# Transportation (GTR)

## Title 15. Vehicle Laws -- Licensing of Businesses and Occupations

### Subtitle 3. Dealers

#### Section 15-301

In this subtitle, "license" means a dealer's license issued by the Administration under this subtitle.

#### Section 15-302

(a) A person may not conduct the business of a dealer unless the person is licensed by the Administration under this subtitle.

(b) Any person who has been refused a dealer's license in this State or whose dealer's license is revoked or suspended may not conduct the business of a dealer under any license, permit, or registration certificate issued by any other jurisdiction.

(c) A person convicted of a violation of this section is subject to imprisonment not exceeding 1 year or a fine not exceeding $5,000 or both.

#### Section 15-303

(a) A license may not be issued to a partnership or corporation as such.

(b)

  (1) If an application for a license is made for a corporation, the license shall be applied for by and issued to three officers of the corporation who are authorized to act for it or, if it is a close corporation, at least one officer authorized to act for the close corporation.

  (2) If an application is made for a partnership, the license shall be applied for and issued to all of the partners who are authorized to act for the partnership. However, as to any such partner that is a corporation, the application for the corporate partner shall be made by and issued to three officers of the corporate partner who are authorized to act for it or, if it is a close corporation, at least one officer authorized to act for the close corporation.

(c) Each individual who applies for a license under this section assumes, as an individual, all responsibilities of the dealership and, as an individual, is subject to all conditions, restrictions, and penalties imposed on licensed dealers by the Maryland Vehicle Law.

#### Section 15-304

(a) Except as provided in subsection (b) of this section, a person may not be licensed under this subtitle unless:

  (1) The business to be conducted under the license is the only or principal business conducted from the fixed location specified in the application;

  (2) That business is conducted from a building that is adequate and appropriate for the sale of the vehicles that may be sold under the license; and

  (3) That business either:

    (i) Maintains and operates an automotive repair facility equipped for reasonably adequate and proper servicing of the vehicles to be sold by it; or

    (ii) Has an existing contract, approved by the Administration, that requires the contractor to service, at a reasonably convenient location, the vehicles to be sold by the business.

(b)

  (1) As to trailers, semitrailers, motorcycles, Class C (funeral and ambulance) vehicles, or emergency vehicles as defined in Sec. 11-118(2), (5), and (7) of this article, the sale of these vehicles need not be the only or principal business conducted from the fixed location, but shall be subject to any reasonable location requirements determined by the Administration by rule or regulation.

  (2) A wholesale dealer may be licensed under this subtitle regardless of whether the wholesale dealer meets the requirements of subsection (a)(1) and (3) of this section, but a wholesale dealer shall be subject to any reasonable location requirements determined by the Administration by rule or regulation.

(c) Notwithstanding the provisions of this section:

  (1) Except as provided in paragraph (3) of this subsection, a new vehicle dealer, or a licensed vehicle salesman who is employed by the dealer, may participate in 2 annual vehicle shows for each dealer location.

  (2) A display or exhibit of vehicles provided by a vehicle manufacturer is not a vehicle show under this section if buyers' orders are not executed and deposits are not accepted.

  (3)

    (i) A new vehicle dealer franchised to sell Class M motor homes or Class G trailers, or a licensed salesman who is employed by the dealer, may participate in 3 annual vehicle shows.

    (ii) A new vehicle dealer franchised to sell motorcycles, or a licensed salesman who is employed by the dealer, may participate in more than 2 annual vehicle shows.

(d) A vehicle dealer or licensed vehicle salesman listed in subsection (c) of this section may participate in a vehicle show if:

  (1) The dealer holds a valid license issued under this title; and

  (2) At least 60 days before the vehicle show, an application is filed with the Administration, for approval by the Administration, that contains:

    (i) A list of the names and business addresses of participating dealers to the extent known;

    (ii) The location of the vehicle show;

    (iii) The specific dates on which the vehicle show will be held; and

    (iv) Other reasonable information required by the Administration; and

  (3) The vehicle show does not exceed 10 consecutive days and, except for motorcycle shows, is restricted to new vehicles only.

(e)

  (1) This subsection does not apply to a licensed motorcycle dealer or a licensed motorcycle salesman who is employed by the dealer.

  (2) A licensed dealer, or a licensed vehicle salesman who is employed by the dealer, who participates in a vehicle show may execute a buyer's order and accept a deposit as provided in paragraph (3) of this subsection.

  (3) A licensed dealer may not accept a deposit that:

    (i) For an order for any vehicle, except a Class M motor home, exceeds 5 percent of the cost of the vehicle; or

    (ii) For an order of a Class M motor home, exceeds 10 percent of the cost of the motor home.

  (4) Except as otherwise provided in paragraph (2) of this subsection, a licensed dealer, or a licensed vehicle salesman who is employed by the dealer, shall conduct activities involved in a vehicle sale, including the completion of the sales contract, the issuance of temporary registration plates and a temporary registration certificate, and delivery of the vehicle, at the dealer's fixed location as shown in the dealer's application for the license.

