The Deal Jacket (Part 3)
Recommended Documents for the Deal Jacket
Now we will review some documents that are not required by the state or federal government but can help you during the sale and if an issue comes up after the sale.
- Test Drive Agreement. This document establishes the terms and conditions of a test drive and can be useful to law enforcement if a vehicle that leaves your lot as a test drive ends up being stolen.
- Vehicle history report including NMVTIS. We recommend that you provide your customer with as much information about the vehicle you are selling as you can. This sample vehicle history report also includes data from the National Motor Vehicle Title Information System. The NMVTIS data is crucial to making sure both you and your customer know about the vehicles title history including potential title brands from other states. NMVTIS data is available as a stand-alone report or as an add-on to a vehicle history report.
- Disclosure of known defects. This document is another tool for making full disclosure to your customer about your knowledge of the vehicle’s condition.
- Disclosure on Airbags. A dealer typically does not know the condition of the airbags in a used vehicle. This document discloses this fact and makes sure the customer knows that they may get the airbags inspected prior to sale.
- Vehicle Inspection Report. In order to be registered in Texas, a vehicle sold by a dealer must have completed a passing safety inspection in the 180 days prior to the sale. The VIR is provided by the licensed inspection station and may be required by some counties in order to register the vehicle.
- Recalls lookup. We highly recommend that you utilize the VIN lookup tool found in the link provided below to find out the status of any open safety recalls on each vehicle you sell. Print out the results, have the customer sign it, then give the customer a copy and keep a copy in the deal jacket. If a fix is available, we strongly recommend that you have the vehicle repaired prior to sale. At the very least, you must disclose known safety recalls.
- Odometer Disclosure. If a title is not present at closing, we recommend you use an odometer disclosure statement such as this to ensure your customer is fully aware of the mileage on the vehicle at time of sale. Keep in mind, if the vehicle is less than 20 years old and not otherwise exempt from the federal odometer disclosure law, the customer must still sign the back of the title. This document cannot be used in lieu of the customer signing the actual title.
- Arbitration Agreement. Many dealers choose to ask their customers to sign an arbitration agreement. The arbitration process is often more efficient and less costly for consumers and dealers than courtroom litigation.
- Warranty Disclaimer. If you sell a vehicle as-is, this document is recommended to specifically disclaim any warranties, specifically those of merchantability (or commercially reasonable) and fitness.
- OFAC search. Dealers are required to comply with the provisions of the Federal Patriot Act, one of which is to check the specially designated nationals list from OFAC to make sure you do not do business with a suspected terrorist. Many software systems include an OFAC compliance feature. You can also visit the website below, perform a search, print out the results and retain them in the deal jacket.