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Wisconsin Administrative Code › Department of Transportation › Chapter Trans 138 - Dealer Facilities, Records, And Licenses › Section Trans 138.028 - Retail auctioneers; limited exemption

Current through June 24, 2024
Notwithstanding s.
				Trans
				138.025, a retail auctioneer selling motor vehicles
				may conduct business without a motor vehicle dealer license, provided the
				retail auctioneer meets all of the following requirements:
(1) None of the vehicles offered at auction
			 are owned by a motor vehicle dealer, wholesaler, manufacturer, or other
			 licensee under ch. 218, Stats.
(2)
			 Each auction is clearly distinct in place and date and meets at least one of
			 the following conditions:
(a) It includes
			 only those vehicles owned by a single person, where person means an individual,
			 household, association, firm, or corporation including its subsidiaries and
			 divisions; or,
(b) The auction
			 includes no more than 3 motor vehicles.
Note:
For example, an auctioneer may not need a
				dealer license when the auction only involves vehicles owned by one individual,
				corporation, or other "person." If the auction includes vehicles owned by 2 or
				more persons, the auctioneer or auction company usually needs a dealer license.
				The only exception occurs in very small consignment auctions, where no more
				than 3 vehicles are offered for sale at a single auction.
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 138 - Dealer Facilities, Records, And Licenses › Section Trans 138.03 - Dealer business facilities

Current through June 24, 2024
(1) Business
			 facilities required to be provided and maintained by motor vehicle dealers are:
(a) A permanent building in this state
			 wherein there are facilities for:
1. A
			 business office to maintain the books, records, and files necessary to conduct
			 business.
2. A minimum 12 x 20 foot
			 area accessible for automobile display, pre-sale preparation, or repair
			 purposes. Motorcycle dealers who do not also sell automobiles shall provide an
			 area of sufficient size to display, prepare, or repair at least 3 units. Truck
			 dealers who do not sell automobiles are exempt from the requirements of this
			 subdivision.
3. A repair shop, or a
			 service agreement with a nearby repair shop, where there are repair tools,
			 repair equipment and personnel to service such vehicles. Any service agreement
			 shall be on the form provided by the department.
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 138 - Dealer Facilities, Records, And Licenses › Section Trans 138.05 - Auction dealers

Current through June 24, 2024
(1) For each vehicle offered for sale, either
			 require the consigning dealer deposit clear title or furnish title insurance at
			 time of sale.
(2) Prominently
			 display the selling dealer's name and address, and state in which the vehicle
			 is titled, on each vehicle offered for sale, prior to each vehicle entering the
			 auction sale building. Recommended methods are either affixing the information
			 on the side window by grease pencil, or entering the information on a card
			 plainly visible through either the windshield or side window.
(3) Maintain a copy of the signed title for
			 each vehicle sold.
(4) For each
			 motor vehicle sold at an auction sale, establish and maintain for 5 years those
			 records as required under s.
			 Trans
			 154.12(3) as authorized under s.
			 342.157,
			 Stats.
(5) Rescind the vehicle sale
			 transaction if unable to furnish clear title to the purchasing dealer within 14
			 days following date of sale, if so requested by the purchasing
			 dealer.
(6) Required records shall
			 be kept in the place of business during business hours and shall be open to
			 inspection and copying by a representative of the department during reasonable
			 business hours.
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 138 - Dealer Facilities, Records, And Licenses › Section Trans 138.06 - Business signs

Current through June 24, 2024
All motor vehicle dealers, motor vehicle wholesalers and motor
				vehicle wholesale auction dealers shall display the following signs:
(1) An exterior business sign in compliance
			 with s.
			 100.18(5),
			 Stats. The sign shall state the name of the licensee, as shown on the
			 department license and any other name under which the licensee does business as
			 a motor vehicle dealer, wholesaler or auction dealer. The sign shall have
			 lettering a minimum of 4 inches high, unless smaller dimensions are required in
			 order to comply with a local zoning or sign ordinance.
(2) A sign posted on or adjacent to the
			 entrance door describing the dealer's business hours.
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 138 - Dealer Facilities, Records, And Licenses › Section Trans 138.07 - Lease agreement

Current through June 24, 2024
(1) Motor vehicle dealers and wholesalers
			 shall furnish a copy of a signed lease agreement with the dealer license
			 application whenever first applying for a license for a business location,
			 unless the business property is owned by the dealership entity.
(2) Such lease agreement shall name the
			 dealer applicant as lessee and shall contain the following items:
(a) Names of parties to the
			 agreement;
(b) Consideration for
			 lease agreement;
(c) Description of
			 business premises;
(d) Terms of
			 lease; and
(e) Signatures of
			 parties to the agreement.
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 138 - Dealer Facilities, Records, And Licenses › Section Trans 138.08 - Temporary sales locations

