Chapter Trans 139

Trans 139.05(5)(c)2. 2. A trade-in vehicle may be reappraised if it suffers damage as defined by s. Trans 139.02 (2), or parts or accessories have been removed after purchase contract execution. Reappraisal by the dealer licensee shall be limited to an amount equal to the retail repair costs of damages incurred, or to the value of parts or accessories removed. Reappraisal for mileage/kilometers is not allowed unless the dealer has stated on the contract that “The appraisal is based on an odometer reading of up to ________ miles/kilometers, and the trade-in vehicle may be reappraised if it exceeds this limit.”

Trans 139.05(6) (6) Damage disclosure. On any new vehicle or demonstrator or executive vehicle, any corrected damage exceeding 6% of the manufacturer’s suggested retail price, as measured by retail repair costs, and all uncorrected damage shall be disclosed in writing to the purchaser prior to delivery. Damage to glass, tires, bumpers, moldings or audio equipment is excluded from the 6% rule when replaced by identical manufacturer’s original equipment.

Trans 139.05(6m) (6m) Estimated mileage at delivery. If a motor vehicle dealer enters into a purchase contract to sell a new vehicle as defined in s. Trans 139.02 (11) that is not available at the dealers’ location, the dealer shall provide the purchaser with an estimate of vehicle mileage at delivery. The purchase contract shall be cancelable at purchaser’s option if the mileage of the vehicle upon delivery exceeds the dealer’s estimate. This option ends upon acceptance of delivery. Once acceptance of the vehicle occurs, any purchaser’s rights to cancel the purchase contract on the basis of excess mileage over dealer’s good faith estimate are waived. The purchase contract shall state in bold face type the following: IF THE MOTOR VEHICLE DEALER AND PURCHASER ENTER INTO A PURCHASE CONTRACT FOR A NEW MOTOR VEHICLE NOT AVAILABLE AT THE DEALER’S LOT, THE DEALER AND PURCHASER AGREE THAT THE VEHICLE MILEAGE UPON DELIVERY WILL NOT EXCEED _____ <motor vehicle dealer fills in estimated mileage> MILES. BEFORE VEHICLE DELIVERY, PURCHASER HAS THE RIGHT TO CANCEL THE PURCHASE CONTRACT IF THE MILEAGE OF THE VEHICLE EXCEEDS THAT AMOUNT.

Trans 139.05(7) (7) Order limitations. It is an unfair practice and prohibited for a dealer licensee to execute a purchase contract for a vehicle or type of motor vehicle unless the dealer licensee reasonably expects to have the ordered vehicle available for delivery by the anticipated delivery date.

Trans 139.05(8) (8) Service fees.

Trans 139.05(8)(a) (a) A dealer may assess a purchaser or lessee an additional service fee for completing any sales-related or lease-related vehicle inspection or forms which are required by law or rule if the dealer has made full disclosure of the service fee to the prospective retail customer. The service fee may not be increased after this disclosure but may be reduced. Dealers that choose to charge a purchaser or lessee a service fee shall include the following disclosure on the purchase or lease contract: “A service fee is not required by law, but may be charged to motor vehicle purchasers or lessees for services related to compliance with state and federal laws, verifications and public safety, and must be reasonable.” Upon request from a purchaser, the selling dealer shall provide a written disclosure of the services included in this service fee. The Department reserves the right to audit fees to determine whether they are reasonable.

Trans 139.05(8)(b) (b) A dealer licensee who has contracted with the department in accordance with the provisions of s. 341.21, Stats., may charge a purchaser a fee in the amount contained in the contract for the dealer’s services relating to the processing or distribution of an original or renewal registration or a certificate of title.

Trans 139.05(8g) (8g) Estimated trade-in lien payoff amounts. When the payoff for a trade-in vehicle is unknown, the dealer may estimate the payoff in the itemization of vehicle price required under sub. (2) (g). Where such an estimate is used, the purchase contract shall provide that the purchaser may rescind the purchase contract if the actual amount needed to pay off all extensions of credit secured by the motor vehicle exceeds the estimated payoff amount used in the itemized calculation of vehicle price by more than 1 payment on the note secured by the trade-in vehicle. The actual difference between the estimated payoff and actual payoff shall be disclosed by the dealer to the purchaser in writing. A purchaser’s refusal to accept delivery of a vehicle or agree in writing to waive the payoff difference within 7 days of notification by the dealer that contract contingencies have been met and disclosure of the payoff difference shall rescind the purchase contract. Adjusting the contract price to reflect an actual loan payoff amount is not bushing if the dealer complies with the requirements of this subsection.

