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Changes to Dealers Licensing and Transaction Laws: Everything You Need to Know

Car dealer lot

A recently enacted bill modernizes the relationship between South Carolina's vehicle dealerships and the South Carolina Department of Motor Vehicles (SCDMV). This legislation brings about some significant changes for dealerships that affect their operating practices.

Act #51 of 2023, known as Senate Bill 549, was passed by the General Assembly and signed by Governor McMaster earlier this month. This legislation impacts a dealer's bond amount, the validity period of a dealer license, dealership locations, handling of customer complaints, and more.

Key Changes

Bond Amount Increase Effective from January 1, 2024, all licensed dealers (excluding motorcycle-only dealers) will need to increase their bond amount from $30,000 to $50,000 per licensed dealership. Motorcycle dealers must increase their bond from $15,000 to $25,000. The SCDMV will monitor these bond amounts electronically through the Automobile Liability Insurance Reporting (ALIR) system.

Dealer License Validity Period Dealer licenses will change from an annual to a three-year license beginning on January 1, 2024. The price of the dealer license will change from $50 annually to $150 every three years.

New Dealership Location Regulations From January 1, 2024, retail dealers and wholesalers cannot have dealerships in a residence, tent, temporary stand, or any other temporary quarters.

Customer Complaints Dealers who receive written complaints from the SCDMV will now have a set period (30, 45, or 60 days depending on the complaint nature) to address these complaints, beginning on January 1, 2024.

Dealer Performance Evaluation System This process, which assigns point values to various infractions, has now been officially codified in state law and will be effective from January 1, 2024. If a dealer accumulates points against their license, they can opt for a point reduction class.

Disqualifying Crimes The new law, effective from January 1, 2024, adds several crimes that may lead to a dealer's license being denied, suspended, or revoked. These include various violent crimes, drug-related crimes, crimes involving tax evasion or fraud, and more.

Electronic Vehicle Registration (EVR) Services Beginning January 18, 2024, all dealers must use an approved EVR service provider to complete dealer transactions and issue traceable temporary license plates at the point of sale.

Single 45-day Traceable Temporary License Plate Starting from January 18, 2024, the SCDMV will transition to a single 45-day traceable temporary license plate that must be issued by dealers at the point of sale via EVR.

For more detailed information on the changes, visit the source of the information.

What It Means for You

These new regulations aim to streamline operations, reduce fraudulent practices, and ultimately protect consumers. With the introduction of mandatory EVR services, the process of titling and registering vehicles should become smoother and more efficient. Using traceable temporary license plates also enhances safety on South Carolina roads by improving law enforcement's ability to identify vehicles.

For dealers, these changes signify a need to adjust business operations to comply with the law. Noncompliance can lead to penalties, suspension, or revocation of their license.

Consumers can now expect greater accountability from dealerships, with the assurance that complaints received by the SCDMV will be addressed promptly.