Current through June 24, 2024
A motor vehicle dealer shall be permitted to display and sell
				vehicles at a temporary site other than its licensed place of business,
				providing that:
(1) Each dealer
			 furnishes the department with written notification of the sale at least 10 days
			 in advance.
(2) The duration of
			 each sale may not exceed 10 business days.
(3) A dealer may not participate in more than
			 6 sales during each licensing (calendar) year.
(4) Each participating dealer shall furnish
			 each consumer a written notice of the 3-day "cooling off" rights pursuant to s.
			 423.203,
			 Stats., (The Wisconsin Consumer Act).
(5)
(a)
Permanent facilities required.
The dealer maintains a
			 permanent facility in this state in the manner required by s.
			 Trans 138.03(1)
			 (a), except as provided in par. (b).
Note:
Dealers without permanent facilities in the
				state may not conduct any sales in this state, including sales at temporary
				locations, except as provided in s.
				Trans
				138.03(6).
(b)
Motor home exemption.
The department may exempt a dealer from the facility requirement in par. (a),
			 but not from any other requirement of state law, if the dealer is selling motor
			 homes at a rally or show sponsored by an established state, national or
			 international motor home or camping association with a minimum membership of
			 100 members. An exemption under this paragraph may not be granted by the
			 department more than once in any 4-year period. Any license issued by the
			 department containing the exemption described in this paragraph shall be
			 limited to one specific event and may not exceed 10 days duration. An exemption
			 granted under this paragraph will not exempt a dealer from geographic sales
			 restrictions contained in a dealer franchise agreement or other private
			 contractual obligation.
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 138 - Dealer Facilities, Records, And Licenses › Section Trans 138.09 - Effect of suspension, denial, revocation or voluntary surrender of license

Current through June 24, 2024
(1) SUSPENSION.
(a) No motor vehicle dealer may sell, offer
			 to sell, or buy vehicles while the dealer's license is suspended.
(b) A motor vehicle dealer also engaged in
			 business activities on the same premises which do not require a license issued
			 by the department, such as the sale of motor vehicle accessories or repair of
			 motor vehicles, may continue to conduct this unlicensed business while the
			 dealer's license is suspended. However, if such activities are conducted within
			 the indoor facilities the dealer ordinarily uses to display motor vehicles
			 offered for sale or lease with an option of purchase, then during the
			 suspension all motor vehicles offered for sale or lease shall either be removed
			 from those facilities or moved to a location in those facilities not accessible
			 to consumers.
(c) No licensed
			 salesperson may be present at the dealership during the period of suspension,
			 without the written permission of the department. The department may not grant
			 permission unless the particular conditions of the salesperson's employment
			 require the salesperson's presence to perform duties unrelated to the
			 activities regulated by the department under ch. 218,
			 Stats.
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 139 - Motor Vehicle Trade Practices › Section Trans 139.01 - Purpose and scope

Current through June 24, 2024
(1) STATUTORY AUTHORITY. As authorized by ss.
			 110.06,
			 218.0152,
			 and
			 227.11,
			 Stats., the purpose of this chapter is to establish the department's
			 administrative interpretation of ss.
			 218.0116(1)
			 (cm), (e), (gm), (im) 2., (j), and (km),
			 218.0141, and
			 218.0146, Stats.,
			 relating to motor vehicle trade practices.
(2) APPLICABILITY. This chapter applies to
			 any person applying for or holding a Wisconsin motor vehicle salvage dealer,
			 manufacturer, distributor wholesale auction, dealer or salesperson
			 license.
(3) This chapter applies
			 to any sale or lease of a vehicle by a dealer to a person within the state of
			 Wisconsin if the vehicle is delivered within the boundaries of this state
			 notwithstanding any contractual agreement between the dealer and person to the
			 contrary.
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 139 - Motor Vehicle Trade Practices › Section Trans 139.02 - Definitions

Current through June 24, 2024
Words and phrases defined in ss.
				340.01
				and
				342.01,
				Stats., apply to this chapter unless a different definition is specified. In
				this chapter:
(1) "Business use" means
			 any motor vehicle owned or leased by either of the following:
(a) A company, other than a lessor.
(b) An individual and primarily operated for
			 business use.
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 139 - Motor Vehicle Trade Practices › Section Trans 139.03 - Advertising and sales representations

Current through June 24, 2024
(1) TRUTHFUL. The
			 use of false, deceptive or misleading advertising or representations by any
			 licensee to induce the purchase of a motor vehicle constitutes an unfair
			 practice and is prohibited.
(2)
			 FACTUAL.
(a) Any licensee, making any
			 statement of fact to the public in any advertisement or written statement or
			 representation concerning the motor vehicles it offers for sale, the services
			 it provides or other aspects of its business operation, shall possess detailed
			 evidence of the validity and accuracy thereof, which evidence shall be
			 furnished to the department upon request.
(b) Terms such as "largest" when referring to
			 dealership size shall be based solely on vehicle sales volume and shall clearly
			 state the basis for the claim, including vehicle make, time period if other
			 than entire prior 12 months and geographic area if other than statewide, in the
			 advertisement. Each vehicle make shall be considered separately in determining
			 new vehicle sales volume.
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 139 - Motor Vehicle Trade Practices › Section Trans 139.035 - Unfair trade practices