Trans 139.05(8r) (8r) Vehicle rebates.

Trans 139.05(8r)(a) (a) The existence of a manufacturer’s or other rebate on a vehicle is a material item in determining the price of the vehicle. A purchase contract shall provide that if, for any reason, a purchaser does not qualify for a rebate that is referenced in the purchase contract as required by sub. (2) (g), the purchaser may rescind the purchase contract unless the dealer discounts the purchase price of the vehicle by the amount of the rebate. If a purchaser does not qualify for a rebate and the dealer will not provide a discount in the amount of the rebate, the dealer shall notify the purchaser in writing of the fact that the purchaser does not qualify for the rebate and notify the purchaser that the contract shall be rescinded unless purchaser, within 7 days, signs a new purchase contract for the vehicle for the new higher contract price. A purchaser’s refusal, within 7 days of receiving written notification, to execute a new purchase contract rescinds the original contract. Purchaser’s execution of a new contract after disclosure of the fact that purchaser did not qualify for a rebate waives purchaser’s objections related to the rebate.

Trans 139.05(8r)(b) (b) Delivering a motor vehicle to the purchaser without disclosing in writing that the purchaser does not qualify for the rebate in the manner required under par. (a) is “bushing” under sub. (5) (c) unless the dealer provides a discount to the purchaser for the amount of the rebate and delivers the vehicle at the original contract price.

Trans 139.05(8r)(c) (c) If a manufacturer rebate not referenced in a purchase contract becomes available based on the delivery date of a vehicle, and a retail purchaser qualifies for the rebate at the time of delivery, the rebate shall be awarded to the purchaser and the contract shall be amended accordingly as provided in sub. (1) (a). For purposes of this section, “manufacturer rebate” means a rebate provided by the vehicle manufacturer directly to the purchaser, including when assigned to the motor vehicle dealer, and does not include manufacturer rebates or wholesale incentives to the dealer or manufacturer discounts from the wholesale price to the dealer.

Trans 139.05(9) (9) Waiver. The use of a motor vehicle purchase contract which requires the purchaser to waive any claims the purchaser may have for breach of contract by the licensee is an unfair practice and prohibited.

Trans 139.05(10) (10) Additional disclosures. The motor vehicle purchase contract shall clearly state “Contact the selling motor vehicle dealer to discuss any questions or problems about your vehicle or this contract. If you are unable to resolve any disputes with the dealer, you may contact: Division of Motor Vehicles, Dealer Section, Wisconsin Department of Transportation, P.O. Box 7909, Madison, Wisconsin 53707. The Dealer Section licenses motor vehicle dealers and administers the administrative regulations governing consumer protection in vehicle sale transactions, Ch. Trans 139, Wis. Admin. Code.”

Trans 139.05(11) (11) Contract prohibited. A purchase contract for a used motor vehicle may not be executed with the retail purchaser until the vehicle has been inspected and findings disclosed as required by s. Trans 139.04 (4) and (5) unless no inspection is required under s. Trans 139.04 (6) (c).

Trans 139.05(11m) (11m) Contingent purchase contracts. A motor vehicle dealer who has a signed purchase contract to sell a particular vehicle with a purchaser that is subject to satisfaction of a purchaser’s contingency before the purchase contract becomes final may accept purchase offers for that vehicle subordinate to that of the purchaser. Any such subordinate purchase offer shall include the disclosures required by sub. (2) (jr).

Trans 139.05(12) (12) Order changes. A dealer licensee shall notify a retail purchaser of any information changing the order or delivery of a vehicle, such as a change in options, equipment, price, or anticipated assembly and delivery date. Notification shall be within 3 business days from the date the dealer receives the information.

Trans 139.05 History History: Cr. Register, March, 1973, No. 207, eff. 4-1-73; am. (1), (3) (e) and (4); r. and recr. (6); cr. (9), Register, June, 1974, No. 222, eff. 7-1-74; am. (7), r. (8), renum. (9) to be (8) and am., cr. (9), Register, April, 1977, No. 256, eff. 5-1-77; renum. from MVD 24.04 and am., Register, December, 1982, No. 324, eff. 1-1-83; emerg. am. (5) (c) 1., eff. 7-22-83; am. (5) (c) 1., Register, May, 1985, No. 353, eff. 6-1-85; renum. (8) to be (8) (a) and am., cr. (8) (b), Register, January, 1997, No. 493, eff. 2-1-97; r. and recr. (2) (f), am. (10) (intro.) and (a), r. (10) (b) to (d), Register, May, 1997, No. 497, eff. 9-1-97; CR 02-028: am. (2) (g) and (8) (a), Register July 2002 No. 559, eff. 8-1-02; correction in (2) (i) made under s. 13.93 (2m) (b) 7., Stats., Register July 2002 No. 559; CR 99-135: am. (1) (a), (2) (f), (i), (j), (5) (b) 3., (6), (10) and (11), cr. (1) (a) 1., 2., (2) (jm), (jr), (6m), (8g), (8r) and (11m), r. and recr. (2) (g) Register February 2004 No. 578, eff. 3-1-04; CR 08-029: cr. (2) (fm) Register August 2008 No. 632, eff. 9-1-08.