(f) A licensed motorcycle dealer, or a licensed salesman who is employed at a vehicle show by the dealer, may conduct all activities involved in a motorcycle sale, including executing a buyer's order, accepting a deposit of any amount, completing the sales contract, issuing temporary registration plates and a temporary registration certificate, and delivery of the motorcycle.

#### Section 15-304.1

(a) There is an out-of-state motor home and recreational trailer vehicle show permit.

(b) The Administration may issue a permit under this section to a dealer of motor homes or recreational trailers licensed in another state only if that state reciprocally authorizes Maryland dealers of motor homes and recreational trailers to display or exhibit motor homes or recreational trailers at vehicle shows in that state.

(c) A permit holder:

  (1) May display or exhibit motor homes or recreational trailers at a vehicle show for motor homes or recreational trailers in Worcester County; and

  (2) May not execute a buyer's order or accept a deposit.

(d) An out-of-state dealer of motor homes or recreational trailers that is licensed by the licensing authority of another state may apply for a permit.

(e) The Administration shall determine the duration of a permit issued under this section.

(f)

  (1) After a permit has been approved by the Administration, the permit holder shall file a bond with the Administration.

  (2) The bond shall be on a form prescribed and furnished by the Administration, payable to the State, and conditioned on compliance with the conditions and limitations of the permit.

  (3) The amount of the bond shall be determined by the Administration.

  (4)

    (i) Liability under the bond shall be for the duration of the permit.

    (ii) A bond may not be fully released until all requirements of this section, regulations adopted in accordance with this section, and permit conditions have been met or complied with.

  (5) The bond shall be executed by the permit holder and by a corporate surety approved by the Administration.

(g) The Administration may suspend or revoke a permit if the Administration determines that the permit holder is out of compliance with this section or any permit conditions.

#### Section 15-305

(a) A license to deal in new vehicles may not be issued to any person unless the manufacturer or distributor of the vehicles is in compliance with the surety bond requirements of Sec. 15-205 of this title.

(b) A license to deal in new vehicles may be issued only for a dealer in new vehicles who holds a franchise from:

  (1) The manufacturer of the vehicles; or

  (2) A distributor who is authorized by the manufacturer or the manufacturer's authorized importer of the vehicles.

(c) If an applicant for a license to deal in new vehicles seeks to qualify under subsection (b) of this section, the applicant shall submit with the application an exact copy of the required franchise.

(d)

  (1) If a franchise required by this section is terminated in accordance with Sec. 15-209 of this title, the license of the dealer shall be suspended automatically unless, before the effective date of termination, the licensed dealer files satisfactory evidence that the franchise has been extended. The Administration immediately shall notify the licensee of the suspension.

  (2)

    (i) Notwithstanding paragraph (1) of this subsection, if a franchise issued to a licensee who deals in Class M motor homes or Class G travel trailers is terminated for any reason, the Administration may authorize the licensee to dispose of the Class M motor homes and Class G travel trailers that were in the dealer's inventory prior to the franchise termination without applying for a certificate of title in the dealership's name or paying the applicable excise tax.

    (ii) The initial authorization period under subparagraph (i) of this paragraph may not exceed 12 months from the date of the franchise termination.

    (iii) After the initial authorization period under subparagraph (i) of this paragraph, the Administration may review each situation on a case by case basis and determine whether a further extension of time to dispose of remaining inventory is warranted or whether the dealer shall be required to take title to any remaining Class M motor homes and Class G travel trailers in the dealer's inventory.

(e)

  (1) Notwithstanding subsections (a) and (f) of this section, a manufacturer or distributor may be licensed as a dealer if the manufacturer or distributor:

    (i) Operates temporarily a dealership that:

      (1) Was previously owned by a franchised dealer; and

      (2) Is for sale to any qualified person at a reasonable price;

    (ii) Operates a dealership in a bona fide relationship in which an independent person:

      (1) Has made a significant investment, subject to loss, in the dealership; and

      (2) Can reasonably expect to acquire full ownership of the dealership under reasonable terms and conditions; or

    (iii)

      (1) Is a second-stage manufacturer as defined in Sec. 13-113.2(a)(7) of this article; and

      (2) Deals only in Class E (truck) vehicles with a gross weight limit of 10,000 pounds or more, as defined in Sec. 13-916 of this article.

  (2)

    (i) Notwithstanding subsections (b) and (f) of this section and subject to subparagraph (ii) of this paragraph, a manufacturer or distributor may be licensed as a dealer if:

      (1) The manufacturer or distributor deals only in electric or nonfossil-fuel burning vehicles;

      (2) No dealer in the State holds a franchise from the manufacturer or distributor;

      (3) The manufacturer or distributor, or a subsidiary, an affiliate, or a controlled entity of the manufacturer or distributor, does not hold a controlling interest in another manufacturer or distributor, or a subsidiary, an affiliate, or a controlled entity of the other manufacturer or distributor, that is licensed as a dealer under this paragraph; and

      (4) No other manufacturer or distributor, or subsidiary, affiliate, or controlled entity of the other manufacturer or distributor, that is licensed as a dealer under this paragraph, holds a controlling interest in the manufacturer or distributor, or a subsidiary, an affiliate, or a controlled entity of the manufacturer or distributor.