Current through June 24, 2024
(1) For purposes of
			 this section, "bird-dogging" means an arrangement by a dealer or salesperson
			 that provides consideration of any kind to a third party for sales leads,
			 contingent upon a sale of a vehicle.
Note: Bird-dogging is also known as referral selling.
(2) Engaging in bird-dogging is an
			 unfair trade practice and is prohibited.
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 139 - Motor Vehicle Trade Practices › Section Trans 139.04 - Disclosure of the condition of the motor vehicle

Current through June 24, 2024
(1) MODEL YEAR
			 DESIGNATION.
(a) Changing the model year of a
			 motor vehicle is an unfair practice and prohibited. If no model year is
			 designated, the year of manufacture applies.
(b) Both the chassis model year when
			 determinable and the finished vehicle model year shall be stated on the
			 Wisconsin buyers guide and the motor vehicle purchase contract if the model
			 year of a motor vehicle chassis is different than the model year of the
			 finished vehicle, as designated by the converter-manufacturer or final stage
			 manufacturer under the provisions of s.
			 Trans
			 137.06(5) (a).
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 139 - Motor Vehicle Trade Practices › Section Trans 139.05 - Motor vehicle purchase contract

Current through June 24, 2024
(1) USAGE. All
			 dealer and salesperson licensees shall furnish retail purchasers with a copy of
			 a document clearly entitled "Motor Vehicle Purchase Contract" that clearly
			 notifies the prospective retail purchaser on its face that the purchaser is
			 making an offer to purchase that shall become a binding motor vehicle purchase
			 contract if accepted by the dealer licensee, that the dealer licensee shall
			 accept or reject the offer within 2 working hours or the offer is automatically
			 voided and that the offer or may rescind the offer unless and until accepted by
			 the dealer licensee. Until acceptance or rejection of the offer, the licensee
			 shall be prohibited from selling the vehicle to any other party.
(a) An exact copy of the motor vehicle offer
			 to purchase shall be provided to the purchaser at the time the offer is signed
			 by the purchaser except in the case where the offer has not left the presence
			 of the purchaser and is accepted by the dealer in the presence of the
			 purchaser. In addition, whenever a motor vehicle offer to purchase is signed
			 and accepted by a dealer, becoming a binding motor vehicle purchase contract,
			 an exact copy of the purchase contract shall be provided to the purchaser. Any
			 changes to the offer to purchase after signing by the purchaser, or to the
			 purchase contract subsequent to dealer acceptance, shall be made in one of the
			 following manners:
1. All parties shall
			 notate and initial all copies of the original documents.
2. A motor vehicle dealer shall prepare a
			 replacement contract indicating that it replaces the original contract
			 documents. The motor vehicle dealer shall retain the original contract
			 documents in the manner required by s.
			 Trans
			 138.04(1) (e). Making material
			 changes to the replacement contract without direct oral disclosure of those
			 changes to the purchaser is an unfair sales practice.
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 139 - Motor Vehicle Trade Practices › Section Trans 139.055 - Financing

Current through June 24, 2024
(1) DEALER ARRANGED FINANCING.
(a)
Notice to consumer regarding
			 ineligibility for financing.
If a motor vehicle purchase contract
			 becomes binding upon the purchaser contingent upon the motor vehicle dealer
			 providing financing on terms disclosed to the purchaser in advance of the
			 execution of the purchase contract, the contract shall provide that if the
			 dealer is unable to provide such financing, the contract shall be rescinded if
			 the dealer provides notice to the purchaser within 14 days of the contract date
			 that dealer financing is unavailable. If the dealer fails to timely provide
			 such notice, the purchaser may elect to carry out the contract and the dealer
			 shall, within 28 days of the contract date, finance the purchase of the vehicle
			 on the terms specified in the contract and deliver the vehicle in the manner
			 specified in the purchase contract.
(b)
Establishing credit terms between
			 the contract date and delivery date for a vehicle.
With respect to a
			 contract to purchase a motor vehicle that is contingent on the motor vehicle
			 dealer arranging financing for the motor vehicle that is acceptable to the
			 purchaser, a dealer may, subsequent to the contract date and prior to the
			 purchaser accepting delivery of the motor vehicle, provide the customer with
			 notice that the dealer has arranged financing for the vehicle for which the
			 customer is qualified. If the transaction is a consumer transaction, the notice
			 shall include all disclosures of the terms of the arranged financing that are
			 required by the federal truth-in-lending act including the amount to be
			 financed, the annual interest rate, total principal and interest payments, and
			 the monthly interest and principal payment due over the course of the loan. The
			 notice shall state that the purchaser has 7 days to accept or reject the
			 proposed financing. If the purchaser accepts the proposed financing, the
			 financing contingency of the contract shall be deemed satisfied and the dealer
			 shall be bound to provide financing on the terms set forth in the notice. If
			 the purchaser rejects the proposed financing but waives the financing
			 contingency, the financing contingency shall be deemed waived and the purchaser
			 shall be bound to the contract without regard to whether the purchaser is able
			 to secure financing. If the purchaser fails to respond to the notice within 7
			 days or rejects the proposed financing and does not waive the financing
			 contingency, the purchase contract shall be rescinded.
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 139 - Motor Vehicle Trade Practices › Section Trans 139.06 - Warranties

