DMV-DIRECT Newsletter September 2017

S e p t e m b e r | 1 7

Fo r you r dea l e r s h i p’s b i l l i ng c l e r k s , t i t l e p ro c e s s o r s and o f f i c e manage r

AVOID MILEAGE DISCREPANCIES ON VEHICLE TITLES

When your dealership takes a vehicle in trade, or buys one at auction, does the mileage on the front of the title match the mileage listed on the back? If not, you may risk lowering the value of the vehicle. The mileage on the front of the title is printed by the DMV; the mileage on the back is written by the customer/seller. If the number on the front is higher than the number on the back, and the error is not corrected, DMV will brand the title “NOT ACTUAL MILEAGE”, which is likely to impact the vehicle’s resale potential. If the dealership takes a used vehicle with a mileage discrepancy, and does not want it to be branded “NOT ACTUAL MILEAGE”, the discrepancy must be corrected before the vehicle can be resold. In all cases, the dealership will need to: - Contact the DMV Title Department in the state in which the title was issued, tell them about the mileage discrepancy, and ask how they can correct it. - Be able to provide the original title, original MV-103 (signed by both the customer and the dealership), and additional documentation needed for the state issuing the title, and, if necessary, fees to cover the cost of correcting the title.

This process can take up to 8 weeks, depending on when the discrepancy occurred and in what state the vehicle is titled. Since vehicles with mileage discrepancies are unsellable (as “ACTUAL MILEAGE”) during that time, DMV-DIRECT strongly recommends that dealers avoid accepting vehicles with discrepancies. Dealers can make their acceptance of the vehicle conditional upon the owner first correcting the mileage by contacting the DMV. Important Notes about Fixing Discrepancies in NY • The New York State DMV does not extend temporary registrations in order to correct mileage discrepancies. This is another factor that could deter a potential customer who might wish to correct the mileage themselves. (Again, mileage corrections can take as long as 8 weeks.) • A New York State title with an affidavit for mileage correction from another state is not acceptable documentation to have the NYS DMV correct the mileage on the front of a title.

The mileage number listed here must be either equal to or greater than the mileage number listed on the front of the title.

18-10 Whitestone Expressway, Whitestone, NY 11357 • 718.747.0400

S e p t e m b e r | 1 7

SALES TAX CHANGES AFFECTING OUT-OF-STATE TRANSACTIONS Make sure your calculation systems are up-to-date!

Two states recently implemented sales tax changes that impact out-of-state transactions for New York dealerships: - New Jersey now requires sales tax to be collected on all doc fees in both lease and retail deals . Previously, only NJ lease deals required the collection of sales tax. (As a reminder, if the dealership is remitting sales tax to New Jersey, make sure to use the “New Jersey Sales Tax” stamp to mark the “Application for Certificate of Ownership” to the right of the purchase price box. Also remember that this application will be rejected unless it includes the dealer’s signature.) - In South Carolina, the maximum sales tax on the purchase of a motor vehicle has increased from 3% of the purchase price (or maximum of $300) to 5% of the purchase price (or a maximum of $500) . If a dealer sells a vehicle to a customer who intends to register their vehicle in South Carolina, that customer must pay the new 5%/$500 sales tax. There is another new state-imposed fee to register a vehicle in South Carolina, even if the vehicle has already been registered elsewhere. If a vehicle is initially registered in another state and comes to South Carolina to be reregistered, the individual reregistering the If a customer wishes to purchase a new or used vehicle that they plan to export to Canada, dealers are advised to take the following steps during the transaction: Refer to the dealership’s franchise agreement. These may contain specific rules that are to be followed when registering one of the manufacturer’s vehicles for exportation. Dealers who fail to comply may face fines or penalties from their OEM. Call the Registrar of Imported Vehicles hotline at 888.848.8240 to find out if the vehicle meets Canadian requirements. (This could include emissions, necessary safety features, and more.) Supply the customer with a recall clearance letter validating that there are no manufacturer recalls on the vehicle. 3 2 1

vehicle must pay a fee of $250.00. (Only active military members and their spouses and dependents are exempt from this fee.) If a customer purchases or leases a vehicle, obtains an in-transit permit to bring it to South Carolina, and pays the SC sales tax at the point of purchase or lease, they will not need to pay the $250.00 later on . South Carolina has also announced that its registration fees will be increasing in January of 2018. The state will release the new fee schedule for titles, tags, and registration later this year. DMV-DIRECT will let dealers know as soon as this information is made available.

Dealers are advised to assure that the above adjustments have been made in their

compu t e r systems, to avoid errors in sales tax calculations.

