Licensed Vehicle Dealers

The increased internet sales activity by licensed dealers raises new questions for many jurisdictions such as: How can someone tell if an advertisement is from a dealer with a valid license? Is a dealer including online sales numbers in any required jurisdictional reporting? Is there a need to modify jurisdictional record retention requirements related to internet advertising/sales? Is there a need to track the electronic footprint of a licensed dealer’s internet advertising activity? The majority of jurisdictions currently require that licensed vehicle dealer sales occur at a licensed location with a physical area to display vehicles offered for sale. With demand increasing for internet vehicle sales, many licensed dealers no longer see a need to display their vehicles on a traditional sales lot, and instead are solely displaying and advertising their vehicles online.

Private-Party Vehicle Sales

Retail consumer protections in vehicle sales are greatly reduced when the seller is a non-dealer private party. In a private-party non-dealer transaction, the retail buyer has limited recourse if an issue arises with the transaction. The protections available to retail buyers of used vehicles sold by private-party sellers will normally come with no warranty or guarantee of any kind and are not certified in any way. Many jurisdictions’ consumer protection laws are limited to sellers that are in the business of selling, and do not include private citizens conducting a single transaction.

Use of Social Media to Buy Vehicles

Today, vehicles are posted for sale by dealers and private parties on many social media sites. This can be an effective and convenient method of advertising vehicles, but it is possible to set up a fraudulent social media profile and use it to sell vehicles that may or may not exist, or are not accurately represented. It is important for the consumer to have accurate information about the vehicle and to know who is selling it.

Private Sales Advertising

Jurisdictions may be able to reduce vehicle sales fraud by helping to educate individuals buying and selling vehicles. Individuals are using the internet to advertise and to sell their vehicles and may not be aware of laws and rules that apply to them when selling their vehicle. Just as buyers can be victims of internet sale crimes, individuals selling vehicles can also be harmed.

General Advertising Requirements

Most jurisdictions have general advertising laws, rules or policies that may have been developed many years ago when most advertising was done in newspapers and on television and radio, which reached only consumers in the local geographical area. Current regulations may not address all of the concerns related to internet-based media advertising. In addition, there are federal regulations addressing internet-based sales. It is important that all forms of advertising provide accurate and complete information to protect consumers and to help them make informed decisions.