    (ii) No more than four licenses may be issued under this paragraph.

    (iii) The Administration shall adopt regulations to implement this paragraph.

(f) A manufacturer or distributor, or a person who is acting for a partnership or corporation that is owned or controlled by or under common control with a manufacturer or distributor, may not sell a new vehicle to a retail buyer.

#### Section 15-305.1

(a) A wholesale dealer who is licensed by the Administration under this subtitle:

  (1) May buy a vehicle from another dealer, at an auto auction, or from a retail seller;

  (2) May sell a vehicle to or exchange vehicles with another dealer;

  (3) Except as provided in item (4) of this subsection, may sell a vehicle or exchange vehicles at an auto auction;

  (4) May not sell a vehicle to or exchange vehicles with a retail buyer; and

  (5) May not buy, sell, or exchange new vehicles.

(b) A wholesale dealer shall keep a record of the following:

  (1) The year, make, model, and identification number of a vehicle that is bought, sold, or exchanged;

  (2) The date that a vehicle is bought, sold, or exchanged;

  (3) The amount for which a vehicle is bought or sold;

  (4) The name, address, and license number of the other person with whom the wholesale dealer conducts a purchase, sale, or exchange;

  (5) The odometer mileage statement for a vehicle that is required under the federal Motor Vehicle Information and Cost Act; and

  (6) Each invoice, bill of sale, and other pertinent document and record in the form required by the Administration.

#### Section 15-306

In addition to the information required under Subtitle 1 of this title, each application for a license shall include:

(1) The type of dealership applied for;

(2) If the application is made for a partnership, the name and address of each partner applying for the partnership;

(3) If the application is made for a corporation or for a partnership by a corporate partner, the name and address of each of the officers applying for the corporation or partnership;

(4) If the application is made for a corporation, the place of its incorporation; and

(5) The nature of the business to be conducted at each address.

#### Section 15-307

(a) Each licensed dealer shall pay to the Administration an annual license fee established by the Administration for each license year or part of a license year for which the license is issued.

(b) A licensed dealer need not pay more than one annual fee, regardless of the number of its business locations.

(c) On payment of the fee required by this section and issuance of a dealer's license, the Administration also shall issue one vehicle salesman's license without further charge.

#### Section 15-308

(a)

  (1) After the Administration notifies an applicant of the approval of an application and before the Administration issues a license, the applicant shall file with the Administration a surety bond in the form and with the surety that the Administration approves.

  (2) The bond shall be for the applicant's primary location and all supplemental locations if all of the locations are licensed under the same dealer business license number.

(b) The amount of the surety bond shall be:

  (1) For a licensee who is licensed to deal only in trailers or semitrailers 15 feet or less in length, or only in boat trailers of any size     $5,000;

  (2) For a licensee who is licensed to deal in the sale of new motor vehicles, an amount based on the number of new motor vehicle sales during the preceding license year, according to the following schedule:

    (i) 1 to 500 vehicles      $50,000;

    (ii) 501 to 1,000 vehicles      $75,000;

    (iii) 1,001 to 2,500 vehicles      $100,000; and

    (iv) Over 2,500 vehicles      $300,000; and

  (3) For a licensee who is licensed to deal only in the sale of used motor vehicles, including wholesalers, or a licensee who is licensed to deal in the sale of trailers or semitrailers over 15 feet in length, an amount based on the number of used vehicle sales, or sales of trailers or semitrailers over 15 feet in length, during the preceding license year, according to the following schedule:

    (i) 1 to 250 vehicles    $15,000;

    (ii) 251 to 500 vehicles    $25,000;

    (iii) 501 to 1,000 vehicles    $35,000;

    (iv) 1,001 to 2,500 vehicles    $50,000; and

    (v) Over 2,500 vehicles    $150,000.

(c)

  (1) This subsection applies only to an applicant who:

    (i) Applies for a license to deal in the sale of new or used vehicles; and

    (ii) Was not licensed to sell vehicles during the preceding license year.

  (2) Subject to paragraph (3) of this subsection, the Administration shall base the amount of a surety bond for an applicant described in paragraph (1) of this subsection on the estimated volume of sales in the initial year in which the license is in effect.

  (3) The amount of the surety bond under paragraph (2) of this subsection may not be less than:

    (i) For an applicant for a license to deal in the sale of new motor vehicles, $50,000; or

    (ii) For an applicant for a license to deal in the sale of either used vehicles or trailers or semitrailers over 15 feet in length, $15,000.

