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ACT No. 423
Regular Session, 2014
HOUSE BILL NO. 770
BY REPRESENTATIVE PRICE
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) are hereby amended and reenacted and R.S.10
32:792(B)(17) and 796 are hereby enacted to read as follows:11
§781. Definitions12
As used in this Chapter:13
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(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
meet the safety requirements prescribed by R.S. 32:1301 through 1310 which is used21
or is designed to be used, for the transporting of passengers or goods for public,22
private, commercial, or for-hire purposes and, including but not limited to motor23
homes, motorcycles, all-terrain vehicles, recreational vehicles, travel trailers, boat24 ENROLLEDHB NO. 770
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trailers, ambulances, buses, fire trucks, conversion vehicles, wreckers, semitrailers,1
hearses, and marine products, as any of the terms are defined in R.S. 32:1252.2
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(13)(a)(i) "Used motor vehicle dealer" means any person, partnership,4
corporation, limited liability company, or other entity who, for a commission or with5
intent to make a profit or gain of money or other thing of value, buys, sells, brokers,6
exchanges, rents with option to purchase, auctions at retail or public, offers, or7
attempts to negotiate a sale or exchange of an interest in used motor vehicles and8
who is engaged wholly or in part in the business of buying and selling used motor9
vehicles, whether such motor vehicles are owned by such person and whether the10
motor vehicles are sold from a dealership location or via any form of advertising,11
including but not limited to the Internet. A person shall be presumed to be engaged12
in the business of selling used motor vehicles if he sells five or more used motor13
vehicles in any twelve-month period which vehicles are not registered to and insured14
by members of the individual's household, immediate family members, or legal15
entities in which the individual has an ownership interest in or is employed by or16
which employ the individual. An entity shall be presumed to be engaged in the17
business of selling used motor vehicles if the entity sells five or more used motor18
vehicles which are not registered to and insured by the entity or by an entity19
affiliated with the entity receiving anything of value.20
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§792. Denial, revocation, or suspension of license; grounds; unauthorized acts22
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B. The commission may revoke or suspend a license, issue a fine or penalty,24
or enjoin a used motor vehicle dealer, dealer in used parts or used accessories of25
motor vehicles, used motor vehicle auctioneer, or salesperson for any of the26
following conduct:27
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(17) Use of false, misleading, or unsubstantiated advertising in connection29
with his business. For the purpose of this Paragraph, false, misleading, or30 ENROLLEDHB NO. 770
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unsubstantiated advertising in connection with the sale of a used motor vehicle shall1
include but not be limited to the following:2
(a) Making unsubstantiated claims regarding the dealership, such as being3
the "largest" or "biggest" dealer, or being the "number one dealer" in an area.4
(b) Advertising that notes will not have to be paid by the customer for a5
certain period of time, unless the dealer can substantiate the delay in payment and6
unless the delay is offered to all customers without restriction or limitation.7
(c) Advertising a loan interest rate without including all restrictions or8
limitations in the same size lettering.9
(d) Advertising guaranteed credit approval without including all restrictions10
or limitations and any required credit rating in the same size lettering.11
(e) Advertising a monthly note without restriction or limitation and without12
reference to an approved credit rating in the same size lettering.13
(f) Advertising a guaranteed amount for trade-ins.14
(g) Advertising a price other than the full cash price for which the vehicle15
will be sold, except for tax, title, and license, which must be referenced.16
(h) Advertising a price without providing a complete and accurate17
description of the vehicle, including make, model, year, and any identification and18
serial number of the vehicle.19
(i) Performing a "bait and switch" in which the dealer does not have the20
vehicle advertised for sale and has not had the vehicle within a reasonable time from21
the advertisement.22
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§796. Deposit and down payment disclosure and delivery of vehicle pending the24
sale25
A. In every transaction between a used motor vehicle dealer and a customer26
in which the customer provides a deposit on a used motor vehicle, the used motor27
vehicle dealer is required to provide a statement that the deposit given is on an28
agreement to purchase, and not an actual sale. The agreement shall clearly state that29 ENROLLEDHB NO. 770
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no transaction has actually occurred, that no sales documents have been completed,1
and that the deposit is merely intended as a hold on a vehicle.2
B. In every transaction between a used motor vehicle dealer and a customer3
in which the customer provides a down payment for the purchase of a used motor4
vehicle, the used motor vehicle dealer is required to provide, either on the bill of5
sale, or by separate agreement, a statement that the sale is conditioned upon certain6
identifiable events, such as financing or obtaining state-mandated compulsory7
automobile insurance.8
C. In every transaction between a used motor vehicle dealer and a customer9
in which the customer provides either a down payment or a deposit for the purchase10
of a used motor vehicle, the used motor vehicle dealer shall complete a disclosure11
statement containing the terms and conditions of the transaction, including but not12
limited to the following:13
(1) The amount of the deposit or down payment.14
(2) Whether the money given is either a deposit or down payment.15
(3) Terms and conditions for return or forfeiture of the customer's deposit or16
down payment.17
(4) A time limit in which to complete the transaction not to exceed twenty18
days.19
(5) A complete description of the motor vehicle to be sold including the20
make, model, year, and any identification and serial numbers.21
(6) The price of the vehicle and a description of the vehicle including the22
make, model, year, identification, and serial number and its condition.23
(7) The amount of the trade-in allowance and a description of the trade-in24
vehicle including the make, model, year, identification, and serial number and its25
condition.26
D. If the dealer allows the customer to take delivery on a vehicle which is27
the subject of either a deposit or a down payment, a pre-delivery sale disclosure28
statement from the dealer and the customer shall include the following:29 ENROLLEDHB NO. 770
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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, the amount of which may be5
deducted from the 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 twenty-five dollars per day and thirty-five cents per mile, which may be10
deducted from the deposit or down 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 the agreement,13
the 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
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
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Section 2. R.S. 32:792(B)(1)(d) and 795 are hereby repealed in their entirety.23
SPEAKER OF THE HOUSE OF REPRESENTATI VES
PRESIDENT OF THE SENATE
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: