Wheeling and Dealing - Buying and Selling Don’t Get Yourself in Trouble!
| 30 September 2007
Many members of the CRMC are regularly engaged in the buying, selling, swapping and trading of our favorite “rides”. That’s all well and good but there are some issues surrounding these activities I’d like you to be particularly aware of.
First, remember that North Carolina General Statutes allow an individual to sell only FOUR (4) motor vehicles within a period of 365 days! Once an individual has sold the 5th vehicle, the law views that person as a dealer! If caught selling without a license, you may be subject to misdemeanor charges and civil penalties of up to $5000.00 for each vehicle you sell over that magic number of 4! Please remember that there is no exemption for “collectors” of motor vehicles. The regulations exempt from licensure those “persons disposing of motor vehicles acquired for their own use or the use of a family member, and actually so used, when the vehicles have been acquired and used in good faith and not for the purpose of avoiding the provisions of (Chapter 20, NCGS)”. What this means is that you may purchase and subsequently re-sell a private passenger vehicle if it was 1) purchased for you or your family’s personal use; 2) was actually used; and 3) wasn’t purchased for the purpose of commercial re-sale. Otherwise, as that old saying goes, if it “walks like a duck and quacks like a duck, then it’s a DUCK”.
Secondly, let’s talk about damage disclosure and North Carolina laws. Chapter 20 of the General Statutes requires that ANY SELLER of a motor vehicle must disclose if the vehicle they are selling has a) damage exceeding 25% of fair market value; b) was or ever was a flood vehicle; c) was or ever was classified as a salvage motor vehicle; d) total theft recovery; or e) reconstructed. Failure to disclose any of this information constitutes a Class II Misdemeanor! That plus the fact that you may be sued for civil damages and if the plaintiff prevails, you will pay three times the damages as determined by the courts or $1500.00, whichever is greater. Further, you will also have the pleasure of paying the plaintiff’s attorney’s fees! Let me repeat here, this section of the NC Code of Laws applies to ANYONE who sells a motor vehicle to any other individual. This does not just apply to motor vehicle dealers!
So then, how do I stay out of trouble? In short, today’s marketplace is one of DISCLOSURE, DISCLOSURE, DISCLOSURE!. So long as you disclose to the purchaser the actual condition of the vehicle as known to you, you will be just fine. If you sell a vehicle that has been flooded and the purchaser clearly knows that fact, you’ll have no issues. It is simply when they don’t know that problems arise. So then! When you purchase from an individual, get a Damage Disclosure Form (MRV 181). Have that person sign it reflecting what they know about the condition of the vehicle. Maintain a copy of that form. Then when you sell or trade it to another Mustang fanatic, disclose what the prior owner said PLUS anything else you’ve discovered in the meanwhile. I strongly suggest the use of CarFax or AutoCheck databases to learn what you can about the vehicle’s history. When in doubt, spend a few bucks and have a NC DMV title search conducted.
I also endorse the use of a “non-guaranteed used car form” when engaged in casual sales between individuals. Federal law requires dealers to use a Buyers Guide but there is no such requirement for casual sales. I have provided the CRMC leadership with copies of both forms for distribution at the next monthly meeting.
Lastly, remember that odometer fraud is a FELONY. ‘Nuff said.
