# COMAR Title 11 — Department of Transportation

## Subtitle 12 — Motor Vehicle Administration — Licensing of Businesses and Occupations

### Chapter 01 — Dealers and Salesmen

**Authority:** Commercial Law Article, §14-1502; Transportation Article, §§12-104(b), 13-503, 13-610, 13-621, 15-102,15-103, 15-105, 15-107, 15-108, 15-305.1, 15-307—15-309, 15-311.1, 15-312, 15-313, 15-406, 15-408, 15-409, and 15-411; Annotated Code of Maryland

**Administrative History:** Effective date: February 15, 1973

**Administrative History:** Regulation .02 amended effective December 1, 1978 (5:24 Md. R. 1798)

**Administrative History:** Regulations .03 and .09 amended effective May 5, 1978 (5:9 Md. R. 685)

**Administrative History:** Regulations .11 and .12C—F amended effective June 15, 1979 (6:12 Md. R. 1051)

**Administrative History:** Regulation .12 amended effective April 6, 1979 (6:7 Md. R. 577)

**Administrative History:** Regulation .12D amended effective December 28, 1979 (6:26 Md. R. 2075)

**Administrative History:** Regulations .13P—S, .14D, .15, and .16 adopted effective February 4, 1976 (3:3 Md. R. 151)

**Administrative History:** Regulation .15A, C amended effective August 25, 1978 (5:17 Md. R. 1331)

**Administrative History:** Regulations .17 and .18 adopted effective May 12, 1976 (3:10 Md. R. 530)

**Administrative History:** Regulation .18 amended effective January 27, 1978 (5:2 Md. R. 64)

**Administrative History:** Regulations .01—.08, .10, .12—.14, .16, and .18 amended effective February 6, 1981 (8:3 Md. R. 227)

**Administrative History:** Regulation .01 amended effective January 1, 1992 (18:25 Md. R. 2752); May 6, 1996 (23:9 Md. R. 670)

**Administrative History:** Regulation .02D amended effective July 28, 1986 (13:15 Md. R. 1734)

**Administrative History:** Regulation .02F amended effective January 21, 1991 (18:1 Md. R. 30)

**Administrative History:** Regulation .02N amended effective June 19, 1995 (22:12 Md. R. 902)

**Administrative History:** Regulation .02O adopted and .04A amended as an emergency provision effective July 18, 1985 (12:16 Md. R. 1602)

**Administrative History:** Regulation .02O adopted and Regulations .02N and .04A amended as an emergency provision effective September 4, 1985 (12:19 Md. R. 1845); adopted permanently effective December 30, 1985 (12:26 Md. R. 2545)

**Administrative History:** Regulation .04 amended as an emergency provision effective September 1, 1988 (15:20 Md. R. 2331); adopted permanently effective December 26, 1988 (15:26 Md. R. 2985)

**Administrative History:** Regulation .05B, E amended effective November 10, 2003 (30:22 Md. R. 1583)

**Administrative History:** Regulation .05D amended effective July 8, 1991 (18:13 Md. R. 1483)

**Administrative History:** Regulation .07-1 adopted effective February 14, 1994 (21:3 Md. R. 194)

**Administrative History:** Regulation .08 amended effective January 1, 1992 (18:25 Md. R. 2752)

**Administrative History:** Regulation .09 amended effective May 28, 1990 (17:10 Md. R. 1220); November 8, 1993 (20:22 Md. R. 1708)

**Administrative History:** Regulation .09A amended effective January 5, 2004 (30:26 Md. R. 1915)

**Administrative History:** Regulation .09C adopted effective August 1, 1994 (21:15 Md. R. 1307)

**Administrative History:** Regulation .11 amended effective May 28, 1990 (17:10 Md. R. 1220); January 5, 2004 (30:26 Md. R. 1915)

**Administrative History:** Regulation .11E amended effective May 18, 1998 (25:10 Md. R. 748)

**Administrative History:** Regulation .12 amended effective May 28, 1990 (17:10 Md. R. 1220); October 29, 2001 (28:21 Md. R. 1857)