Current through June 24, 2024
For the purpose of this chapter, service contracts are not
				considered warranties, but for the purposes of disclosure and performance as
				provided in subs. (1) through (7) and in sub. (10), the term "warranty" shall
				include service contracts.
(1)
			 CONTENTS. If a sale of a motor vehicle by a licensee is made subject to a
			 warranty, the warranty shall be in writing and shall be provided to the
			 purchaser at the time of delivery of the vehicle and shall include the
			 following items:
(a) Clear identification of
			 the names and addresses of the warrantors.
(b) Clear identification of the purchaser to
			 whom the warranty is extended.
(c)
			 Parts covered. Use of the terms "power train" or "drive train" to describe
			 parts or systems covered is prohibited.
(d) Exceptions and exclusions from the terms
			 of the warranty.
(e) A statement of
			 what the warrantor shall do in the event of a defect or malfunction, at whose
			 expense and for what period of time.
(f) A statement of what the purchaser shall
			 do and expenses the purchaser shall bear.
(g) The procedure the purchaser should take
			 in order to obtain performance of any obligation under the warranty, including
			 the identification of any class of persons authorized to perform the
			 obligations set forth in the warranty.
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 139 - Motor Vehicle Trade Practices › Section Trans 139.07 - Satisfaction of liens

Current through June 24, 2024
When a dealer accepts a vehicle in trade that is subject to an
				outstanding lien and agrees in the purchase contract to pay off the balance due
				the lien holder, the dealer shall pay the amount stated in the purchase
				contract due the lien holder, after any adjustments for any estimated trade-in
				lien payoff amounts pursuant to s.
				Trans
				139.05(8g) within 14 days of taking
				delivery of the trade-in vehicle. The dealer shall be responsible for any
				interest that accrues, penalties assessed, late fees, or other charges made on
				the debt secured by the lien to the extent those penalties, fees or other
				charges result from the dealer delaying payment of the amount stated in the
				purchase contract to be due the lien holder beyond 14 days of taking delivery
				of the trade-in vehicle.
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 139 - Motor Vehicle Trade Practices › Section Trans 139.08 - Consignment vehicles

Current through June 24, 2024
(1) A dealer shall comply with all the
			 requirements of this section with respect to any vehicle it sells on a
			 consignment basis. Consignment sales include any arrangement by which a dealer
			 displays or sells a vehicle on behalf of a person other than the
			 dealer.
(2) No dealer may accept
			 delivery of or display a consignment vehicle for sale until all of the
			 following requirements have been met:
(a)
			 Dealer enters into a written consignment agreement with the consignor
			 specifying the terms of the consignment agreement. A consignment agreement for
			 the sale of a vehicle that is not owned by the consignor for personal, family
			 or household purposes between a dealer and a person shall include a provision
			 that the consignor retains a security interest in the vehicle in the amount of
			 the proposed sale price of the vehicle. A consignment agreement for sale of
			 goods owned by the consignor for personal, family or household purposes shall
			 include a provision that the consignor retains ownership of the
			 vehicle.
(b) In a transaction
			 involving goods owned by the consignor for purposes other than personal, family
			 or household purposes, the dealer prepares and executes a U.C.C. financing
			 statement naming consignor as a secured party and files the U.C.C. financing
			 statement with the department of financial institutions. This paragraph does
			 not apply to a consignment vehicle sale through a salvage pool or wholesale
			 auction. The financing statement shall be prepared and filed so as to properly
			 perfect the consignor's security interest. The cost of filing the financing
			 statement may be charged to the consignor.
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 140 - Motor Vehicle Dealer Financial Eligibility And Bond Claim Requirements › Subchapter I - Dealer Security and Financial Eligibility Requirements › Section Trans 140.01 - Purpose and scope