(d) Notwithstanding subsection (c) of this section, if an applicant seeks a license for a location that is or that previously had been operated by a licensed dealer, the Administration may require a surety bond under subsection (b)(2) or (3) of this section based on the volume of sales at that location during a preceding license year.

#### Section 15-309

A license issued under this subtitle authorizes the licensed dealer to conduct the business of a dealer in the types of vehicles specified in it during the license year for which it is issued.

#### Section 15-310

Each license shall state:

(1) The type of vehicles in which the licensee may deal;

(2) The locations from which the licensee may deal in that type of vehicle;

(3) If it is a license to deal in new vehicles, the make of new vehicles in which the licensee may deal;

(4) As to a wholesale dealer, that the wholesale dealer may not sell a vehicle to or exchange vehicles with a retail buyer; and

(5) As to a wholesale dealer, that the wholesale dealer may not buy, sell, or exchange new vehicles.

#### Section 15-311

(a) A contract for the sale of a vehicle by a dealer shall contain a clear statement of:

  (1) The principal amount charged for the vehicle;

  (2) Any interest charged on the principal amount;

  (3) Any fee charged under Sec. 13-610 of this article;

  (4) Any dealer processing charge, as defined in Sec. 15-311.1 of this subtitle; and

  (5) Any other charge made in connection with the sale of the vehicle.

(b) In addition to the information required by subsection (a) of this section, a contract for the sale of a new vehicle shall include:

  (1) The base price of the vehicle;

  (2) The manufacturer's code or stock number for the vehicle; and

  (3) A clear and specific description of each extra item and each extra charge not included in the base price of the vehicle ordered by the buyer.

(c) If a licensee issues a stop sale directive applicable to a used vehicle manufactured by the licensee to a dealer that holds a franchise from the licensee and there are no remedies or parts available to fix the motor vehicle, the licensee shall compensate the dealer by:

  (1) Providing payment to the dealer at a rate of at least 1% per month or portion of a month of the value of the vehicle; or

  (2) Compensating the dealer under a national program that is applicable to all dealers holding a franchise from the licensee for the dealer's costs associated with the stop sale directive.

(d) When a vehicle arrives for delivery, the dealer shall advise the buyer of any extra items ordered by the buyer that are not on the vehicle.

(e) When a vehicle arrives for delivery, the dealer shall advise the buyer of any extra items on the vehicle that the buyer did not order.

(f) When a vehicle arrives for delivery, the dealer shall advise the buyer of the cost of extra items described under subsections (d) and (e) of this section.

#### Section 15-311.1

(a)

  (1) In this section, "dealer processing charge" includes an amount charged by a dealer for:

    (i) The preparation of written documentation of the transaction;

    (ii) Obtaining the title and license plates for the vehicle;

    (iii) Obtaining a release of lien;

    (iv) Filing title documents with the Administration;

    (v) Retaining documentation and records of the transaction;

    (vi) Complying with federal or State privacy laws; or

    (vii) Other administrative services concerning the sale of the vehicle.

  (2) "Dealer processing charge" does not include a charge to purchase or install tangible personal property on or in the vehicle, or to perform mechanical service on the vehicle.

(b)

  (1) If a dealer charges a dealer processing charge, the charge:

    (i) Shall be reasonable;

    (ii) May not exceed:

      (1) $200 for the period from July 1, 2011, through June 30, 2014;

      (2) $300 for the period from July 1, 2014, through June 30, 2020;

      (3) $500 for the period from July 1, 2020, through June 30, 2024; and

      (4) $800 on and after July 1, 2024; and

    (iii) Shall reflect dealer expenses generally incurred for the services identified in subsection (a)(1) of this section.

  (2) A dealer shall provide a written disclosure of the services included in the dealer processing charge on request by the purchaser.

(c) Any dealer processing charge or freight charge shall be disclosed to a purchaser as provided in this section.

(d) A contract for the sale of a vehicle shall contain a statement, in 12 point type or larger, on the contract form as follows:

"Dealer processing charge (not required by law): $....".

"Freight charge: $ ....".

(e) If a dealer advertises the price of a vehicle, the amount of any dealer processing charge and freight charge shall be included in the advertised price unless the dealer clearly and conspicuously discloses the amount of the dealer processing charge and freight charge in at least 10 point and bold font within reasonable proximity to the advertised price.

(f) The dealer shall attach its price statement to a window of the vehicle, next to any other price disclosure required by law. The dealer's price statement shall state the total price for which the dealer is offering to sell the vehicle. The total price stated shall include any dealer processing charge, which shall be disclosed above the total price in at least 10 point type as "dealer processing charge (not required by law): $.....". The total price may exclude only the taxes and title fees payable to the State.

#### Section 15-311.2

(a)

  (1) In this section the following words have the meanings indicated.

  (2) "Agent" means a business entity that is authorized by an obligor or a licensed vehicle dealer to sell a mechanical repair contract.

