RD9 - 2002 Biennial Report of the Virginia Motor Vehicle Dealer Board

Executive Summary:
The 1995 General Assembly overwhelmingly adopted legislation to shift the regulation and oversight of the new and used motor vehicle dealer industry from the Department of Motor Vehicles, to a professional board as described below. Oversight and regulation of motorcycle, trailer and recreational dealers continues to be performed by DMV.

The Board consists of nineteen members for which the Governor, subject to confirmation by the General Assembly, appoints seventeen. In order to stagger appointments and ensure continuity, initially, eight members were appointed to two-year terms and nine were appointed to four-year terms.

The statute creating the Board stipulates that nine members shall be licensed franchise ("new") motor vehicle dealers, and seven members shall be independent ("used") dealers. Further, the statute requires that of the seven independent dealers, one shall be primarily engaged in vehicle rental, and one in the motor vehicle salvage business. The other three members include a consumer with no connection to the motor vehicle dealer industry; the Commissioner of the Virginia Department of Agriculture and Consumer Services and the Commissioner of the Department of Motor Vehicles, who serves as the Board's chairman.

Members of the Board represent all areas of the Commonwealth. In addition, they represent all levels of ownership. Board members include those that own several dealerships ("mega dealers") to those with small operations and just a few employees. This cross section ensures that all perspectives of the industry have a voice on the Board.

The primary focus of the Motor Vehicle Dealer Board, as mandated by Virginia statute (Chapter 15 of Title 46.2), is to regulate new and used car dealers including certifying and licensing dealers and salespersons. Additionally, the MVDB administers the Motor Vehicle Transaction Recovery Fund (MVTRF), handles consumer complaints regarding motor vehicle dealers, monitors dealer advertising, and schedules hearings.

Organizationally, the Board staff is divided into two functional areas: Field Operations and Headquarters Operations. The field operations consist of a supervisor and twelve field representatives who work out of their "home-offices" located throughout the Commonwealth. Educating dealers, salespersons and consumers is the primary focus of the field representatives. Enforcement becomes necessary only after continued, blatant disregard for laws.

The number one priority of the Dealer Board Headquarters Operations is to process initial and renewal applications of our licensees (dealers and salespersons). This work constitutes the highest volume and work effort of the Headquarters staff. As part of the licensing process, the Board issues dealer license plates and renewal decals as directed by DMV. In a typical year, the agency will process about 3,000 dealer-related license transactions, about 20,000 salesperson license transactions and issue over 71,000 dealer tags.

About 400 consumers, most by telephone, contact the Board staff each month to request mediation or assistance solving a problem concerning a dealership. This has proven to be a very successful program as most situations can be resolved with the introduction of mediation and a clear understanding of the problem by all parties involved.

Board staff also receives approximately 40 consumer emails a month. These emails range from request for information to assistance in solving issues with dealers. Consumers contact Board staff via an email address establish on the MVDB website. Once received, Board staff review the email and respond accordingly.

The MVDB has also established a modified executive agreement (performance measure) to ensure correspondence is replied to in a timely fashion. This measure, respond to 98% of all website email within three (3) business days, reported 100% of all emails during the first quarter of FY03 are being responded to within the three-day timeframe. Prior to the modification, the measure read "respond to 98% of all website email within three (5) business days," and response time was tracked during this biennial period. For FY01, overall performance was rated at 94.3%. However, overall performance peaked to 99.7% during FY02.

The Board has been very aggressive in monitoring dealer advertising as well as other dealer practices. During this report period, the Board has assessed $12,500 in civil penalties as a result of enforcement efforts. Penalties collected were deposited into the Transportation Trust Fund.

Also, the Motor Vehicle Dealer Board has aided consumers defrauded by dealers by awarding a total of $166,505 during this report period from the Motor Vehicle Transaction Recovery Fund (MVTRF), which is funded through assessments paid by all dealers and salespeople at the time their license is initially issued and as well as when it is renewed. It was during this report period that the General Assembly voted to increase award amount to the consumer from $15,000 to $20,000 from the Recovery Fund.

Lastly, the Motor Vehicle Dealer Board is self-sufficient and is funded by fees paid by dealers. These fees cover all of the expenses of the Board.