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7.2 Vehicle History Disclosure
Vehicle history disclosure goes beyond just damage and re-manufactured status. You must disclose the vehicle’s prior use if you know or reasonably should know what it was. Prior use categories that trigger disclosure obligations include: former rental vehicle, former fleet vehicle, former taxi or rideshare vehicle, former police or emergency vehicle, former government vehicle, and any other prior use that would be material to a buyer’s decision.
Why does prior use matter? Because it affects the vehicle’s value and desirability. A vehicle that was used as a taxi may have been driven hard and put through heavy stop-and-go traffic. A former rental car may have been driven by hundreds of different people with varying levels of care. A former police vehicle may have been idled extensively and driven aggressively. Buyers have a right to know about these prior uses so they can make informed decisions.
The National Motor Vehicle Title Information System — NMVTIS — is a federal database that consolidates title information from states, insurance companies, and salvage yards. As a dealer, you should be checking NMVTIS (or equivalent vehicle history report services) for every vehicle you acquire for resale. This isn’t just a good business practice; it’s a tool that helps you fulfill your disclosure obligations. If a vehicle history report reveals prior salvage history, title brands, odometer discrepancies, or other red flags, you need to investigate further and disclose accordingly.
California also requires specific disclosures for certain prior uses. For example, if you’re selling a vehicle that was used as a law enforcement vehicle, you must make that disclosure in writing. The same applies to vehicles that have been repurchased by a manufacturer under a lemon law buyback — those vehicles carry a specific title brand, and the buyback history must be disclosed to subsequent purchasers.