New Law Makes Life Easier for Dealerships

October 20, 2010Vol. #1  #3  

       The Miles Law Firm       

A Professional Corporation       

Larry Miles is an attorney with The Miles Law Firm.  Larry has been representing the auto dealers for over 25 years.


The Miles Law Firm is a civil litigation and business firm.  The firm practices in a number of different areas, including the auto and aviation industries.  For more information, please call Mr. Larry Miles directly or review the Firm’s website.

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New Law Makes Life Easier for Dealerships Sharing Common Ownership and Salespeople

by  Larry Miles

     A new law passed by the California Legislature (SB 1004-Huff) aims to help dealers and car salespeople by making it easier for salespeople to work for more than one dealership, so long as the dealerships are controlled by the same ownership.      SB 1004 is effective January 1, 2011.     The law helps multi-franchise dealers and their salespeople who previously could only work for one dealership.  Prior to SB 1004, these salespeople might be able to sell new Fords but had to turn the customer over to another salesperson if they wanted to look at used cars at the dealership next door, despite the fact that the same owner owned both stores.  Starting January 1, 2011, the salesperson will now be able to walk across the street and continue the sale, that is work for both dealerships, assuming they have “common controlling ownership”.     Another area where the legislation will help eliminate uncertainty and frustration in the business is at the local auto auction.  Some mega-dealers and chains have one buyer who buys for several dealerships all under common ownership.  Under current law such a practice might be deemed unlawful because the buyer can only “hang his license” at one of the dealerships and technically shouldn’t be buying for the other stores.  This practice will now clearly be permissible under the new law.     Sales Licenses

     Another minor aspect of the law that will change a traditional practice in dealerships involves the “hanging” of the sales license with the dealership.  The new law will permit a copy of the license to be hung at the dealership, as opposed to requiring that the original license be posted.  When the salesperson leaves, the dealership will have an obligation to return the license, if the license itself was posted, and destroy any copies of the license. 

     Notice to Vehicle Credit Applicant

     Finally, the law made some technical changes to the Notice to Vehicle Credit Applicant required to be delivered to customers when a credit score is obtained.

(This email blast from The Miles Law Firm does not create an attorney-client relationship, nor is it intended that any person rely on the foregoing as legal advice.  Please consult counsel for any specific legal questions.)

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