  (3)

    (i) "Mechanical repair contract" means any agreement or contract sold by a licensed vehicle dealer, an obligor, or an agent under which the obligor agrees to perform over a fixed period of time, for a specific duration, and for a specific identifiable price, provided that the purchase of the contract is optional to the purchaser, any of the following services:

      (1) The repair, replacement, or maintenance of a motor vehicle, or the indemnification for the repair, replacement, or maintenance of a motor vehicle, for the operational or structural failure of the motor vehicle due to a defect in materials, workmanship, or normal wear and tear, with or without additional provisions for incidental payment of indemnity for services including towing, rental and emergency road service, and road hazard protection;

      (2) The repair, replacement, or maintenance of a motor vehicle for the operational or structural failure of one or more parts or systems of the motor vehicle brought about by the failure of an additive product to perform as represented;

      (3) The repair or replacement of tires or wheels on a motor vehicle damaged as a result of coming into contact with road hazards, including potholes, rocks, wood debris, metal parts, glass, plastic, curbs, or composite scraps;

      (4) The removal and repair of dents, dings, or creases on a motor vehicle using the process of paintless dent removal;

      (5) The repair of chips or cracks in, or the replacement of, motor vehicle windshields as a result of damage caused by road hazards;

      (6) The replacement of a motor vehicle key or key fob if the key or key fob becomes inoperable or is lost or stolen; or

      (7) Other services or products that may be approved by the Insurance Commissioner if consistent with the provisions of this section.

    (ii) "Mechanical repair contract" includes extended warranties and extended service contracts.

    (iii) "Mechanical repair contract" does not include:

      (1) Warranties under the Magnuson-Moss Warranty Act, 15 U.S.C. Sec. 2301, et seq.;

      (2) Contracts or agreements for regular maintenance only; or

      (3) An agreement between a motor club, as defined in Sec. 26-101 of the Insurance Article, and a member or subscriber of the motor club.

  (4)

    (i) "Obligor" means the person specified in a mechanical repair contract that is contractually obligated to perform the services set forth in the mechanical repair contract.

    (ii) "Obligor" does not include an insurer that provides insurance coverage in accordance with subsection (b) of this section.

(b)

  (1)

    (i) An obligor under a mechanical repair contract shall maintain adequate insurance reserves, as defined by the Insurance Commissioner, for each such contract for the protection of the purchasing consumer.

    (ii) A policy or policies of insurance providing coverage for all obligations and liabilities incurred by an obligor under the terms of a mechanical repair contract or, in the event of the obligor's nonperformance, providing performance or payment on behalf of the obligor for all covered contractual obligations incurred by an obligor under a mechanical repair contract shall constitute adequate insurance reserves.

  (2) Each policy of insurance used to satisfy paragraph (1) of this subsection must be issued by:

    (i) An insurer authorized to do business in Maryland on an admitted or surplus lines basis; or

    (ii) A risk retention group, as defined in Sec. 25-101 of the Insurance Article, if that risk retention group is:

      (1) In full compliance with federal law;

      (2) In good standing in its domiciliary jurisdiction; and

      (3) Properly registered under State law.

  (3) A purchaser of a mechanical repair contract shall be entitled to make a direct claim against the insurer or risk retention group issuing a policy or policies of insurance under this subsection upon failure of the obligor to pay any claim or make any refund or consideration due within 60 days after the proof is filed with the obligor.

  (4)

    (i) At least 45 days before selling a mechanical repair contract, the obligor shall file the contract with the Insurance Commissioner along with evidence that the obligor maintains adequate insurance reserves as required under this section.

    (ii) Except as provided in subparagraphs (iv) through (vii) of this paragraph, a filing required under this subsection is not subject to the approval of the Insurance Commissioner.

    (iii) An obligor that is required to file a mechanical repair contract under this subsection shall pay a filing fee as provided in Sec. 2-112(a)(10) of the Insurance Article.

    (iv) The Commissioner may investigate and determine whether a mechanical repair contract filed under this paragraph is in compliance with this section.

    (v) If, after a hearing, the Commissioner finds that a mechanical repair contract is not in compliance with this section, the Commissioner shall issue an order that requires that use of the mechanical repair contract be discontinued after a date specified in the order.

    (vi) Pending a hearing, the Commissioner may issue an order that suspends use of a mechanical repair contract filed by an obligor if the Commissioner has reasonable cause to believe that:

      (1) The mechanical repair contract is in violation of this section;

      (2) Unless the order of suspension is issued, purchasers of the mechanical repair contract will suffer irreparable harm;

      (3) The harm that purchasers of the mechanical repair contract will suffer in the absence of the order of suspension outweighs the harm that the obligor would suffer if the order of suspension were issued; and

      (4) The order of suspension will not cause substantial harm to the public.

    (vii) Unless the obligor waives a hearing, the Commissioner:

      (1) Shall hold a hearing within 15 business days after issuing the order of suspension; and

      (2) Within 15 business days after the conclusion of the hearing, shall make a determination and issue an order as to whether the mechanical repair contract should be disapproved.

(c)

  (1) An obligor shall register with the Insurance Commissioner each year.

