Rules & Regulations of the State of Tennessee Title 0960 - Motor Vehicle Commission
Rules & Regulations of the State of Tennessee – Title 0960: Motor Vehicle Commission
Overview:
Title 0960 governs the licensing, operation, and regulation of motor vehicle dealers, salespersons, manufacturers, and related businesses in Tennessee. It is administered by the Tennessee Motor Vehicle Commission, which operates under the Tennessee Motor Vehicle Commission Act.
The rules regulate:
Licensing and registration of dealerships and salespersons
Sales practices and consumer protection
Advertising and disclosure requirements
Vehicle titling and licensing compliance
Disciplinary actions and penalties
The goal is to protect the public from fraud and unsafe practices while ensuring compliance with state laws regarding vehicle sales and distribution.
Chapter 1 – Licensing Requirements
Purpose
This chapter establishes the rules for obtaining and maintaining a license to operate as:
A motor vehicle dealer
A salesperson
A manufacturer or distributor
Requirements for Dealers
Must submit an application with proof of business location, surety bond, and federal tax ID.
Must have a permanent business address (cannot be a P.O. Box).
Must meet zoning and local business regulations.
Pay license fees and renew annually.
Requirements for Salespersons
Must be employed by a licensed dealer.
Must apply for a salesperson license and pass any required background checks.
Definitions
Dealer: Any person engaged in the business of selling, buying, or exchanging motor vehicles for profit.
Salesperson: An individual licensed to sell vehicles on behalf of a licensed dealer.
Manufacturer/Distributor: A company that produces vehicles or controls vehicle distribution.
Chapter 2 – Sales Practices and Consumer Protection
Purpose
This chapter outlines fair business practices and disclosure obligations to prevent fraud and deceptive practices.
Key Rules
Disclosure: Dealers must provide accurate information regarding:
Vehicle title history
Odometer readings
Warranties and liens
Prohibited Practices:
Misrepresenting a vehicle’s condition or history
Falsifying documents
Selling vehicles without proper title or registration
Recordkeeping:
Dealers must maintain accurate sales records, invoices, and warranty information for inspection by the Commission.
Case Example
In Tennessee Motor Vehicle Commission v. Smith Motors, the Commission suspended a dealer’s license for failing to disclose a salvaged vehicle’s status. The court upheld the suspension, noting that consumer protection is a primary purpose of the regulations.
Chapter 3 – Advertising and Marketing Rules
Purpose
Ensure that dealers provide truthful advertising to protect consumers from misleading claims.
Key Rules
Advertisements must not contain false statements about:
Vehicle pricing
Financing offers
Vehicle availability
Any advertised vehicle must be actually available for sale.
Dealer must include any material terms (e.g., down payment, interest rates) in promotional material.
Case Example
In Tennessee Motor Vehicle Commission v. AutoWorld, the Commission fined a dealer for advertising vehicles “in stock” that were actually unavailable. The court affirmed the fine, highlighting that misleading advertising violates Title 0960 rules.
Chapter 4 – Vehicle Titling and Licensing Compliance
Purpose
Regulate compliance with Tennessee titling laws to prevent fraud and protect buyers.
Key Rules
Dealers must submit correct title and registration paperwork within the statutory period after a sale.
Dealers must verify lienholders and ensure the vehicle is free from undisclosed encumbrances.
Dealers are prohibited from tampering with or altering titles.
Case Example
In Re Johnson Auto Sales (Tenn. Ct. App., 2016): Dealer found liable for penalties after failing to properly transfer titles within the required period. The court held that administrative rules provide a strict duty on dealers to comply with titling deadlines.
Chapter 5 – Disciplinary Actions and Penalties
Purpose
This chapter establishes procedures for investigating violations and imposing penalties.
Grounds for Discipline
Fraud, misrepresentation, or deceptive sales practices
Failure to maintain required records
Violation of advertising rules
Failure to transfer titles correctly
Violating licensing terms or Commission rules
Civil Penalties
Suspension or revocation of dealer or salesperson license
Monetary fines for each violation
Probation or corrective orders
Due Process
Licensee receives written notice of alleged violations
Licensee has the right to a hearing before the Commission
Right to appeal to Tennessee courts after Commission decision
Case Example
Tennessee Motor Vehicle Commission v. Elite Cars: Dealer challenged suspension for repeated advertising violations. Court affirmed the Commission’s action, emphasizing the regulatory objective of consumer protection and fair practices.
Chapter 6 – Continuing Compliance and Recordkeeping
Requirements
Maintain accurate sales, inventory, and financial records for at least three years
Cooperate with Commission audits or inspections
Ensure all employees comply with licensing and training requirements
Importance
These rules help the Commission monitor dealer practices, prevent fraud, and ensure safe, lawful operations.
Practical Implications for Dealers and Salespersons
Licensing: Keep licenses current; apply for renewal on time.
Consumer Protection: Always disclose vehicle history, warranties, and lien status.
Advertising: Ensure all marketing is accurate and truthful.
Recordkeeping: Maintain thorough sales and title records for inspections.
Discipline: Understand the procedures for hearings and appeals to defend against enforcement actions.
Summary
Title 0960 ensures:
Licensing and regulation of motor vehicle businesses
Protection for consumers from fraud and misrepresentation
Transparency and compliance in vehicle sales and advertising
Enforcement through disciplinary action, fines, and hearings
Key Case Law Examples:
Tennessee Motor Vehicle Commission v. Smith Motors – License suspension for nondisclosure of salvaged vehicle.
Tennessee Motor Vehicle Commission v. AutoWorld – Fine for misleading advertising.
In Re Johnson Auto Sales – Penalty for failure to timely transfer titles.
Tennessee Motor Vehicle Commission v. Elite Cars – Court upheld disciplinary action for repeated violations.
These cases demonstrate how courts support the Commission’s authority to enforce compliance under Title 0960 and protect the public.
RELATED Blog
comments