Trans 139.055 Trans 139.055 Financing.

Trans 139.055(1) (1) Dealer arranged financing.

Trans 139.055(1)(a) (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.

Trans 139.055(1)(b) (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.

Trans 139.055(2) (2) Purchaser arranged financing. A motor vehicle purchase contract that is contingent on a purchaser arranging financing is rescinded if the purchaser does not provide evidence to the dealer that the purchaser has arranged acceptable financing for the purchase of the vehicle, such as a loan commitment letter, within a time established in the purchase contract.

Trans 139.055(3) (3) No fees on void contracts. A dealer may not charge a fee or penalty to the purchaser in connection with a contract that is rescinded under this section.

Trans 139.055 History History: CR 99-135: cr. Register February 2004 No. 578, eff. 3-1-04.

Trans 139.06 Trans 139.06 Warranties. 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.

Trans 139.06(1) (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:

Trans 139.06(1)(a) (a) Clear identification of the names and addresses of the warrantors.

Trans 139.06(1)(b) (b) Clear identification of the purchaser to whom the warranty is extended.

Trans 139.06(1)(c) (c) Parts covered. Use of the terms “power train” or “drive train” to describe parts or systems covered is prohibited.

Trans 139.06(1)(d) (d) Exceptions and exclusions from the terms of the warranty.

Trans 139.06(1)(e) (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.

Trans 139.06(1)(f) (f) A statement of what the purchaser shall do and expenses the purchaser shall bear.

Trans 139.06(1)(g) (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.

Trans 139.06(2) (2) Disclosure. The elements of the warranty shall be stated in words or phrases which clearly disclose the nature or scope of the warranty.

Trans 139.06(3) (3) Implied warranty. No implied warranty of merchantability or fitness shall be excluded in the sale of a motor vehicle unless the sale is explicitly negotiated between the purchaser and dealer licensee on an“AS IS—NO WARRANTY” basis and is in conformity with s. Trans 139.04 (6) (a) 5. No implied warranty of merchantability or fitness shall be modified or limited, except that implied warranties may be limited to the duration of a written limited warranty of reasonable duration.

Trans 139.06(4) (4) Advertising. Warranties shall not be advertised unless the basic terms and conditions of the warranty are disclosed in the advertisement.

Trans 139.06(5) (5) Without charge. The use of the words “without charge” and other similar words or phrases in connection with the warrantor’s services or responsibilities under a warranty constitutes an unfair practice and is prohibited unless the warrantor does not assess any costs or charges in connection with the required repair or replacement of a warranted item or services.

Trans 139.06(6) (6) Extended warranty. If a valid warranty claim made during the warranty period, as evidenced by a dealer repair order indicating date and mileage, cannot be remedied until after expiration of the warranty period, the warrantor shall continue to be obligated for the claim until properly remedied.

Trans 139.06(7) (7) Replacement parts. Parts repaired or replaced by a dealer licensee on a new vehicle which was received from the manufacturer or distributor in a damaged condition shall carry the same warranty as the original parts, provided the parts are approved for use by the vehicle manufacturer or distributor for repair or replacement.

Trans 139.06(9) (9) Warranty labor reimbursement complaints. Any department determination or licensing action based on a warranty labor complaint shall be based upon the information submitted to the department by the parties involved. The department shall not be required to conduct any on-site investigations or informational hearings.

Trans 139.06(10) (10) Warrantor basic obligation.

Trans 139.06(10)(a) (a) It is an unfair practice and prohibited for a warrantor to fail to service or repair a motor vehicle in accordance with the terms and conditions of the warranty or service contract.

Trans 139.06(10)(b) (b) A dealer shall service or repair a motor vehicle under the same terms and conditions as a manufacturer warranty if dealer provides information to the purchaser that there is a remaining manufacturer warranty on the vehicle that will be honored by the manufacturer, and the vehicle is not warranted or the manufacturer subsequently rejects a request to transfer the warranty to the purchaser.

