Virginia Motor Vehicle Dealer Board July report

Virginia Motor Vehicle Dealer Board July report

The Virginia Motor Vehicle Dealer Board (MVDB) with its auto industry balanced leadership discussed a variety of issues at their July 11 meeting, ranging from insurance of dealer tags to alleged violations by the Tesla dealership in Tysons Corner.

Insurance of dealer tags: MVDB has been studying this issue and determined that many dealers have blanket coverage for all tags, and other dealers have coverage for enumerated tags only. The Board decided not to change its policy on inquiries about dealer tag coverage during inspections.

Insurance agencies in dealerships: MVDB staff had questions whether a Nissan dealership could continue to operate the Allstate agency it had opened in the store. The agency sells all forms of insurance. The staff contended that under Virginia law, a dealerês building must be dedicated exclusively to the automobile business. MVDB determined that the law requires only 250 square feet to be devoted to vehicle sales, such that a dealer with a larger building can have other businesses operating on site so long as they are effectively separated from the amount of space dedicated to sales.

Shift used-car business: MVDBês executive director reported on his activities involving the web-based used-car business Shift. Working with DMV investigators, MVDB staff determined that Shift is in the business of retailing used cars in Virginia, and it must be licensed. MVDB staff has put the company on notice and has said it will consider criminal action if Shift ignores its obligations under Virginia law.

Tesla violations: VADA has filed a complaint with the MVDB alleging multiple violations by the Tesla dealership in Tysons Corner. The information was developed during a hearing about Teslaês request to own its own dealership in Richmond. The executive director reported that the MVDB staff is currently investigating the complaint.

Thanks to WANADA advisor and dealer lawyer Mike Charapp of Charapp & Weiss, LLP for backgrounding this report.