-mandated compulsory automobile insurance, or the customer's
failure to provide accurate or complete information necessary to obtain financing
or insurance or regarding the customer's ability to obtain credit or insurance,
shall be treated as the customer withdrawing.