**Administrative History:** Regulation .12A amended effective January 1, 1992 (18:25 Md. R. 2752)

**Administrative History:** Regulation .12C amended effective May 18, 1998 (25:10 Md. R. 748)

**Administrative History:** Regulation .13 amended effective June 19, 1995 (22:12 Md. R. 902); January 29, 1996 (23:2 Md. R. 95)

**Administrative History:** Regulation .13A amended effective January 1, 1992 (18:25 Md. R. 2752)

**Administrative History:** Regulation .13E amended effective July 8, 1991 (18:13 Md. R. 1483)

**Administrative History:** Regulation .13J amended effective June 20, 1983 (10:12 Md. R. 1073); January 1, 1992 (18:25 Md. R. 2752)

**Administrative History:** Regulation .13N amended effective June 20, 1983 (10:12 Md. R. 1073); October 17, 1988 (15:21 Md. R. 2468); January 1, 1992 (18:25 Md. R. 2752)

**Administrative History:** Regulation .13P amended effective January 1, 1992 (18:25 Md. R. 2752)

**Administrative History:** Regulation .14 amended effective August 15, 1983 (10:16 Md. R. 1454); May 19, 1986 (13:10 Md. R. 1157); November 8, 1993 (20:22 Md. R. 1708)

**Administrative History:** Regulation .14A, I, K, L amended effective January 2, 1995 (21:26 Md. R. 2189)

**Administrative History:** Regulation .14B, C, D amended effective July 28, 1986 (13:15 Md. R. 1734)

**Administrative History:** Regulation .14C, G amended effective November 22, 2004 (31:23 Md. R. 1654)

**Administrative History:** Regulation .14J amended effective June 19, 1995 (22:12 Md. R. 902)

**Administrative History:** Regulation .14K adopted effective May 2, 1988 (15:9 Md. R. 1109)

**Administrative History:** Regulation .14M adopted effective June 19, 1995 (22:12 Md. R. 902)

**Administrative History:** Regulation .15E adopted effective November 30, 1987 (14:24 Md. R. 2555)

**Administrative History:** Regulation .17 amended effective October 26, 1981 (8:21 Md. R. 1709); February 22, 1999 (26:4 Md. R. 273)

**Administrative History:** Regulation .19 adopted effective September 12, 1983 (10:18 Md. R. 1609)

**Administrative History:** Regulation .19 repealed effective October 15, 2012 (39:20 Md. R. 1307)

**Administrative History:** Regulation .20 adopted effective May 2, 1988 (15:9 Md. R. 1109)

**Administrative History:** Regulation .21 adopted effective August 6, 1990 (17:15 Md. R. 1861)

**Administrative History:** Regulation .21B amended effective October 23, 2006 (33:21 Md. R. 1677)

**Administrative History:** Regulation .21C amended effective January 1, 1992 (18:25 Md. R. 2752)

**Administrative History:** Regulation .22 adopted effective July 8, 1991 (18:13 Md. R. 1483)

**Administrative History:** Regulation .23 adopted effective January 2, 1995 (21:26 Md. R. 2189)

**Administrative History:** Regulation .23A amended effective February 22, 1999 (26:4 Md. R. 274)

**Administrative History:** Regulation .24 adopted effective June 19, 1995 (22:12 Md. R. 902)

**Administrative History:** Regulation .24 repealed effective October 15, 2012 (39:20 Md. R. 1307)

**Administrative History:** Regulation .25 adopted effective May 6, 1996 (23:9 Md. R. 670)

**Administrative History:** Regulations .01—.25 repealed and new Regulations .01—.23 adopted effective March 13, 2017 (44:5 Md. R. 294)

**Administrative History:** Regulation .01B amended effective March 11, 2019 (46:5 Md. R. 306)

**Administrative History:** Regulation .14D amended effective April 14, 2025 (52:7 Md. R. 323)

**Administrative History:** Regulation .22 amended effective March 11, 2019 (46:5 Md. R. 306)

#### Regulation .01 Definitions.

*COMAR 11.12.01.01*

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

  (1) “Administration” means the Motor Vehicle Administration.

