Chapter Trans 139

MOTOR VEHICLE TRADE PRACTICES

Trans 139.01   Purpose and scope.

Trans 139.02   Definitions.

Trans 139.03   Advertising and sales representations.

Trans 139.035   Unfair trade practices.

Trans 139.04   Disclosure of the condition of the motor vehicle.

Trans 139.05   Motor vehicle purchase contract.

Trans 139.055   Financing.

Trans 139.06   Warranties.

Trans 139.07   Satisfaction of liens.

Trans 139.08   Consignment vehicles.

Trans 139.09   Waiver.

Ch. Trans 139 Note Note: Chapter MVD 24 as it existed on December, 31, 1982 was repealed and recreated as chapter Trans 139 effective January 1, 1983.

Trans 139.01 Trans 139.01 Purpose and scope.

Trans 139.01(1) (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.

Trans 139.01(2) (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.

Trans 139.01(3) (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.

Trans 139.01 History History: Cr. Register, December, 1982, No. 324, eff. 1-1-83; am. (1), Register, May, 1985, No. 353, eff. 6-1-85; correction in (1) made under s. 13.93 (2m) (b) 7., Stats., Register, December, 1987, No. 384; am. (2), Register, May, 1997, No. 497, eff. 9-1-97; corrections in (1) made under s. 13.93 (2m) (b) 7., Stats., Register July 2002 No. 559; CR 99-135: cr. (3) Register February 2004 No. 578, eff. 3-1-04.

Trans 139.02 Trans 139.02 Definitions. 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:

Trans 139.02(1) (1) “Business use” means any motor vehicle owned or leased by either of the following: 

Trans 139.02(1)(a) (a) A company, other than a lessor.

Trans 139.02(1)(b) (b) An individual and primarily operated for business use.

Trans 139.02(2) (2) “Cash price” means manufacturer’s suggested retail price, or dealer asking price, including manufacturer installed options and accessories and manufacturer transportation charges, plus dealer installed options and accessories and additional dealer markup, profit and transportation charges, minus the dollar value of cash discounts.

Trans 139.02(3) (3) “Damage” means defects caused by reasons other than normal wear through vehicle age and usage.

Trans 139.02(3m) (3m) “Day” means calendar day, unless otherwise stated in this chapter. The provisions of s. 990.001 (4), Stats., apply to calculations of time under this chapter, except that a legal holiday shall be counted as a day if the dealer is open for business.

Trans 139.02(4) (4) “Demonstrator” means any untitled or non-privately titled motor vehicle which was used primarily for the purpose of demonstration to the public.

Trans 139.02(5) (5) “Executive” means any untitled or non-privately titled motor vehicle which was used primarily by executives of licensed manufacturers, distributors or dealers and not used for demonstration to the public.

Trans 139.02(6) (6) “Insurance service plan” means a repair agreement issued by an insurance company and sold by a dealer.

Trans 139.02(6m) (6m) “Lease buy-out” means the lease option price or, if there is no option price, the amount the lessee shall pay the lessor to terminate the lease and transfer title to the vehicle.

Trans 139.02(7) (7) “Lease use” means any motor vehicle leased for a period of time exceeding 4 months. 

Trans 139.02(8) (8) “Licensee” means any motor vehicle manufacturer, distributor, dealer, or salesperson, or any combination thereof, licensed by the department.

Trans 139.02(9) (9) “Manufacturer” includes distributor.

Trans 139.02(9m) (9m) “Manufacturer recall” means a recall inspection or repair which the manufacturer of a vehicle has been ordered to have performed by the national highway traffic safety administration or which the manufacturer has agreed voluntarily to have performed for safety reasons. 

Trans 139.02(9r) (9r) “Manufacturer warranty” means the original new vehicle warranty issued by the vehicle manufacturer. That term includes any motor home warranty issued by the vehicle engine or chassis manufacturer. Manufacturer warranty does not include a warranty issued by a manufacturer of vehicle parts or services not warranted by the vehicle manufacturer.

