7.1 Condition of Vehicle: Known Damage, Re-manufactured INSTRUCTOR SCRIPT: As a dealer, you have an affirmative obligation to disclose known material facts about the condition of every vehicle you sell. This isn’t just about being honest — though it is that too — it’s a legal requirement. If you know a vehicle has been in a significant accident, has frame damage, has flood damage, has been re-manufactured, or has any other material condition that would affect a reasonable buyer’s decision to purchase, you must disclose it. The key word is “known.” You must disclose what you know. Now, the question becomes: what are you expected to know? As a professional dealer, you are held to a higher standard than a private party seller. You’re expected to conduct reasonable inspections of the vehicles you sell. If a vehicle shows obvious signs of prior damage — mismatched paint, uneven panel gaps, welding marks on structural components — and you didn’t notice because you never looked, a court may find that you “should have known” and treat it the same as actual knowledge. Re-manufactured vehicles — sometimes called rebuilt or reconstructed vehicles — carry specific disclosure obligations. If a vehicle’s title is branded as salvage, rebuilt, or re-manufactured, that brand must be disclosed to the buyer in writing. Simply hoping the buyer notices the brand on the title isn’t sufficient. You must affirmatively disclose it. The disclosure should be on a separate form that the buyer signs, acknowledging that they’ve been informed of the vehicle’s title status. 💡 Real-World Example A dealer purchases a vehicle at auction that looks clean — nice paint, good interior, runs well. The dealer doesn’t run a vehicle history report. The dealer sells it to a customer, who later discovers the vehicle was declared a total loss after a flood in another state. The title was “washed” — the salvage brand was removed when the vehicle was re-titled in a state with less rigorous title branding laws. The customer sues the dealer for failure to disclose. Even though the dealer didn’t know about the flood damage, the court may find the dealer was negligent for failing to run a basic vehicle history check — something a reasonably prudent dealer would do.

7.2 Vehicle History Disclosure

7.3 Odometers

7.4 Duty to Record Mileage

7.5 Unlawful Actions

7.6 Repossessed Vehicle Odometer Disclosure

7.7 Signatures

7.8 REG 262 Form (Vehicle/Vessel Transfer Form)

7.9 Division 12 Safety Equipment

7.10 Leased Vehicles / Wholesale between Dealers

Section 7: Quiz