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ON-LINE MOTOR VEHICLE SALES IN TEXAS

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Policy and purpose of the Texas Motor Vehicle Board is to prevent frauds, unfair practices, discriminations, impositions and other abuses of our citizens.

Laws in effect now that regulate motor vehicle sales are appropriate and valid to be applied to sales on the Internet

The Internet does not abolish State Laws

Texas DOES allow motor vehicle sales over the Internet… IF Seller is duly licensed

During the days of the Internet “bubble” online companies tried to sell cars over the Internet.

Promoted Perceptions of:

Avoid the Car Salesman:

JD Powers says that 60% of new-vehicle buyers shop on-line, but only 5% of those shoppers purchase through an online buying service.

Are dealers anti-Competitive?

“Price differences between low and high sales transactions are the result of consumer behavior, not monopoly power. Simply stated, consumers who do their homework always have and always will be able to negotiate a better deal. The Internet does not change that fundamental rule of economics,..

But it does greatly lower the cost and effort of gathering information.”

Dealer vs. Dealer

Dealer vs. Non-Dealer

Problems with Unlicensed Dealers

Consequence of not passing titles -- no taxes or fees collected

Even if licensed, Internet presents unique problems

Texas Consumer complaints received on Internet purchases in 2003 (6 months) up 88% over complaints received in all 12 months of 2002

Actual Case in Point….

-Bought cars at auction, took digital picture, put on EBay, or “reasonable facisimile”

-No titles were in hands of dealer when cars sold

-No Vehicle Inventory taxes collected (ad valorem)

-Not fully disclosing condition of vehicles

As a result of our dialogue with Ebay..

Validate and identify licensed dealers

Possible remedies?

License by individual, not entity

Require VINs on all Internet ads

Author: Carol Kent

NCSL Contact : jo.anne.bourquard@ncsl.org

CTIC Home Page: http://www.ncsl.org/standcomm/sctech/sctech.htm

Other information:
"Electronic Commerce: Consumer Protection vs Anti-competitive Barriers"
2003 Annual Meeting
San Francisco, California
July 2003

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