Trans 139.02(10) (10) “Material” means that a reasonable person would attach importance to its existence or a seller knows or had reason to know that a buyer would regard it as important. A seller has reason to know that information is material if a buyer specifically requests the information.

Trans 139.02(10g) (10g) “Motor vehicle dealer” or “dealer” has the meaning as provided in s. Trans 138.02 (5g).

Trans 139.02(10r) (10r) “Motor vehicle salesperson” or “salesperson” has the meaning as provided in s. Trans 138.02 (5r).

Trans 139.02(11) (11) “New” means any untitled or non-privately titled motor vehicle of the stated model year which has not been a demonstrator and has not been operated more than 200 miles for purposes other than manufacturer tests, pre-delivery tests by a dealer, dealer exchange or delivery.

Trans 139.02(12) (12) “Personal use” means any motor vehicle owned or leased by an individual and primarily operated for personal use. 

Trans 139.02(13) (13) “Private retail purchaser” or “retail purchaser” means any purchaser not licensed as a motor vehicle manufacturer, distributor, dealer, or wholesaler.

Trans 139.02(14) (14) “Privately titled vehicle” means a vehicle titled by a private individual or any party other than a licensed motor vehicle manufacturer, distributor, or dealer.

Trans 139.02(15) (15) “Reasonable care” means the following: 

Trans 139.02(15)(a) (a) For vehicle inspections, a standard that requires an interior and exterior inspection, an under-hood and under-vehicle inspection, and a test drive. It does not require taking the vehicle apart or running tests unless it is necessary to diagnose apparent symptoms. Brakes may require some disassembly to satisfy the requirements in ch. Trans 305.

Trans 139.02(15)(b) (b) For records inspections, a standard that requires providing information the dealership gets from manufacturer and auction notices, prior owner documents and disclosures, and their own vehicle inspection and repair records. It does not require contacting prior owners or obtaining records of previous titles unless necessary to clarify inconsistent or questionable information that is apparent.

Trans 139.02(16) (16) “Rebuilt salvage” means any repaired vehicle that has ever had a salvage notation on its certificate of title from Wisconsin or another jurisdiction.  

Trans 139.02(17) (17) “Rental use” means any motor vehicle rented for a period of time not exceeding 4 months. 

Trans 139.02(18) (18) “Sale” includes lease with the option of purchase when the option is exercised.

Trans 139.02(19) (19) “Service contract” means any repair agreement sold by a dealer.

Trans 139.02(19m) (19m) “Title” means certificate of title issued by the Wisconsin department of transportation under ch. 342, Stats., or by another state in conformity with its applicable law, as evidence of ownership of a specific vehicle.

Trans 139.02(20) (20) “Used” means any motor vehicle other than a new motor vehicle and includes executive or demonstrator.

Trans 139.02(21) (21) “Water damaged vehicle” means a vehicle that has been materially damaged by being covered, in whole or in part, by water, whether by flood or other occurrence and the damage is less than what is required to meet the definition for branding in s. 342.10 (3) (d), Stats. 

Trans 139.02 History History: Cr. Register, December, 1982, No. 324, eff. 1-1-83; am. (intro.), renum. (1) to (9) and (11) to (14) to be (2) to (6), (8), (9), (11), (13), (14) and (18) to (20) and am. (11), cr. (1), (7), (9m), (12), (15) to (17) and (21), r. and recr. (10), Register, May, 1997, No. 497, eff. 9-1-97; CR 99-135: cr. (3m), (6m), (9r), (10g) and (10r), am. (11) and (19) Register February 2004 No. 578, eff. 3-1-04; CR 08-029: cr. (19m) Register August 2008 No. 632, eff. 9-1-08.

Trans 139.03 Trans 139.03 Advertising and sales representations.

Trans 139.03(1) (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.

Trans 139.03(2) (2) Factual.

Trans 139.03(2)(a) (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.

Trans 139.03(2)(b) (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.

Trans 139.03(3) (3) Disclosures required when advertising price.