GOING NORTH: WHAT TO DO WHEN SELLING A CANADA-BOUND CAR

The documentation the customer will need in order to cross the border will vary depending on the exact border crossing they intend to use . Contact the specific border station, ask them what is required, and then notify the customer. At the border, the customer will be required to complete a form allowing the vehicle into the country and pay a fee. The 4

formmust be kept in the vehicle until it is registered in Canada. Once the vehicle enters Canada, the customer will receive a letter explaining what needs to be done to register it there. For more information call at 718.747.0400

Scenario: A customer neglected to inform your dealership’s staff that their vehicle has a pending insurance lapse with DMV. This problem was only discovered after the paperwork was rejected. How can the dealership resolve this issue in full compliance with DMV? REGISTERING A VEHICLE WITH AN INSURANCE LAPSE

Notify DMV If the customer doesn’t sign for the letter, or if it is undeliverable, you may do the following: Send the original paperwork, along with either the proof of mailing or the entire letter, to your registration service. Attach a separate letter, on dealership letterhead, requesting a title-only to be issued, due to the lack of response from the customer. DMV will issue a title, thereby securing the lien. The dealership will have complied with all laws and will no longer be responsible for the registration of the vehicle. (Note that if the customer chooses to surrender their plates rather than pay the insurance penalties, your dealership cannot issue them plates from inventory later on. Only the dealership’s service provider or a DMV office can issue new plates once the suspension is served.)

If registration paperwork is rejected because of an insurance lapse on file for your customer, certain steps will ensure that your dealership can still secure liens on the financed vehicle, while complying with DMV’s 5-day rule: Notify the Customer Upon receiving the rejected paperwork, send a letter to the customer informing them about the insurance lapse and requesting that they: a) pay any fines or penalties owed to DMV so that the lapse can be removed; and, b) provide the dealership with the receipt they get fromDMV. The letter should state that if the customer does not address this in a timely manner, the vehicle will not be fully registered and a title-only will be secured. The customer will be responsible for obtaining full registration for the vehicle. Send the letter certified mail, return receipt requested; this will provide your dealership with proof of mailing, showing that you made every reasonable effort to contact the customer within the required five days for submitting registration and title paperwork to DMV. (It may take 1-2 weeks for your customer to provide your dealership with the clearance receipt from DMV.)

DMV-DIRECT PROCESSES DUPLICATE TITLES IN 3 DAYS DMV-DIRECT offers the fastest turnaround-time in the state for Duplicate Titles, at just three days. The process for requesting rush duplicate titles is quick and simple for both GNYADA members and non-members: • Have the customer sign a Duplicate Title Application (MV-902) • Copy the customer’s driver license • Have the customer sign an Authorization Letter on dealership letterhead authorizing the dealership to receive the duplicate title. All documents can be faxed to DMV-DIRECT at 718.508.4791. If there are no errors or omissions, the office will process rush duplicates that day and dealerships will receive Duplicate Titles within three days of the request. For copies of the necessary forms, call DMV-DIRECT at 718.747.0400.

DMV TRANSACTION RESTRICTIONS DMV-DIRECT offers the following reminders of actions that DMV prohibits dealers from taking, when processing customer transactions. Dealers may not: • Issue registration number plates to a vehicle that is classified as “wholesale” or “junk”. • Issue registration number plates to a person that has not purchased a vehicle from the dealer. • Issue registration number plates to a vehicle for which the dealer has issued and in-transit permit. • “Trade plates” between dealers or borrow plates that have been issued to another dealer. This also applies to exchanging plates with a store that is owned by the A Living Trust is a legal document that sets aside an individual’s assets (money, property, investments, etc.) during their lifetime. Those assets are then transferred to beneficiaries, designated by the Trust, at the time of the individual’s death. A customer may choose to register a vehicle through their Living Trust. In order to do this, the customer must present the dealership with the Trust document or a copy. The document must identify: - the name of the Trust holder; - the name of the Trustee who will inherit the vehicle — after the Trust holder dies or becomes incapacitated; - the name of the individual responsible for making sure all items in the trust are properly distributed, often the estate executor. REGISTERING A LIVING TRUST

same dealer principal or part of the same dealer group. DMV assigns plates to a specific facility number. • Apply for a title-only for a customer after plates and a temporary registration have already been issued for a vehicle. If the vehicle is subsequently stolen or badly damaged, or if the dealer is unable to obtain the documentation necessary to issue the permanent registration, contact DMV’s Dealer Unit at 518.473.8903 or DMV-DIRECT at 718.747.0400. • Refuse to transfer plates for a customer who has purchased another vehicle (provided the original vehicle’s registration is eligible for transfer to the new vehicle).

The document must also indicate whether it is a revocable trust or an irrevocable trust : - A revocable trust can be canceled or withdrawn by the original owner at any time. If a revocable trust is used to register a vehicle, the registration and title must be issued in the name of the trust and the executor. The insurance on that vehicle will need to be issued in the name of the trust. - Irrevocable trusts are “set in stone” and cannot be voided at any time, even by the original owner. When processing an application involving an irrevocable trust, the vehicle must be titled in the name of the trust and the successor who will inherit the vehicle. However, it may be registered in another name, and the dealership will need to secure insurance for that person.

News is published by a subsidiary of GNYADA, a not-for-profit organization representing franchised new car dealers in the New York metropolitan area. We are located at 18-10 Whitestone Expressway, Whitestone, NY 11357