  (2) “Advertising” means any oral, written, or graphic statement which offers vehicles for sale or which indicates the availability of vehicles, including any statements or representations made in any newspaper, pamphlet, circular, other publication, including but not limited to electronic media, radio or television, and in or on any notice, sign, billboard, poster, bill catalog, letter, or business card.

  (3) “Business license” means a license issued by the Administration under Transportation Article, Title 15, Subtitles 2—3, 5, and 6, Annotated Code of Maryland.

  (4) “Clear and conspicuous” means a statement, representation, or term differing from other statements, representations, or terms being made so as to be readily noticeable to the person to whom it is being disclosed either by its size, sound, length of time, color, placement in the advertisement, or the like.

  (5) “Consumer goods” means, as referred to in these regulations, a vehicle offered for retail sale for use by individuals primarily for personal, family, or household purposes.

  (6) “Dealer” has the meaning stated in Transportation Article, §15-101, Annotated Code of Maryland.

  (7) “Dealer cost” means the total amount the dealer is invoiced by the manufacturer for a vehicle.

  (8) “Demonstrator” means a vehicle:

    (a) Of the current or preceding model year for which a title has not been issued;

    (b) Which has been:

      (i) Used solely by the employees, officers, or principals of the dealer, manufacturer, or distributor; or

      (ii) Driven for purposes of customer road testing;

    (c) Which has been driven more than 500 miles, excluding dealer exchange mileage; and

    (d) Which has never been sold to a retail customer, subject to §K of regulation .14 of this chapter.

  (9) “Licensee” means an individual or business entity licensed by the Administration under Transportation Article, Title 15, Subtitles 2—6, Annotated Code of Maryland.

  (10) “Location” means the fixed location from which business activities are conducted and that is specified in the application for the business license.

  (11) “Occupational license” means a vehicle salesman’s license issued by the Administration under Transportation Article, Title 15, Subtitle 4, Annotated Code of Maryland.

  (12) “Rebate, cash rebate, or other similar phrases” means a deduction granted by a dealer or manufacturer from an amount a purchaser pays to a dealer, or a return by a dealer or manufacturer of part of an amount given in payment by a purchaser to a dealer after a sale of a vehicle has been consummated.

  (13) “Representative” means an employee of the business who acts on behalf of the licensee.

  (14) “Service provider” has the meaning stated in Transportation Article, §13-610, Annotated Code of Maryland.

  (15) “Vehicle salesman” has the meaning stated in Transportation Article, §15-101, Annotated Code of Maryland.

#### Regulation .02 Dealer License.

*COMAR 11.12.01.02*

A. The Administration may refuse to grant a license to any person as a dealer or may suspend, revoke, or refuse to continue the license of a dealer already issued, unless the dealer is meeting the requirements set forth in this chapter.

B. A person applying for a dealer license shall submit the application in a format prescribed by the Administration, along with the fee as set forth in COMAR 11.11.05.

C. The business application for license shall state the full business name and all “trading as” or “doing business as” names. Example: ABC Pontiac—GMC—Nissan—Volvo, Inc.; T/A ABC Volvo, T/A ABC Nissan, T/A ABC Pontiac—GMC.

D. A licensee may not do business in a name or under any title or designation other than as registered with the Department of Assessment and Taxation (SDAT) and stated on the license application.

E. A dealer may hold multiple licenses, for example, new or used vehicle, motorcycle, and trailer dealers’ licenses, provided that the licenses are issued in the same dealership name.

F. A dealer license shall be issued for a 3-year period.

#### Regulation .03 Location Requirements.

*COMAR 11.12.01.03*

A. The Administration reserves the right to inspect each location before approval of application for dealer registration and at any time during licensure period.

B. Following approval of the application, the location shall be maintained in accordance with the applicable provisions of Transportation Article, Annotated Code of Maryland, and the regulations promulgated by the Administration.