Trans 139.03(3)(a) (a) When the price of a motor vehicle is advertised by a dealer licensee, or a group of dealer licensees are named in a joint advertisement, the advertised price shall include all charges that shall be paid by the purchaser to acquire ownership of the vehicle with the exception of sales tax, title and registration fees. The advertised price does not need to include the amount of the service fee if the advertisement clearly and conspicuously discloses that the advertised price does not include the optional service fee. In the print media, the disclosure of the amount of the service fee or the disclosure that the advertised price does not include the optional service fee shall be printed in not less than 9-point boldface type or not smaller than the largest typeface within the advertisement. In other advertising media, the disclosure of the amount of service fee or the disclosure that the advertised price does not include the optional service fee should be clearly communicated to the intended audience.

Trans 139.03(3)(b) (b) Use of terms such as “invoice,” “cost,” or similar terms, when advertising the price of a motor vehicle, and accessories, is an unfair practice and prohibited unless the advertisement discloses the dealer’s actual cost is less because there are, or may be, factory holdbacks, rebates, incentives, or other discounts to the dealer, if that is the case.

Trans 139.03(3)(c) (c) Whenever a dealer licensee has a promotion on a used motor vehicle and a sales price is stated in an advertisement, the sales price shall be disclosed on the vehicle during the sales promotion period.

Trans 139.03(4) (4) Trade-in allowance. No specific price shall be stated in an advertisement as an offer for a trade-in, if the price so stated is contingent upon the condition, model, or age of the prospective purchaser’s vehicle to be traded. Use of the phrases “up to,”“as much as” or similar phrases regarding a trade-in allowance is an unfair practice and prohibited.

Trans 139.03(5) (5) Used vehicle comparative savings. The use of manufacturer suggested retail prices, wholesale or retail dealer pricing guides, or similar price guides to advertise comparative savings for used vehicles other than demonstrators or executives is an unfair practice and prohibited, except that a motor vehicle pricing guide may be used if the use of the guide as the source of the pricing is stated in any required disclosure and the dealer makes the full objective documentation used to set the price available in writing to the customer.

Trans 139.03(7) (7) Free merchandise. It is unfair practice to use the word “free” or any other word or words of similar import, in any advertising, if receipt of the free merchandise, equipment, accessories or service is conditioned by purchase of a vehicle or related accessories.

Trans 139.03(8) (8) Establishing price. Use of phrases such as “write your own deal,” “name your own price,” “appraise your own vehicle,” and similar phrases is an unfair practice and prohibited.

Trans 139.03(9) (9) Sales.

Trans 139.03(9)(a) (a) Use of phrases such as “last of the remaining,” “close-out,” “final clearance,” “clearance,” and similar phrases when used in reference to used motor vehicles, other than demonstrator and executive vehicles, is an unfair practice and prohibited, unless the dealer licensee is actually discontinuing business.

Trans 139.03(9)(b) (b) Use of phrases such as “last of the remaining,” “close-out,” “final clearance,” “clearance” and similar phrases when used in reference to demonstrator, executive and new motor vehicles is an unfair practice and prohibited, unless the dealer licensee is not replacing the vehicles with similar vehicles of the same model year, or is actually discontinuing business.

Trans 139.03(10) (10) Vehicle availability. It is an unfair practice for a licensee to advertise motor vehicles or types of motor vehicles for sale unless the licensee has available, for delivery within a reasonable time, a quantity of the advertised vehicles sufficient to meet reasonably anticipated demands, unless the advertisement clearly and specifically discloses any limitations as to the quantity available or time of delivery.

Trans 139.03(11) (11) Name and address. Dealer and salesperson licensees are prohibited from advertising motor vehicle sales at an address or from listing a phone number or electronic mail address other than that of either the licensed business premises, or temporary locations as authorized by s. Trans 138.08, except that a licensee may list the phone number or electronic mail address of the licensee’s home in addition to the business phone number and address on a business card. Advertisements shall include the business name.

