OIADA Applauds New Law for Mandated Training Before Used Dealers Receive License
By Nick Zulovich, Editor
June 06, 2012
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COLUMBUS, Ohio — Jim Mitchell wanted to witness Ohio Gov.
John Kasich sign Senate Bill 245 into law earlier this week since the
legislation eight years in the making is aimed at assisting independent dealers
in becoming successful.
The executive director the Ohio Independent Auto Dealers Association cheered the passage of the measure that mandates dealers must go through at least six hours of training before obtaining a used-car dealer license.
"For the used-car dealer very simply what it means is any new dealer wishing to sell cars in Ohio now has the opportunity to learn what the laws are and what the requirements are before they get their license," Mitchell told sister publication Auto Remarketing on Tuesday.
"Up until this point, no one has taught them a thing," he continued. "They just took their money and gave them a license. There were no seminars, no educational programs, nothing for all of these individuals in the past who were issued a license. They were just given one, and that was it."
The law goes into effect on Sept. 4, and Mitchell highlighted several elements for the measure to reach this point.
First off, the regulation does not involve Ohio franchised dealers. Mitchell indicated that dealer principals have to undergo a large amount of training through the parent automaker before ever obtaining a franchise location, so they have been excluded from the scope of SB 245.
Furthermore, individuals who hold a salvage motor vehicle auction license or a motor vehicle auction license are exempt from the training required in this law. Mitchell explained to Auto Remarketing why this stipulation was made.
"In the state of Ohio, all auto auctions have to have a used-car license because there are times when the auctions will buy a car back from a dealer who may have just purchased one and is not happy with it," Mitchell said. "So there are times when the auction must take ownership of that vehicle and then turn around and sell it. In Ohio, if you have more than five causal sales a year, you must have a license."
Mitchell admitted Ohio's auction community initially was leery about SB 245 because these operations only conduct wholesale transactions, not retail deals. But Mitchell said amendments were added so auctions only had to abide by the "procedures and laws on that side of the business."
Mitchell indicated that the measure passed unanimously through Ohio's Senate and received strong majority support from both sides of the aisle in the House.
Now that the law has been signed, it falls on Mitchell and OIADA to craft the training program with the state's Department of Motor Vehicles.
Mitchell indicated that his recommendation is going to be for the association to hold mandated license training sessions biweekly at OIADA's education center in Columbus. He contends an average of 13 to 15 individuals each week apply to be an independent dealer in Ohio.
"Given those figures, we want to be able to do it quickly so we don't in any way cause a drag in the time it takes them to get a license," Mitchell stressed.
"Columbus, in our opinion, is centrally located. The training center across the hall from our office and we've been doing seminars there for the past two and half years. Whether they're coming from Toledo, Cleveland, or what have you, they will all be traveling about the same distance."
The current membership size of OIADA is a little less than 700, but Mitchell thinks about that many stores go out of business annually in Ohio. He believes there are two primary reasons why: either the store runs into legal trouble or it's undercapitalized.
Mitchell hopes this mandated training gives new independent store owners a foundation of the legal regulations they must follow as well as a glimpse to the financial elements necessary to have a successful dealership.
"There are a lot of laws that you must comply with and the problem is very few of them know this," Mitchell continued. "It's going to benefit everybody. It's going to benefit the consumer also because hopefully these dealers will learn the right way of doing things so the consumer is not caught holding the short end of the stick because the didn't know he wasn't allowed to do something.
"Of course the dealers will be better business people and that's what it's all about. As long as the dealers are successful, everybody benefits," Mitchell concluded.
More details about Ohio's new law for used-car dealer licenses can be found on the state's legislative webpage here.
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