  (2) As part of registration, an obligor shall provide the following information for registration with the Commissioner:

    (i) The name, corporate address, and telephone number of the obligor;

    (ii) The name, address, and telephone number of an individual designated to receive correspondence on behalf of the obligor; and

    (iii) The name and address of a designated agent authorized to accept service on behalf of the obligor in the State.

  (3) An obligor shall notify the Commissioner within 30 days of any change to the registration information required under this subsection.

  (4) An obligor that is required to register under this section shall pay an annual registration fee as provided in Sec. 2-112(a)(12) of the Insurance Article.

  (5)

    (i) Only a licensed vehicle dealer, an agent, or a registered obligor, or an employee of a licensed vehicle dealer, an agent, or a registered obligor may offer, sell, or negotiate a mechanical repair contract.

    (ii) An obligor or a licensed vehicle dealer is liable for the actions of its agent when the agent is offering or selling a mechanical repair contract on behalf of the obligor or vehicle dealer.

    (iii) The Commissioner may pursue an action against a person that violates this paragraph.

  (6) Subject to paragraph (7) of this subsection, the Commissioner shall register each obligor that meets the requirements of this section.

  (7) The Commissioner may deny a registration to an applicant or refuse to renew, suspend, or revoke the registration of a registrant, after notice and an opportunity for a hearing under Sec.Sec. 2-210 through 2-214 of the Insurance Article, if the applicant or registrant, or an officer, director, or employee of the applicant or registrant:

    (i) Makes a material misstatement or misrepresentation in an application for registration;

    (ii) Fraudulently or deceptively obtains or attempts to obtain a registration for the applicant, the registrant, or another person;

    (iii) Has been convicted of a felony or of a misdemeanor involving moral turpitude in connection with the sale, solicitation, negotiation, or administration of a mechanical repair contract;

    (iv) Commits fraud or engages in illegal or dishonest activities in connection with the administration of a mechanical repair contract; or

    (v) Has violated any provision of this section or a regulation adopted under this section.

  (8) Instead of, or in addition to, suspending or revoking a registration, the Commissioner may impose on the registrant a civil penalty of:

    (i) Not less than $100 but not exceeding $1,000 for each violation of this section; and

    (ii) Not less than $100 but not exceeding $5,000 for each violation of this section committed by an agent or the agent's employee while offering or selling a mechanical repair contract on behalf of the registrant.

(d)

  (1) An obligor or a licensed vehicle dealer that uses an agent to sell a mechanical repair contract shall:

    (i) Maintain a list of its agents; and

    (ii) Make the list available to the Insurance Commissioner on request.

  (2) An agent shall:

    (i) Maintain a list containing the names of each employee who is authorized to sell a mechanical repair contract; and

    (ii) On request, provide the list to its obligor or licensed vehicle dealer within 10 business days from receipt of the request.

  (3) A list maintained under this subsection may be stored in an electronic format.

(e) A mechanical repair contract shall be offered in addition to any express warranty originally included as part of the contract for sale of a new motor vehicle.

(f) A mechanical repair contract shall clearly and conspicuously set forth the date when the warranty begins.

(g) A mechanical repair contract shall clearly and conspicuously set forth the date or the odometer reading at which the warranty expires and the name and address of the insurer issuing the policy of insurance as described in subsection (b) of this section.

(h) The repair of a malfunction or defect covered under a mechanical repair contract shall include the cost of the teardown and diagnosing the malfunction or defect.

(i) The provisions of the Maryland Consumer Products Guaranty Act, Title 14, Subtitle 4 of the Commercial Law Article, apply to a mechanical repair contract sold in the State.

(j) The provisions of this section do not apply to mechanical repair contracts issued by the motor vehicle manufacturer or the distributor or a wholly owned subsidiary of the manufacturer or the distributor as defined in Sec. 15-201 of this title.

(k) Notwithstanding subsection (j) of this section, licensed vehicle dealers and obligors who sell mechanical repair contracts shall have the same obligations as a seller under Sec. 2-314 of the Commercial Law Article.

(l) A person that sells a mechanical repair contract may not, directly or indirectly, make a false, deceptive, or misleading statement with respect to:

  (1) The person's affiliation with a motor vehicle manufacturer, manufacturer's subsidiary, distributor, factory branch, or dealer;

  (2) The person's possession of information regarding the manufacturer's original equipment warranty for a motor vehicle;

  (3) The expiration of a manufacturer's original equipment warranty for a motor vehicle; or

  (4) A requirement that a motor vehicle owner register for a new mechanical repair contract with the person in order to maintain coverage under the owner's current mechanical repair contract or the manufacturer's original equipment warranty.

(m) Except as expressly provided under this section, an obligor that complies with this section is not required to comply with any other provisions of the Insurance Article.

(n) Unless specifically described in subsection (a)(3) of this section, a mechanical repair contract may not provide indemnification for a loss caused by collision or by perils that are commonly covered by comprehensive or collision provisions of a motor vehicle insurance policy.

