RD305 - 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 eleven 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 3,400 dealer-related license transactions, nearly 23,000 salesperson license transactions and issue over 37,000 dealer tags.

Over 650 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.

Of the over 650 contacts made to our office per month, on average, 93 consumer emails are included in the monthly total. This is a 24% increase over the last biennial report period. 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 established a performance measure to ensure that email correspondence is replied to in a timely fashion. This measure, respond to 98% of all website email within three (3) business days, reported 94.4% of all emails during this report period are being responded to within the three day timeframe.

The Board has been very aggressive in monitoring dealer advertising as well as other dealer practices. The MVDB’s last biennial report documented a 56% decrease in the amount of civil penalties assessed for advertising. During the current reporting period, the Board assessed $1,500 in advertising-related civil penalties as a result of enforcement efforts. This is a 72% decrease in the amount assessed during the last report period. This continuing decline can be directly attributed to the educational efforts made by the MVDB Board and staff

Also, the Motor Vehicle Dealer Board has aided consumers defrauded by dealers by awarding a total of $235,577 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. This illustrates a 10% decrease from the last reporting period

When it comes to enforcing the laws, rules and regulations, the MVDB’s philosophy is “education first”. If educational efforts do not produce the desired outcomes, then we must use our enforcement authority. One enforcement tool available to the Board is to assess a civil penalty. In this reporting period, the MVDB collected nearly $87,000 in civil penalties from dealers. These penalties are deposited into the Transportation Trust Fund. In addition, the Board suspended one dealer’s licenses and revoked another.

Beginning in January of 2006, the Board implemented a two day class at Virginia Community Colleges that applicants for an original independent dealer certificate of qualification must successfully complete before they can take the certificate of qualification test. In the last six months of the reporting period, the Board issued mandates to four existing (“grandfathered”) dealer-operators to complete the course or face license suspension.

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.