Current through June 24, 2024
(1) STATUTORY AUTHORITY. As authorized by ss.
				218.0152,
				218.25, and
				227.11,
				Stats., the purpose of this chapter is to establish the department's
				administrative interpretation of ss.
				218.0114(4),
				(5), (20), (22),
				218.0116(1)
				(a) and (d), Stats., relating to the security
				requirements and financial qualifications of motor vehicle wholesaler, dealer,
				and salesperson license applicants, s.
				218.11(3)
				and (6) (a) and (g), Stats., relating to the
				financial qualifications of mobile home dealer license applicants to engage in
				the sale of recreational vehicles, and ss.
				218.21(1),
				(1m), (4) and (6), and
				218.22(1)
				and (3) (a) and (g), Stats., relating to the
				financial qualifications of motor vehicle salvage dealer license applicants,
				and s.
				218.41(2) (c) and (3)
				(a), Stats., relating to the financial
				qualifications of moped dealer license applicants.
(2) APPLICABILITY.
(a) This chapter applies to any sole
				proprietorship, partnership or corporate entity applying for or holding a
				Wisconsin dealer's license under any of the statute sections cited in sub.
				(1).
(b) The provisions of subch.
				II apply to all applicants for a license issued by the department under ch.
				218, Stats., and to all such licensees, who furnish a bond or letter of credit
				pursuant to s.
				218.0114(5)
				or (20),
				218.11(3)
				or (6) (g),
				218.21(4)
				or (6), or
				218.33(1),
				Stats. The provisions of subch. II also apply to all sureties and financial
				institutions that issue such bonds or letters of credit, and to all claimants
				against such bonds or letters of credit.
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 140 - Motor Vehicle Dealer Financial Eligibility And Bond Claim Requirements › Subchapter I - Dealer Security and Financial Eligibility Requirements › Section Trans 140.02 - Definitions

Current through June 24, 2024
(1) "Asset" means anything of value owned by
				the corporation, limited liability company, partner or sole
				proprietor.
(2) "Current assets"
				means cash and assets, including trade or investment items, which may be
				readily converted into cash in the ordinary course of business within one year
				from the date of the balance sheet and include, but are not limited to, cash
				and equivalent, customer and factory receivables, inventories, last in first
				out reserves and marketable securities.
(3) "Current liabilities" means liabilities
				which are due and payable within one year from the date of the balance
				sheet.
(4) "Discounted" means an
				asset which is not considered at full value when determining the financial
				statement net worth.
(5) "Financial
				institution" has the same meaning as found in s.
				705.01(3),
				Stats.
(6) "Financial statement"
				means a balance sheet showing assets, liabilities, and net worth on a fixed
				date.
(7) "Intangible asset" means
				an asset which does not have a readily determined value, such as goodwill, and
				is not generally offered for sale.
(8) "Letter of credit" means an irrevocable
				instrument issued by a financial institution guaranteeing payment on behalf of
				its customer to a beneficiary for a stated period of time and when certain
				conditions are met.
(9) "Liability"
				means an obligation to pay money or other assets or to render a service to
				another person.
(10) "Major
				liability" means a liability equal to or greater than 10% of the total
				liabilities listed on the financial statement.
(11) "Net worth" means the difference between
				the asset and liability values on a balance sheet. Negative net worth is the
				excess of liabilities over assets.
(12) "Pro-forma statement" means a financial
				statement that presents information that anticipates some event or events which
				will occur in the future.
(13)
				"Recreational vehicle dealer" has the same meaning as found in s.
				Trans
				142.02(7).
(14) "Substantial portion of the assets"
				means a value greater than 30% of all assets.
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 140 - Motor Vehicle Dealer Financial Eligibility And Bond Claim Requirements › Subchapter I - Dealer Security and Financial Eligibility Requirements › Section Trans 140.022 - Security; forms and types

Current through June 24, 2024
(1) FORMS OF
				SECURITY. The only acceptable forms of security to fulfill the security
				requirements of ss.
				218.0101 to
				218.0163, Stats.,
				are as follows:
(a)
Surety
				bonds.
The bond shall be filed on a form prescribed by the department
				and issued by a bonding company licensed by this state and acceptable to the
				department. The bond shall be payable in the name of the department for the
				benefit of any person who sustains a loss because of an act of the licensee
				constituting grounds for the suspension or revocation of a license under ss.
				218.0101 to
				218.0163, Stats.
Note:
Under ss.
				  632.14
				  to
				  632.18,
				  Stats., surety insurance is regulated by the Commissioner of Insurance.
(b)
Letters of
				credit.
The letter of credit shall be filed on a form prescribed by
				the department and issued by a financial institution acceptable to the
				department. The issuer shall waive the right to revoke the credit before its
				expiration date, which shall be no earlier than 3 years after the last day of
				the period covered by the letter. The letter of credit shall be payable in the
				name of the department and upon a written statement by the department that one
				or more persons have sustained a loss because of acts by the licensee
				constituting grounds for the suspension or revocation of a license under s.
				218.0116,
				Stats.
Note:
These forms may be obtained by contacting
				  the Dealer Section's Business Licensing Unit at (608) 266-1425.
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 140 - Motor Vehicle Dealer Financial Eligibility And Bond Claim Requirements › Subchapter I - Dealer Security and Financial Eligibility Requirements › Section Trans 140.028 - When financial information is required