Trans 139.06(10)(c) (c) A dealer shall service or repair a motor vehicle part under the same terms and conditions as a part manufacturer warranty if the dealer provides information to the motor vehicle purchaser that there is a remaining part manufacturer warranty on a vehicle part for which there is no warranty or that the warrantor refuses to transfer to purchaser.

Trans 139.06(10)(d) (d) A dealer shall service or repair a motor vehicle under the same terms and conditions as a third party warranty if, before the purchaser accepts delivery of the motor vehicle, dealer provides information to the purchaser that there is a remaining third-party warranty on the vehicle that will be honored by the third party warrantor and the vehicle is not warranted or the third party subsequently rejects a request to transfer the warranty to the purchaser.

Trans 139.06(10)(e) (e) Under this subsection, a dealer’s obligation to honor a warranty that the dealer improperly discloses or disclaims to the purchaser is limited to providing motor vehicle service and repairs under the same terms and conditions the original warrantor would have been obligated to honor. A dealer’s obligation to honor a warranty is also limited by the expiration date or mileage set forth under the motor vehicle manufacturer, third party or part manufacturer warranty, or until the motor vehicle attains the age or mileage the dealer discloses to the purchaser in the Motor Vehicle Purchase Contract, in accordance with s. Trans 139.05 (2) (f), whichever is later.

Trans 139.06 Note Note: A dealer is not required to ascertain whether remaining warranty is available if the dealer does not provide information to the purchaser that there is a remaining warranty available for transfer to the vehicle purchaser, except that new car dealers should ascertain availability of remaining manufacturer warranties for used cars of the same line make for which the dealer holds a franchise.

Trans 139.06 History History: Cr. Register, March, 1973, No. 207, eff. 4-1-73; cr. (9), Register, June, 1974, No. 222, eff. 7-1-74; renum. MVD 24.06 (2) to be MVD 24.05 (10), Register, December, 1975, No. 240, eff. 1-1-76; am. (3), Register, April, 1977, No. 256, eff. 5-1-77; renum. from MVD 24.05 and am., Register, December, 1982, No. 324, eff. 1-1-83; am. (1) (c), Register, May, 1986, No. 365, eff. 6-1-86; correction in (3) made under s. 13.93 (2m) (b) 7., Stats., Register, May, 1997, No. 497; correction in (8) made under s. 13.93 (2m) (b) 7., Stats., Register July 2002 No. 559; CR 99-135: am. (intro.) and (10), cr. (10) (b) to (e) Register February 2004 No. 578, eff. 3-1-04; CR 19-059: r. (8) Register March 2020 No. 771, eff. 4-1-20.

Trans 139.07 Trans 139.07 Satisfaction of liens. 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.

Trans 139.07 History History: CR 99-135: cr. Register February 2004 No. 578, eff. 3-1-04.

Trans 139.08 Trans 139.08 Consignment vehicles.

Trans 139.08(1) (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.

Trans 139.08(2) (2) No dealer may accept delivery of or display a consignment vehicle for sale until all of the following requirements have been met:

Trans 139.08(2)(a) (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.

Trans 139.08(2)(b) (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.

Trans 139.08(3) (3) A dealer shall remit any monies due a consignor under a consignment agreement within 7 days of the date a consignment vehicle is sold.

Trans 139.08 Note Note: The purpose of this section is to insure that a consignor’s interest in any vehicle consigned is protected from adverse claims of motor vehicle dealer creditors, administrators, or trustees. Section 402.326 (5), Stats., provides that personal, family or household goods do not become the property of a consignee dealer upon consignment. Therefore, no U.C.C. financing statement is required to protect consignors of personal vehicles. A U.C.C. financing statement is required to perfect the interest of a business consignor in a vehicle consigned to a dealer. ss. 409.310 and 409.319, Stats.

Trans 139.08 History History: CR 99-135: cr. Register February 2004 No. 578, eff. 3-1-04.

Trans 139.09 Trans 139.09 Waiver. Waiver of any requirements of this chapter, except as specifically provided for in this chapter, is prohibited and void.

Trans 139.09 History History: Cr. Register, March, 1973, No. 207, eff. 4-1-73; renum. from MVD 24.07 to MVD 24.06, Register, December, 1975, No. 240, eff. 1-1-76; renum. from MVD 24.06 and am., Register, December, 1982, No. 324, eff. 1-1-83; CR 99-135: renum. from s. Trans 139.07 Register February 2004 No. 578, eff. 3-1-04.