Sunday, March 30, 2008


The Motor Vehicle Enforcement Division (MVED) of the Utah State Tax Commission, which is a tax agency, has very knotty rules and procedures for motor vehicle dealers. Running a dealership requires a lot of paperwork to be done. Every transaction must be properly documented. This is an implication of the strict regulations imposed by the MVED due to the presence of fraudulent dealers around. Engaging in this type of business will require you to understand every single detail in the auto industry. Here is some detailed information and links that will acquaint you with the system of dealership and will help you manage it effectively to remain in compliance with the Utah State Tax Commissions and the MVED.

Dealer license

A dealer’s license is usually required if you sell three or more vehicles a year. However, a license is not required if you sell your own vehicles that you owned for at least 12 months.

Dealer’s license has two types. A dealer’s license for new motor vehicles allows you to sell and dismantle new and used vehicles and run a body shop. This includes trailers that have an empty weight of at least 2,000 pounds.

The other is a dealer’s license for used motor vehicles which allow you to sell used vehicles only. The same two types of dealer’s licenses apply with dealers of with new or used motorcycles, snowmobiles, off-highway vehicles, and small trailers that have en empty weight of 750 to 1,999 pounds.

Your license certificate must be displayed on your shop or store. Carry your license card with you whenever you are in the job or driving one of the vehicles. Regardless of the date of issuance of your license, it expires every June 30 annually at midnight. License fee will not be reduced for licensing periods shorter than one year.


You need to provide a place for all documents in your automobile store because everything is to be documented and the record must be kept for at least five years. You should always be prepared to show the records when an MVED employee or police officer pops up at your business and looks for it.

The records you need to keep are record of every vehicle bought or exchanged, or received or accepted for sale or exchange, record of every used part or used accessory bought or acquired, record of every motor vehicle bought or acquired and wrecked or dismantled, all buyers' orders, contracts, odometer statements, temporary permit records, financing records, and all other documents related to the purchase, sale, or consignment of motor vehicles.

You should also keep records of the name and address of the person to whom any motor vehicle or motor vehicle body, chassis, or engine is sold or disposed of, and a description of the vehicle by year, make, and vehicle identification number (VIN).


The lien-holder must be notified through a correspondence if in case you accept a trade-in from a customer who still owes a balance on the loan for the vehicle. You must be the one to notify the lien-holder and pay the balance within 21 days after the vehicle is sold or 15 days from the date of the full payment of the vehicle you sold.

You are given five days to inform the lien-holder through a letter that the sale has been withdrawn if the sale falls through within 21 days. The trade-in vehicle must then be returned to the customer.

Third-party warranties

From the date you sell a third-party warranty or service contract to a customer, you must pay the warranty or service contract company. Within 15 days of the sale the warranty or service contract must now be valid. Failure to pay the warranty or service contract company within 15 days will make you accountable to the customer for any damages covered by the warranty. Moreover, you may face a dealer's license suspension.

Salvage vehicles

A salvage vehicle denotes a vehicle that suffered too much damage due to an accident, flood, or other event that it is more expensive to repair it than the fair market value of the vehicle. Rebuilt or restored vehicle is named to a salvage vehicle that is repaired in order to function normally.

A dealer must inform both the customer and the prospective lien-holder of the vehicle’s status by using the Form TC-814 before marketing a salvage or rebuilt/restored vehicle. This form is only available at the MVED. This may also be recognizably displayed in the bottom of the passenger-side windshield when it is advertised for sale.

Safety inspections

Prior for the buyer to get a temporary license, the vehicle must be submitted for a Utah safety inspection. An emissions test is also compulsory in some counties. The dealer may either submit the car for inspection first before selling it or sell the car as it is without issuing buyer a temporary permit. In order to pass the inspection, the dealer must perform any necessary repairs to the vehicle.

Registration and title

The dealer has 30 days to obtain a registration and license plate for the buyer from the Division of Motor Vehicles (DMV). You only have 21 days to complete it if you sell a vehicle to another dealer. Aside from these, the dealer should have issued the buyer a temporary permit in order to legally drive the vehicle. Otherwise, if the temporary permit is not issued, you are only given 48 hours to deliver the title. You can raise your questions to:

Division of Motor Vehicles
210 N. 1950 W.
Salt Lake City, UT 84134
(801) 297-7780

Monthly dealer report of sales

The sale is reported on the title application when you issue a temporary permit for a sold vehicle and complete the registration paperwork for the customer. If you did not issue a temporary permit, the sale is reported by submitting a Motor Vehicle Dealer Monthly Report of Sales.

Permits and plates

The MVED issues the following permits for unregistered vehicles aside from the temporary permits that the dealer provides the buyer.

These permits are extension permits (for when a temporary permit expires before the dealer has registered the vehicle), nonresident permits (for those who buy a vehicle in Utah for registration in another state), loaded demonstration permits (for the dealer to use a dealer plate to demonstrate an unregistered loaded vehicle to a customer), in-transit permits (that allow dealers 96 hours to transport unregistered vehicles on Utah highways), and dismantling permits (for dismantling a vehicle or taking it to a licensed dismantler, crusher, or salvage dealer).

License plates are also issued by the MVED by type.

The first type is the dealer plate for transporting unlicensed vehicles owned or consigned by the dealer on public highways. Dealer plates may not be placed on vehicles you have sold or leased, nor may they be used on relatives' cars. They may only be used by dealers on vehicles that belong to the dealership. Just like dealer licenses, dealer plates expire every year on June 30 and must be renewed annually. If the dealership sold less than three vehicles in the previous year, the dealer plates will not be renewed.
The other types of license plates are dismantler plates, manufacturer plates, and transporter plates.


Utah prescribed advertising regulations to dealers. Any violation made result to serious penalties. You must review the summary of regulations.

Odometers, mileage, and disclosure

It is required that an odometer of the car is functioning properly when registering a vehicle in Utah. Except when taking a vehicle for repair, it is illegal to drive a vehicle with a malfunctioning and damaged odometer. Odometer reading must be accurate at all times that is why it is illegal to install a device that alters the true odometer reading. You cannot also sell a car with an odometer altering device. Moreover, to issue a false odometer statement or to tamper with a vehicle's odometer in any means is punishable by the law.

Under the law, a signed Odometer Disclosure Statement must be supplied by dealers to the buyer. A repair or replacement label must be noted in the disclosure statement if there are any, and the vehicle must have a decal for this condition that must be placed on the driver's side door frame for good. The decal is available at the MVED.

Lemon Law

It is under the Lemon Law that anyone who purchased or leased a new car or RV is entitled of a refund or replacement if the vehicle has significant defects that cannot be fixed.

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