(o) In addition to any applicable disclosures required by the Maryland Consumer Products Guaranty Act, (Title 14, Subtitle 4 of the Commercial Law Article), a mechanical repair contract shall include the following disclosures:

  (1) The name, corporate address, and telephone number of the obligor and the mechanical repair contract seller; and

  (2) The right of the purchaser of the mechanical repair contract to make a direct claim against the insurer or risk retention group issuing a policy or policies of insurance as provided in subsection (b)(3) of this section.

(p) A person convicted of a violation of subsection (c)(5) of this section:

  (1) Is subject to imprisonment not exceeding 1 year or a fine not exceeding $5,000 or both; and

  (2) May be required to pay restitution.

#### Section 15-311.3

(a)

  (1) For a buyer purchasing a vehicle through dealer-arranged financing or leasing before approval of a third-party institution has been received, the following notice shall be provided to the buyer in a separate document and signed by the dealer and the buyer:

  "For finance or lease sales: The financing or lease agreement you entered into with the dealer is not final and must be approved by a third-party financial institution. If the terms are approved, the sale cannot be canceled. If the terms are not approved, the dealer must notify you in writing within 4 days of delivery of the vehicle to you, and you or the dealer may cancel this sale. If the sale is canceled, the vehicle delivered to you must be returned to the dealer in the same condition it was given to you, except for normal wear and tear, within 2 days of your receipt of a written notice of the third-party rejection. Unless you and the dealer agree on different terms, any down payment, titling fee, excise tax, dealer processing charge, or any other fee, tax, or charge associated with the transaction, and any trade-in vehicle, in the same condition in which the dealer received the vehicle, will be returned to you immediately and you may not be charged a fee for use of the vehicle that was the subject of the sale. You may not waive any of these rights. If you feel the dealer has failed to comply with the terms of this notice, you may contact the Motor Vehicle Administration or the Consumer Protection Division of the Office of the Attorney General.".

  (2) A copy of the signed notice shall be provided to the buyer before delivery of the vehicle to the buyer.

(b) A dealer shall notify a buyer in writing if the terms of a financing or lease agreement between a dealer and a buyer are not approved by a third-party finance source within 4 days of delivery of a vehicle to the buyer.

(c)

  (1) If the terms of a financing or lease agreement between a dealer and a buyer are not approved by a third-party finance source, the buyer shall return the vehicle to the dealer in the same condition in which the buyer received the vehicle, except for normal wear and tear, within 2 days of receipt of the notice required under subsection (b) of this section.

  (2) If a buyer does not return the vehicle to the dealer as required under paragraph (1) of this subsection, the dealer may repossess the vehicle in accordance with State law.

(d)

  (1) A dealer and a buyer may agree on new financing or leasing terms on return of a vehicle under subsection (c)(1) of this section.

  (2)

    (i) If a dealer and a buyer do not agree on new financing or leasing terms, the dealer or the buyer may cancel the sale.

    (ii) If a sale is canceled under subparagraph (i) of this paragraph, the dealer:

      (1) Shall return to the buyer:

      (A) Any trade-in vehicle in the same condition in which the dealer received the vehicle;

      (B) Any down payment;

      (C) The titling fee and excise tax paid under Title 13, Subtitle 8 of this article;

      (D) Any dealer processing charge; and

      (E) Any other fee, tax, or charge associated with the transaction; and

      (2) May not charge the buyer a fee for the use of the vehicle.

(e) A dealer shall maintain the required security for the vehicle under Sec. 17-104(b) of this article until the terms of the financing or lease agreement between a buyer and a dealer are approved by a third-party finance source.

(f) A buyer may not waive the rights established under this section.

(g) A violation of this section by a dealer:

  (1) Is an unfair and deceptive trade practice under Title 13 of the Commercial Law Article; and

  (2) Is subject to the enforcement and penalty provisions contained in Title 13 of the Commercial Law Article.

#### Section 15-312

(a) A dealer or an agent or employee of a dealer may not permit any individual to road test a motor vehicle if he knows that the other individual does not have a license to drive of the appropriate class.

(b) A dealer or an agent or employee of a dealer may not make any material misrepresentation in obtaining a vehicle sales contract.

(c) A dealer or an agent or employee of a dealer may not commit any fraud in the execution of or any material alteration of a contract, power of attorney, or other document incident to a sales transaction.

(d) A dealer or an agent or employee of a dealer may not prepare or accept any promissory note or other evidence of indebtedness on a vehicle sales contract knowing that it requires the debtor to pay an amount greater than that agreed on in the written contract for the sale of the vehicle.

(e) A dealer or an agent or employee of a dealer may not willfully fail to perform, without justification, any vehicle sales contract.

(f) A dealer or an agent or employee of a dealer may not materially deviate from or disregard, without the consent of the buyer, any of the original terms of the contract.

(g) A dealer or an agent or employee of a dealer may not willfully fail to comply with the terms of a warranty or guarantee.