Current through June 24, 2024
(1) The department
				may require a motor vehicle dealer or any other business licensed under ch.
				218, Stats., or any applicant for such licenses, to submit information relating
				to its financial standing, solvency, or responsibility under any one of the
				following circumstances:
(a) The department
				has reasonable cause to doubt the financial responsibility of the applicant or
				licensee.
(b) The department has
				reasonable cause to doubt the applicant or licensee's compliance with ch. 218,
				Stats., or its related rules, where the violation constitutes grounds for
				suspension or revocation of a license. "Reasonable cause" includes a situation
				in which the licensee, applicant or employees of the licensee or applicant have
				been found by the department to have violated ch. 218, Stats., or rules
				interpreting ch. 218, Stats., anytime during the current or the immediately
				previous licensing period.
(c) The
				applicant or licensee is a motor vehicle salvage dealer that has not supplied a
				bond per s.
				218.21(4)
				(a), Stats., under the conditions specified
				in s.
				218.0114(20)
				(b), Stats.
(d) The applicant or licensee is a
				recreational vehicle dealer.
(e)
				The applicant or licensee is a wholesaler.
(f) The applicant or licensee is a moped
				dealer.
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 140 - Motor Vehicle Dealer Financial Eligibility And Bond Claim Requirements › Subchapter I - Dealer Security and Financial Eligibility Requirements › Section Trans 140.03 - Balance sheet information

Current through June 24, 2024
(1) If required by
				the department, licensees or applicants shall submit a balance sheet dated not
				more than 90 days prior to the date of submission, that is prepared in
				accordance with generally accepted accounting principles. A small business as
				defined in s.
				227.114,
				Stats., which does no interim financial reporting may submit a balance sheet
				from the close of the business' most recent fiscal year. The balance sheet
				shall contain the following:
(a)
				Assets.
(b) Liabilities.
(c) Net worth.
(d) The signature of one of the corporate
				officers, partners, or owners.
(e)
				The name of any financial institution used by the applicant.
(f) A schedule of securities owned, if
				any.
(g) A schedule of real
				property held, its fair market value, book value and the amount and terms of
				any indebtedness.
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 140 - Motor Vehicle Dealer Financial Eligibility And Bond Claim Requirements › Subchapter I - Dealer Security and Financial Eligibility Requirements › Section Trans 140.04 - Asset reporting

Current through June 24, 2024
(1) VALUATION. The financial statement shall
				present assets in terms of historical cost or book value of assets. In lieu of
				a statement presented with historical cost of fixed assets or book value of
				assets, the department shall consider a statement presenting fair market value
				information of fixed assets if clearly labeled and accompanied by an appraisal
				report of a certified appraiser or tax appraisal.
(2) CASH. Whenever a substantial portion of
				the assets of an entity is in the form of cash, confirmation of the amount is
				required from the financial institution holding the cash.
(3) RECEIVABLES. When a substantial portion
				of the assets of an entity are in the form of receivables from another
				individual, partnership or corporation, all or part of the receivables shall be
				discounted in considering the net worth of the applicant. In order to evaluate
				the quality of a receivable, a financial statement from the individual,
				partnership or corporation may be required. In no case will the department
				discount factory receivables.
(4)
				INVENTORY. The financial statement shall include the number of units in
				inventory and the number of units floor planned or used for loan collateral. A
				GAAP presentation of inventory values would not allow for the use of a reserve
				account for balance sheet information compiled for external purposes. As an
				exception to a GAAP presentation, the department will allow the use of a
				reserve account to accurately assess the value of inventory.
(5) CERTAIN ASSETS NOT TO BE CONSIDERED. The
				department shall not consider the following assets in evaluating the financial
				statement of an applicant:
(a) As specified
				in s.
				815.20,
				Stats., equity in homestead property up to $25,000;
(b) As specified in s.
				815.18,
				Stats., items of personal property which are exempt from execution;
(c) Any intangible asset values;
(d) Leasehold improvements; and
(e) All other assets subject to prior liens,
				security agreements, or other pledges.
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 140 - Motor Vehicle Dealer Financial Eligibility And Bond Claim Requirements › Subchapter I - Dealer Security and Financial Eligibility Requirements › Section Trans 140.05 - Liability reporting

Current through June 24, 2024
(1) REPORTING. All liabilities and contingent
				liabilities shall be reported. The terms, amount and conditions of any major
				liabilities shall be separately scheduled. This schedule should show the names
				of individuals or institutions who hold the debt, the amount of debt, and the
				terms of repayment. A list of customers and the amounts on deposit with the
				dealer should be attached to the financial statement.
(2) RATIO ANALYSIS. A ratio analysis
				comparing current liabilities with current assets shall be used to evaluate a
				dealer's financial potential. Current liabilities which exceed current assets
				may be grounds for the denial, suspension or revocation of a dealer's
				license.
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 140 - Motor Vehicle Dealer Financial Eligibility And Bond Claim Requirements › Subchapter I - Dealer Security and Financial Eligibility Requirements › Section Trans 140.06 - Net worth reporting