Trans 139.03(12) (12) New vehicles. Franchised new vehicle dealers, distributors and manufacturers are the only licensees permitted to advertise or sell new vehicles.

Trans 139.03(13) (13) Model year and if used. When advertising any motor vehicle, a dealer or salesperson licensee shall state the vehicle’s model year and, if the vehicle is of the current or previous model year, shall designate the vehicle as used if that is the fact. Reference to “low mileage,” “X-miles,” “one-owner,” “demonstrator,” “executive,” or other words of similar meaning shall serve to designate the vehicle as used. If all vehicles in an advertisement are used, one reference to designate that they are used is sufficient.

Trans 139.03(14) (14) Expiration terms of sales or promotions. Whenever a sale or promotion offering gifts, merchandise, equipment, accessories, service, discounts, price reductions, or cash is advertised, the advertisement shall also specifically disclose the expiration terms or date of the sale or promotion.

Trans 139.03(15) (15) Two or more damaged vehicles. Whenever a promotion or sale involving 2 or more vehicles damaged by the same cause as a result of the same incident is offered by a dealer licensee, all accompanying advertising shall disclose the cause of damage, regardless of the extent of damage.

Trans 139.03(16) (16) Flood or water damaged vehicles. Whenever a dealer licensee offers, promotes the sale of, or sells a flood or water damaged vehicle, all advertising relating to that vehicle shall disclose that the vehicle has been flood or water damaged. Required disclosure of flood or water damage is limited to that which the dealer could find using reasonable care.

Trans 139.03 History History: Cr. Register, March, 1973, No. 207, eff. 4-1-73; am. (5) and (14), Register, June, 1974, No. 222, eff. 7-1-74; am. (2) (a), r. (2) (b), (3) (a) and (8), renum. (9) and (10) to be (8) and (9), (11) and (15) are renum. (10) and (14) and am., renum. (12), (13), (14), (16) and (17) to be (11), (12), (13), (15) and (16), Register, April, 1977, No. 256, eff. 5-1-77; renum. from MVD 24.02 and am., Register, 1982, No. 324, eff. 1-1-83; am. (3) (a), Register, October, 1983, No. 334, eff. 11-1-83; am. (5), (11) and (16), r. (6), Register, May, 1997, No. 497, eff. 9-1-97; CR 02-028: am. (3) (a), Register July 2002 No. 559, eff. 8-1-01; CR 08-029: am. (5) Register August 2008 No. 632, eff. 9-1-08.

Trans 139.035 Trans 139.035 Unfair trade practices.

Trans 139.035(1) (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.

Trans 139.035 Note Note: Bird-dogging is also known as referral selling.

Trans 139.035(2) (2) Engaging in bird-dogging is an unfair trade practice and is prohibited.

Trans 139.035 History History: CR 08-029: cr. Register August 2008 No. 632, eff. 9-1-08.

Trans 139.04 Trans 139.04 Disclosure of the condition of the motor vehicle.

Trans 139.04(1) (1) Model year designation.

Trans 139.04(1)(a) (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.

Trans 139.04(1)(b) (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).

Trans 139.04(2) (2) New motor vehicle disclosure.

Trans 139.04(2)(a) (a) The dealer and salesperson licensees shall disclose to the prospective purchaser of any new motor vehicle when any parts, equipment or accessories originally installed have been removed or replaced by a dealer licensee prior to sale, if the replacement items are not of equal quality, and shall disclose all dealer installed options or accessories and whether or not warranted. The disclosures shall be in writing on the face of the motor vehicle purchase contract as required by s. Trans 139.05 (2) (f) and (h).

Trans 139.04(2)(b) (b) Prior to delivery of a new motor vehicle, the dealer licensee shall furnish to the purchaser a copy of the predelivery test and inspection report made pursuant to the manufacturer’s specifications filed under s. 218.0116 (1) (km), Stats. The manufacturer shall file with the department a copy of any amended delivery and preparation obligations of its dealers at least 30 days prior to adoption of changes.