(h) A dealer or an agent or employee of a dealer may not rent a dealer registration plate issued by the Administration.

(i) A person convicted of a violation of this section is subject to imprisonment not exceeding 2 months or a fine not exceeding $500 or both.

#### Section 15-313

(a) A dealer or an agent or employee of a dealer may not use any advertisement that is in any way false, deceptive, or misleading.

(b) A dealer or an agent or employee of a dealer may not by any means advertise or offer to the public any vehicle without intent to sell it as advertised or offered.

(c)

  (1) A dealer or an agent or employee of a dealer:

    (i) May not state the purchase price of a vehicle in an advertisement unless the price is the full delivered purchase price of the vehicle, excluding only taxes, title fees, and any freight or dealer processing charge disclosed in accordance with Sec. 15-311.1 of this subtitle; and

    (ii) Shall print the full delivered purchase price in a vehicle advertisement in the largest font used in the advertisement to provide any information related to the price of the vehicle.

  (2) The advertisement of a leased vehicle by a dealer is governed under Title 14, Subtitle 20 of the Commercial Law Article.

(d)

  (1) A dealer or an agent or employee of a dealer may not place on a vehicle an insignia, logo, or other plate that advertises the name of the dealer, unless:

    (i) The contract of sale for the vehicle contains a notice of the rights of the buyer described in this subsection; and

    (ii) The buyer of the vehicle consents to the placement of the insignia, logo, or other plate on the vehicle.

  (2) A dealer or an agent or employee of a dealer may enter into an agreement with a buyer of a vehicle to compensate the buyer in exchange for the buyer's consent to the placement on the vehicle of an insignia, logo, or other plate that advertises the name of the dealer.

  (3) If a dealer or an agent or employee of a dealer places an insignia, logo, or other plate that advertises the name of the dealer without obtaining a buyer's consent, the dealer shall, at the request of the buyer, remove the advertising and make all repairs necessary to restore the vehicle to its original appearance at no charge to the buyer.

(e) A dealer or an agent or employee of a dealer may not sell a Class A (passenger) or Class M (multipurpose) vehicle that has a maximum speed capability of more than 25 miles per hour but less than 55 miles per hour unless the dealer:

  (1) Permanently affixes an emblem to the vehicle in accordance with Sec. 21-805.1 of this article; and

  (2) Informs the buyer in writing that the vehicle may be driven lawfully only on highways on which the speed capability of the vehicle exceeds the posted maximum speed limit for the highway by at least 5 miles per hour.

(f) A person convicted of a violation of this section is subject to imprisonment not exceeding 2 months or a fine not exceeding $500 or both.

#### Section 15-314

(a) A dealer or an agent or employee of a dealer may not misrepresent any material fact in obtaining a license.

(b) A dealer or an agent or employee of a dealer may not conduct a dealership in any name other than the one in which the dealer is licensed.

(c) A dealer or an agent or employee of a dealer may not willfully fail to notify the Administration of any change of ownership, management, business name, or location or of the employment of vehicle salesmen, as required by this title.

(d) A dealer or an agent or employee of a dealer may not do any vehicle sales business with or through any person required to be licensed under this title if he knows that the person is not licensed.

(e) A dealer or an agent or employee of a dealer may not sell any new motor vehicle, or new two-stage motor vehicle unless the manufacturer or distributor of the vehicle is licensed as required by this title.

(f) A dealer or an agent or employee of a dealer may not willfully fail to comply with any rule, regulation, or lawful order adopted by the Administration under this title.

(g) A dealer or an agent or employee of a dealer may not willfully violate any of the dealer licensing laws of this State.

(h) A person convicted of a violation of this section is subject to imprisonment not exceeding 2 months or a fine not exceeding $500 or both.

#### Section 15-315

(a) In addition to the other grounds specified in Subtitle 1 of this title for refusal, suspension, or revocation of a license, the Administration may refuse to grant a license under this subtitle to any person and may suspend, revoke, or refuse to renew the license of any person if it finds that:

  (1) The person, his management personnel, or any other person who has a direct or indirect financial interest in the dealership is untrustworthy, lacks competence, or has been convicted by final judgment in any court of a crime of moral turpitude;

  (2) The vehicle sales transactions of the person have been marked by a practice of failure to perform contracts or by fraud or bad faith;

  (3) The person or the manufacturer or distributor of the vehicles in which the person deals is not in compliance with the surety bond requirements of Sec. 15-205 of this title; or

  (4) The person has failed to comply with any of the provisions of the Maryland Vehicle Law relating to the registration of vehicles, certificates of title, and the sale of vehicles.

(b) As to any person licensed under this subtitle, instead of or in addition to revocation, suspension, or refusal to renew a license under this section, the Administrator may order the licensee to pay a fine not exceeding $1,000 for each violation of this subtitle.

---

Md. Code Ann., Transp. (as displayed at mgaleg.maryland.gov, October 16, 2026)