Current through June 24, 2024
(1) TREASURY STOCK. Treasury stock held by a
				corporation shall be reported separately on the balance sheet and clearly
				labeled as treasury stock.
(2)
				PREVIOUS PROFIT. Profit from the previous period of operations shall be
				reported separately in the net worth section of the balance sheet.
(3) NEGATIVE NET WORTH. A financial statement
				with a negative net worth is evidence of lack of financial ability to conduct
				business and the license shall be denied or revoked.
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 140 - Motor Vehicle Dealer Financial Eligibility And Bond Claim Requirements › Subchapter I - Dealer Security and Financial Eligibility Requirements › Section Trans 140.07 - Types of entities

Current through June 24, 2024
(1) SOLE PROPRIETORSHIPS. A sole
				proprietorship may report the entire value of assets jointly owned by the sole
				proprietor and by one or more persons on its financial statement. The financial
				statement shall be signed by the sole proprietor.
Note:
An example of a joint asset would be a
				  home owned by the sole proprietor and the sole proprietor's
				  spouse.
(2) PARTNERSHIPS.
				Partnerships shall submit a statement for the partnership as a whole and
				individual statements for each of the general partners. If the partnership
				agreement provides for anything other than an equal sharing by the partners, it
				shall be prominently noted on the statements. The provisions of sub. (1)
				relating to the listing of jointly owned assets also apply to this
				subsection.
(3) CORPORATIONS. A
				financial statement is required for the corporation which will hold the
				license. A financial statement of a controlling corporation, parent corporation
				or an interlocking corporation may be submitted, but shall not be substituted
				for the financial statement of the applicant.
1989 Wis. Act 303 repealed s. 180.41,
					 Stats.
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 140 - Motor Vehicle Dealer Financial Eligibility And Bond Claim Requirements › Subchapter I - Dealer Security and Financial Eligibility Requirements › Section Trans 140.08 - Copies required

Current through June 24, 2024
Salvage dealers, motor vehicle wholesalers, and moped dealers
				  shall file one copy of their financial statement with the department. All other
				  dealers shall file their financial statements in duplicate. The department
				  shall forward the duplicate copy to the co-licensor, the office of the
				  commissioner of banking.
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 140 - Motor Vehicle Dealer Financial Eligibility And Bond Claim Requirements › Subchapter I - Dealer Security and Financial Eligibility Requirements › Section Trans 140.09 - General requirements

Current through June 24, 2024
(1) OPERATING STATEMENT. If required by the
				department, the applicant shall submit an income statement or other financial
				statement. The department may require a dealer to submit updated financial
				information during the license year if questions arise regarding the dealer's
				financial condition.
(2) ACCEPTABLE
				NET WORTH.
(a) The following guidelines are
				used in determining the acceptable level of net worth of an applicant:
Dealer Type
New Auto or Truck
$50,000 bond or letter of credit required
Used Auto or Truck
$50,000 bond or letter of credit required
Motorcycle and not other motor vehicles
$5,000 bond or letter of credit required
Motorcycle and other motor vehicles
$50,000 bond or letter of credit required
Recreational Vehicle
Minimum required ratio of total assets to total
								liabilities of 1.4
Moped
Minimum required ratio of total assets to total
								liabilities of 1.4
Motor Vehicle Wholesaler
Minimum required ratio of total assets to total
								liabilities of 1.4
Motor Vehicle Salvage
Minimum net worth of $5,000
(b)
				The department may deny the license of an applicant who fails to meet the net
				worth criteria set out in par. (a).
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 140 - Motor Vehicle Dealer Financial Eligibility And Bond Claim Requirements › Subchapter II - Claims Against Bonds of Department Licensees › Section Trans 140.21 - Allowed claims

