Governor Tom Wolf signed legislation protecting dealers on issues with recalls, facilities and licensing on June 28. Act 59 of 2018 takes effect on August 27, 2018.
The Act provides for manufacturers to compensate new vehicle dealers for in-brand used vehicles subject to recall; requires dealer disclosure of any open recall when used vehicles are sold; prohibits manufacturers from demanding facility upgrades within 10 years of construction or prior renovation; establishes a provisional permit allowing a new vehicle dealership to operate while awaiting license by the Department of State; and expands the definition of the documentary fee.
Used Vehicle Recalls
Act 59 requires manufacturers to compensate new vehicle dealers after 30 days for in-brand used vehicles at a rate of 1.5 percent in instances where a recall or remedy parts are unavailable and a stop sale or do-not-drive is in effect. The legislation also requires dealerships to disclose to consumers any unremedied recall using safercar.gov. At the time of the sale, dealer personnel must utilize a VIN search on safercar.gov, print the recall report and provide it to the customer, if the vehicle has a recall. A copy must be maintained in the deal jacket.
Manufacturer Facility Requirements
Act 59 of 2018 further amends the Board of Vehicles Act to specifically prohibit manufacturers from imposing revised facility requirements within 10 years of construction, alteration or remodel of the dealership facility.
Dealership Licensing by the Department of State
New dealerships, who have trouble obtaining their dealership licenses from the Pennsylvania Department of State in a timely manner, can now obtain a “provisional permit” to operate. According to the law, new vehicle dealers without the franchise approval letter, the telephone business line information, the certificate of occupancy or the lease or deed for the property available will receive a “temporary permit.”
This permit, which is good for 45 days, should expedite new dealership openings and allow dealers to operate while the required paperwork is complied, submitted and reviewed.
Revised Definition of ‘Documentary Preparation Charge’
Act 59 expands the definitions of what dealer costs can be compensated through a documentary fee to include dealer costs resulting from privacy and safeguarding customer information, such as financial services and preparation or retrieval of documents.
The Act did not automatically increase the documentary fee, which remains a maximum of $118 for processing title work manually or $141 for dealers performing online registrations with a provider such as Cox/Dealertrack.
The Act 59 takes effect on August 27, 2018.