Follow guidelines for MD finance/lease contracts
The Maryland Motor Vehicle Administration reminds dealers that the following guidelines must be observed for dealer financing and lease agreements. Verification of these requirements will be incorporated into the regular audit process.
A motor vehicle dealer that sells or leases a vehicle before final approval of dealer-arranged financing must provide the buyer with notice of the rights and duties of both the dealer and the buyer. A copy of the notice must be provided to the buyer before he or she takes delivery of the vehicle.
The notice must contain: (1) signatures of the buyer and dealer and (2) the Maryland statutory language as written in Transportation Article 15-311.3(A). Dealers should discard any old notices that do not include the required language.
A dealer is required to provide written notice to the buyer if the dealer-arranged financing is not approved within four days of vehicle delivery. This notice may be by fax, email, text or mail. The dealer may also want to phone the customer. If the dealer does not provide written notice to the buyer within four days of delivery, the deal is final according to its terms.
If financing does not go through, the buyer must return the vehicle within two days of receiving the written notice that the financing was not approved. A dealer may proceed with legal repossession methods if the vehicle is not returned.
If a customer receives proper timely notice of the original financing terms not being met, the customer and dealer may renegotiate the vehicle sale terms. If the customer decides not to accept renegotiated terms, the dealer must return any trade-in and/or down payment provided by the customer. Therefore, the dealer may not dispose of the trade-in until the deal is final in accord with the state statutory provisions.
The dealer is prohibited from charging any mileage costs or other fees for the use of the vehicle for which financing was not approved.
The dealer is required to maintain the minimum liability insurance required for Maryland for the vehicle until the terms of a financing or lease agreement are approved.
A buyer may not waive these rights.
A violation of this law by a dealer is an unfair and deceptive trade practice under the Maryland Consumer Protection Act, subject to that Actês civil and criminal penalty provisions.
Any questions or concerns may be directed to Gerry Murphy in the WANADA office at (202) 237-7200 or MVA directly, email@example.com.Download Bulletin PDF