Current through June 24, 2024
(1) A claim is an allowable claim if it
				satisfies each of the following requirements and is not excluded by sub. (2) or
				(3):
(a) The claim shall be for monetary
				damages in the amount of an actual loss suffered by the claimant.
(b) The claim arose during the period covered
				by the security.
(c) The claimant's
				loss shall be caused by an act of the licensee, or the claimant's agents or
				employees, which is grounds for suspension or revocation of any of the
				following:
1. A salesperson license or a
				motor vehicle dealer license, in the case of a secured salesperson or motor
				vehicle dealer, pursuant to s.
				218.0116(1)
				(a) to (gm), (im) 2., (j), (jm), (k), (m) or (n) to
				(p), Stats.
2. A recreational vehicle dealer license, in
				the case of a bonded recreational vehicle dealer, pursuant to s.
				218.11(6),
				Stats.
3. A salvage dealer license,
				in the case of a bonded salvage dealer, pursuant to s.
				218.22(3),
				Stats.
4. An auction dealer
				license, in the case of a bonded auction dealer, pursuant to s.
				218.32(3),
				Stats.
5. Any other license issued
				by the department under ch. 218, Stats., in any other case, including that of a
				bonded manufacturer, distributor, distributor-wholesaler, or trailer dealer,
				pursuant to s.
				218.0116(1),
				Stats.
(d) The claim
				must be made within 3 years of the last day of the period covered by the
				security. The department shall not approve or accept any surety bond or letter
				of credit which provides for a lesser period of protection.
Note:
This paragraph does not supersede any
				  applicable provision of ch. 893, Stats., and does not limit the liability of
				  the licensee in any way.
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 140 - Motor Vehicle Dealer Financial Eligibility And Bond Claim Requirements › Subchapter II - Claims Against Bonds of Department Licensees › Section Trans 140.22 - Priority of claims

Current through June 24, 2024
Allowable claims against the security shall be assigned to
				  one of the following priority classes:
(1) SALESPERSON, MOTOR VEHICLE AND
				RECREATIONAL VEHICLE DEALER SECURITIES. The priority classes of allowable
				claims against the security of any licensee except a wholesaler, salvage or
				auction dealer, in order of their priority, are as follows:
(a) Claims of retail customers including,
				without limitation, claims arising from a particular motor vehicle purchase
				from the licensee or from a particular motor vehicle sale by the licensee,
				claims for repairs warranted by the licensee, claims for failure to furnish
				title to a motor vehicle, claims for deposits against an uncompleted motor
				vehicle purchase transaction, and claims for the failure of the licensee to pay
				the claimant for a trade-in, a motor vehicle purchased by the licensee, or a
				consigned vehicle not returned to the consignor upon request.
(b) Claims of commercial customers including,
				without limitation, claims arising from a particular motor vehicle purchase
				from the licensee or from a particular motor vehicle sale by the licensee,
				claims for repairs warranted by the licensee, claims for failure to furnish
				title to a motor vehicle, claims for deposits against an uncompleted motor
				vehicle purchase transaction, and claims for the failure of the licensee to pay
				the claimant for a trade-in, a motor vehicle purchased by the licensee, or a
				consigned vehicle not returned to the consignor upon request.
(c) Claims of the department for title and
				registration fees.
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 140 - Motor Vehicle Dealer Financial Eligibility And Bond Claim Requirements › Subchapter II - Claims Against Bonds of Department Licensees › Section Trans 140.23 - Payments on allowed claims

Current through June 24, 2024
(1) The amount paid
				on each allowed claim shall be determined by the priority class of the claim.
				All claims in the same priority class shall be treated alike, beginning with
				the claims of the first priority class, as follows:
(a) The total amount necessary to pay all
				claims of the class in full shall be determined.
(b) If enough funds are available under the
				bond or letter of credit to do so, all claims of the class shall be paid in
				full.
(c) If, after all allowed
				claims of a class have been paid in full, funds remain available to pay
				additional claims, the allowed claims of the next priority class shall be paid,
				in accordance with pars. (a) to (d).
(d) If insufficient funds are available to
				pay all claims in a class, then each claim of the class shall be prorated
				according to the following formula -
Wisconsin Administrative Code › Department of Transportation › Chapter Trans 140 - Motor Vehicle Dealer Financial Eligibility And Bond Claim Requirements › Subchapter II - Claims Against Bonds of Department Licensees › Section Trans 140.24 - Making claims

Current through June 24, 2024
(1) Each claim shall be in writing and shall
				include all of the following:
(a) The name
				and address of the claimant and a telephone number where the claimant can be
				reached during normal business hours.
(b) A description of the nature of the claim
				and the transaction from which the claim arose, including any specific acts of
				the dealer which are grounds for suspension or revocation of the dealer's
				license under ch. 218, Stats.
(c)
				The date on which the claim arose.
(d) The dollar amount of each separate loss
				or item of damage included in the total amount of the claim.
(e) Copies of all documents related to the
				transaction from which the claim arose.
(f) A statement of the status of any lawsuit
				regarding the claim and filed by the claimant against the licensee, including
				the name of the case, case number, court and a copy of any judgment
				entered.
(g) A description of the
				security interest, if any, held by the claimant including a copy of any
				security agreement related to the transaction from which the claim arose and a
				description of the secured property.
(h) A description of any licenses held by the
				claimant, if the claimant is licensed under ch. 218, Stats.
(i) A statement of whether the claimant is a
				retail customer, commercial customer, motor vehicle manufacturer, factory
				branch, factory representative, distributor, distributor representative,
				dealer, salesperson or a financial institution.
(j) A statement of whether the claimant is
				the licensee, the claimant's employer agent or employee.