TITLE 12 TRADE, COMMERCE AND BANKING
CHAPTER 2 CONSUMER
PROTECTION
PART 13 REQUIREMENTS
FOR SPOT DELIVERY OF MOTOR VEHICLES
12.2.13.1 ISSUING
AGENCY: Office of the New Mexico Attorney General.
[12.2.13.1 NMAC -
Rp/E, 12.2.13.1 NMAC, 8/1/2012]
12.2.13.2 SCOPE: Motor
vehicle dealers.
[12.2.13.2 NMAC - Rp/E,
12.2.13.2 NMAC, 8/1/2012]
12.2.13.3 STATUTORY
AUTHORITY: New Mexico Unfair Practices Act, Section
57-12-1 NMSA 1978 et seq.
[12.2.13.3 NMAC - Rp/E,
12.2.13.3 NMAC, 8/1/2012]
12.2.13.4 DURATION: Permanent.
[12.2.13.4 NMAC - Rp/E,
12.2.13.4 NMAC, 8/1/2012]
12.2.13.5 EFFECTIVE
DATE: August 1, 2012, unless a later date is cited
at the end of a section.
[12.2.13.5 NMAC - Rp/E,
12.2.13.5 NMAC, 8/1/2012]
12.2.13.6 OBJECTIVE:
A. The purpose of
this rule is to accomplish two principal objectives:
(1) deter
unfair business practices in the sale of motor vehicles that result in economic
harm, and
(2) provide
clear legal standards for the sale of motor vehicles where the sale of the
vehicle is contingent upon approval of financing of the vehicle.
B. The attorney
general’s office has received numerous complaints from consumers where the
motor vehicle dealer asserts that the transaction is contingent upon financing
of the vehicle or approval of financing, but where adequate disclosure of this
contingency is not made in a timely manner, where the dealer asserts the right
to cancel the contract based on a failure of this contingency or right to
unilaterally renegotiate the terms of the sale, or where the dealer sells the
consumer’s trade-in vehicle prior to confirmation of financing and finalization
of the transaction thus converting the use and possession of the consumer’s
trade-in vehicle.
[12.2.13.6 NMAC - Rp/E,
12.2.13.6 NMAC, 8/1/2012]
12.2.13.7 DEFINITIONS: The
following terms have the meanings set forth herein.
A. “Motor vehicle
dealer” means:
(1) any person who sells
or solicits or advertises the sale of new, demonstration or used motor vehicles and who is licensed pursuant to the motor vehicle
code; or
(2) any
person who sells four or more motor vehicles in a calendar year whether
licensed or not.
B. “Motor vehicle”
means every vehicle that is self-propelled and every vehicle that is propelled
by electric power obtained from batteries.
This includes but is not limited to automobiles, trucks of all
varieties, motor cycles, recreational vehicles, reconstructed motor vehicles, specialty constructed motor vehicles, road
tractors, all of which may be for personal, household, or commercial use.
C. “Purchase price”
means the actual price before the deduction of the value of any trade-in and
shall not include such charges as taxes, registration fees, extended warranties,
service contracts, credit disability insurance, or any other charges incidental
to the purchase.
D. “Revocation”
means the cancellation, voiding or annulment of the contract or withdrawing of
acceptance to purchase the motor vehicle.
E. “Spot delivery”
means a contingent motor vehicle sale transaction by which the buyer is allowed
to take possession of the motor vehicle pending the finalization of financing.
[12.2.13.7 NMAC - Rp/E,
12.2.13.7 NMAC, 8/1/2012]
12.2.13.8 SPOT
DELIVERY GENERALLY: In a sale conditioned on financing, it is an
unfair trade practice for a motor vehicle dealer who delivers a new,
demonstration or used motor vehicle to a buyer to.
A. Orally or in
writing represent to the buyer at the time of signing the purchase order
agreement or sales transaction document that the sale is final and complete if
the financing contingency is unmet.
B. Refuse to void
and nullify the contract if financing is not finalized within 20 calendar days
from the date of delivery of the motor vehicle.
C. Fail to return to
the buyer, within a reasonable time, all sums of money paid or collateral
including a trade-in provided by the buyer and held by the motor vehicle dealer.
D. Accept a
trade-in and then sell or remove the trade-in from the lot where the
transaction occurred before the financing of the purchased motor vehicle has
been finalized and the sale completed.
E. Fail to pay the
retail value of the trade-in vehicle or the assigned value of the trade-in
itself, as well as all other monies or things due the buyer should the motor
vehicle dealer sell or remove the trade-in from the lot before the financing
has been finalized. The risk of loss during the period shall be assessed
against the motor vehicle dealer.
F. Fail to timely
pay the lender the monthly scheduled payment, should a payment become due
before the sale is final. The buyer will
reimburse the dealer for such a payment if the contract is rightfully revoked
in accordance with this rule.
G. Charge the buyer
for any costs associated with the refurbishing, repair or maintenance of the trade-in
or for any sums paid by the motor vehicle dealer to pay off the outstanding
debt owed on the trade-in. However,
should the buyer rightfully revoke the contract, buyer will reimburse the motor
vehicle dealer for payments made on the outstanding balance of the trade in.
H. Fail to include
the following statement in no less than bold 12 point type, conspicuously
placed on the purchase order agreement or sales transaction document and signed
ONLY by the buyer subject to the financing contingency: SPOT DELIVERY: Buyer has the right to void
this purchase if financing is not approved within 20 calendar days after
delivery of vehicle. Buyer has the right
to the return of any trade-in and all money paid by buyer, if buyer voids this contract under this paragraph. To exercise this right, buyer must return the
vehicle to the dealer in the same condition as received (normal wear and tear
excepted), within 48 hours of receipt of notice that financing was not approved. Dealer shall not charge any fees as long as
the vehicle is returned as provided in this paragraph.
I. Charge any
usage fee or any other type of surcharge to the buyer in association with the
rightful revocation of the purchase order agreement or sales transaction
document as provided by this rule.
J. Fail to
maintain for a period of three years in the dealer file jacket the following
documents regardless of whether the sales transaction is finalized:
(1) copies of all credit
applications, transmittals sent to or received from any lender, or any
documents related to the approval or denial of financing, offers or
counteroffers of financing, or requests for additional information related to a
request for financing;
(2) copies of every
signed purchase agreement or sales transaction document; and
(3) a
log recording the date the dealership notified the buyer of the changes to the
contract, with a detailed description of the changes to the terms and
conditions of the sale of the vehicle, and the date upon which the purchaser
agreed to each of the changes.
K. Fail to provide
a copy of every signed purchase order agreement or sales transaction document
to the buyer at the time of signing.
L. Make any
statement or representation to the buyer, orally or in writing, either before
or after the purchase order agreement or sales transaction document is signed,
that misleads the buyer as to his rights of revocation under this rule, including
but not limited to, misrepresenting to the buyer his right to revoke acceptance
of the contract and “walk away” without incurring any legal obligation should the
motor vehicle dealer fail to meet the contingency financing agreement.
[12.2.13.8 NMAC - Rp/E,
12.2.13.8 NMAC, 8/1/2012]
12.2.13.9 SEVERABILITY: If
any portion of this rule is held invalid, the remainder of the rule and
application thereof shall remain unaffected.
[12.2.13.9 NMAC - Rp/E,
12.2.13.9 NMAC, 8/1/2012]
HISTORY OF 12.2.13 NMAC:
History of Repealed Material:
12.2.13 NMAC,
Requirements for Spot Delivery of Motor Vehicles, filed 4/16/2012 - Repealed
effective 6/1/2012.