TrueCar gets OK from Virginia MVDB

TrueCar gets OK from Virginia MVDB

The Virginia Motor Vehicle Dealer Board (MVDB) on Monday, July 9, 2012, gave approval to TrueCar to operate in the Commonwealth utilizing its new flat pricing system based on geography and brands sold as the basis for estimating the number of clicks or hits a dealer is likely to get. MVDBs action last Monday reversed rulings it made earlier this year when the Board found TrueCars business model to be violative of vehicle sales licensing laws.

MVDB has held for some time that pricing per click on the Internet is a valid pricing method under the Virginia bird dog statute and found that TrueCars model that used geographical area and brand sold by the dealer as a proxy for the number of clicks the dealer could expect was in compliance with Virginia law. In approving TrueCars pricing model, the Board reminded dealers that when doing business with a lead referral company, a dealer should be careful that it is not paying per sale or per lead and that its advertising through the provider complies with Virginia law.

For a detailed look at TrueCars current national situation relative to other lead-generating companies, WANADA dealer members are encouraged to review an excellent article which appears in the July 9, 2012 issue of Automotive News.

WANADA will join MADA in pursuing this development on TrueCar and other vehicle sales licensing issues in further discussions with the Maryland Motor Vehicle Administration.

The Board also ruled on two other matters that turn on the issue of dealer tags. In the first instance the Board opined that a dealer should declare to its insurance company the total number of dealer plates it has assigned to it to ensure that all plates are adequately covered by insurance.

The issue arose because of a discrepancy between actual –80– and declared –16– dealer tags for a dealer with two locations. The Board is advising dealers that MVDB field representatives are asking to see dealer insurance policies to ensure they match up with the number of declared plates on a policy to the number of tags assigned to the dealership. And where there is a substantial discrepancy, the dealer may face regulatory action. The Board delayed an official ruling on the referenced case until its September meeting so that it can research further the impact of declaring fewer dealer tags than a dealer has assigned for insurance purposes.

Another serious matter considered by the Board pointed out the danger of misusing dealer tags. The Board noted that a conviction for misuse of a dealer tag is a misdemeanor, also known as a criminal matter and not a civil violation of the law, such as a traffic ticket to a motorist. Among other things, being convicted of a crime is something that must be declared on things like a dealers license application. The Board said it will investigate how the question on the dealer license application concerning a conviction of a crime can be better stated. The Board wants to ensure that dealer applicants understand the gravity of a conviction for misuse of dealer tags.

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Finally, dealers are reminded that July 1, 2013 is the deadline for all franchised dealers to be on the electronic titling system, though it is noteworthy, according to the records of DMV, that all franchised dealers are already in compliance with that requirement.

An advisory memo from MVDB executive director Bruce Gould was sent to Virginia dealers covering the July 9 meeting agenda earlier this week. Click here to read the entire memo.