We wanted to be sure to alert you to a couple of changes to the VA Buyers Order effective July 1, 2010 which affect Demonstrator Vehicles and Spot Deliveries.

Please read the following information carefully to ensure your forms are up to date so you can take advantage of important legislation passed by the General Assembly.

1. Demonstrators and New Vehicles

Beginning July 1, 2010, a vehicle with less than 7,500 miles on the odometer cannot be considered used until it is titled, even if it was used as a demonstrator. New vehicles with less than 7,500 miles may be sold as new. Except for heavy trucks, new vehicles with more than 750 miles on the odometer must be sold with a notice containing language specified by the new law.

Dealers have two options for compliance by July 1. This disclosure must be given to a buyer either in the buyer’s order or in a separate document. 

If it is in the buyer's order it must be in type no smaller than 10 point. The following language should be added to the front of the Buyers Order in no less than 10 point type.

IF THIS BUYERS ORDER IS FOR A NEW VEHICLE WITH MORE THAN 750 MILES PLEASE READ THIS NOTICE.
Notice: This new motor vehicle has accumulated mileage in excess of 750 miles as the result of use as a demonstrator and/or as the result of delivery to a prior prospective purchaser who never took title to it and who returned it.

If it is given separately, the document must contain only the disclosure in type no smaller than 14 point, it must contain the actual odometer reading at time of sale, and it must be signed by the buyer(s).  CLICK HERE for a sample of the separate form for dealers to use as they deplete their stock of forms.  (Sample is in a Microsoft Word format)

2. Spot Delivery Language:

If you have not changed the spot delivery notices in your buyer’s order forms in the last year to incorporate the new spot delivery notice, you must change your buyer’s order forms by July 1.

Last year the General Assembly enacted legislation supported by VADA to clarify that a vehicle that is spot-delivered but retaken by the dealer is not “repossessed” as defined in the law.  The bill was designed to overrule judicial decisions, decisions which ruled that dealers who retook their own vehicles when financing was not approved had to give to buyers rights under Article 9 of the Uniform Commercial Code.  That article imposes notice and waiting period requirements before a dealer can resell a vehicle, and a dealer that does not provide those can be sued for damages.

As part of that bill, the spot delivery notice in the buyer’s order of the rights to rescind a transaction must be changed.  Dealers were permitted to make that change last year, and many dealers have already changed their buyer’s orders.  If you have not, here is the notice that must be in your buyer’s order forms by July 1 in bold face type no smaller than 10 point:

"IF YOU ARE FINANCING THIS VEHICLE, PLEASE READ THIS NOTICE. YOU ARE PROPOSING TO ENTER INTO A RETAIL INSTALLMENT SALES CONTRACT WITH THE DEALER. PART OF YOUR CONTRACT INVOLVES FINANCING THE PURCHASE OF YOUR VEHICLE. IF YOU ARE FINANCING THIS VEHICLE AND THE DEALER INTENDS TO TRANSFER YOUR FINANCING TO A FINANCE PROVIDER SUCH AS A BANK, CREDIT UNION OR OTHER LENDER, YOUR VEHICLE PURCHASE DEPENDS ON THE FINANCE PROVIDER'S APPROVAL OF YOUR PROPOSED RETAIL INSTALLMENT SALES CONTRACT. IF YOUR RETAIL INSTALLMENT SALES CONTRACT IS APPROVED WITHOUT A CHANGE THAT INCREASES THE COST OR RISK TO YOU OR THE DEALER, YOUR PURCHASE CANNOT BE CANCELLED. IF YOUR RETAIL INSTALLMENT SALES CONTRACT IS NOT APPROVED, THE DEALER WILL NOTIFY YOU VERBALLY OR IN WRITING. YOU CAN THEN DECIDE TO PAY FOR THE VEHICLE IN SOME OTHER WAY OR YOU OR THE DEALER CAN CANCEL YOUR PURCHASE. IF THE SALE IS CANCELLED, YOU NEED TO RETURN THE VEHICLE TO THE DEALER WITHIN 24 HOURS OF VERBAL OR WRITTEN NOTICE IN THE SAME CONDITION IT WAS GIVEN TO YOU, EXCEPT FOR NORMAL WEAR AND TEAR. ANY DOWN PAYMENT OR TRADE-IN YOU GAVE THE DEALER WILL BE RETURNED TO YOU. IF YOU DO NOT RETURN THE VEHICLE WITHIN 24 HOURS OF VERBAL OR WRITTEN NOTICE OF CANCELLATION, THE DEALER MAY LOCATE THE VEHICLE AND TAKE IT BACK WITHOUT FURTHER NOTICE TO YOU AS LONG AS THE DEALER FOLLOWS THE LAW AND DOES NOT CAUSE A BREACH OF THE PEACE WHEN TAKING THE VEHICLE BACK. IF THE DEALER DOES NOT RETURN YOUR DOWN PAYMENT AND ANY TRADE-IN WHEN THE DEALER GETS THE VEHICLE BACK IN THE SAME CONDITION IT WAS GIVEN TO YOU, EXCEPT FOR NORMAL WEAR AND TEAR, THE DEALER MAY BE LIABLE TO YOU UNDER THE VIRGINIA CONSUMER PROTECTION ACT."

Also, the notice applies only to retail installment sales.  To cover leases, this language should be added to your buyers order below the paragraph quoted above:

IF YOU ARE LEASING THIS VEHICLE, THE SAME PROCEDURES, RIGHTS, AND OBLIGATIONS APPLICABLE TO TRANSACTIONS INVOLVING A RETAIL INSTALLMENT SALES CONTRACT STATED ABOVE APPLY TO THIS LEASE TRANSACTION.

Please look for additional information from VADA and our forms providers, Reynolds and Reynolds. Thank you!