C. Only one license for the type of vehicle being offered for sale will be permitted at any one location, and once the location has been licensed, it may not be subdivided for the purpose of establishing other businesses, under separate licenses for the same type of vehicle being offered for sale, without the prior approval of the Administration. This prohibition also applies to a licensee doing business under more than one corporate structure.

D. The dealership shall face, adjoin, and be fully visible from an improved street or highway that is accessible to the public and that is identifiable by name or postal number. The street or highway shall be used by the public for vehicular travel.

E. The location shall be of a size to adequately and safely permit the display of a minimum of ten vehicles and space for customer parking.

F. The location shall meet local zoning regulations.

G. The location shall be fully lighted.

H. The display and customer parking areas shall be adequately surfaced with an appropriate covering, subject to approval by the Administration.

I. The additional locations shall be inspected and approved by the Administration.

J. Additional locations shall meet the minimum standards set forth in applicable provisions of the Transportation Article, Annotated Code of Maryland, and the regulations promulgated by the Administration.

K. Additional locations may use registration plates issued to the primary location provided the trade name and ownership are identical to that of the primary location.

L. Locations shall have posted business hours.

M. Signs.

  (1) Appropriate dealership signs shall be permanently affixed.

  (2) The signs shall be of a size as to make them reasonably legible from the street or highway.

  (3) The signs shall clearly identify the business conducted at the dealership and shall adequately direct the customers to the dealership office.

  (4) As to wholesale dealers, a sign is not required. However, if a sign is displayed, it:

    (a) Shall be permanently displayed at the dealership entrance;

    (b) May not use any state emblem; and

    (c) May not contain any language which implies the dealership will sell to or exchange vehicles with a retail buyer.

N. Wholesale dealers shall operate in a fixed location and the space used shall be:

  (1) Owned or leased by the wholesale dealer; and

  (2) Regularly occupied and exclusively used by the wholesale dealer for dealership purposes.

#### Regulation .04 Office Requirements.

*COMAR 11.12.01.04*

A. The dealership office shall be housed at the dealer’s fixed location and in a substantial building adequate and appropriate for the business so conducted.

B. The dealership office shall be of sufficient size to accommodate customers and, in order to reasonably conduct the dealership’s business, shall be equipped with:

  (1) Office furniture, such as desk and chairs;

  (2) A secure area for storage of State property; and

  (3) Electricity, lighting, heat, and telephone service in the name of the dealership.

C. A dealer licensee approved or renewed after September 30, 2017, shall have a continuing contract with a firm that provides electronic registering and titling services to the dealership.

D. Be open for business to the public and open for inspection by the Administration during posted business hours.

E. A current trader’s license shall be issued by the political subdivision of each location.

F. This license shall be displayed as required under Regulation .07 of this chapter.

#### Regulation .05 Exemptions.

*COMAR 11.12.01.05*

A. If a location is otherwise adequate and appropriate, the location requirements outlined in Regulation .03D, E, G, and H of this chapter may be waived for wholesale dealers, for new trailer, boat trailer, motorcycle dealers, and for any person licensed as a dealer to sell only fire, rescue, and emergency medical motor vehicles, who shall have the privilege of assigning manufacturer’s certificates of origin and to issue temporary tags upon filing with the Administration a written franchise agreement from the manufacturer of the vehicles for which the dealer claims a franchise.

B. Once licensed as a dealer to sell fire, rescue, and emergency medical motor vehicles, the dealer shall be prohibited from selling any types of vehicles other than fire, rescue, and emergency medical motor vehicles until the location requirements in Regulations .03 and .04 of this chapter have been met.

C. Manufacturers and distributors are exempt from location requirements for the purpose of securing Class 1A registration plates.

D. The registration of a dealer in the names of two or more persons as partners, or otherwise, may not require a reinspection on a change in ownership as long as one person named as a partner or co-owner remains as the owner, part-owner, or, in a corporation, as one of its legal officers.

#### Regulation .06 Dealer’s Bond.

*COMAR 11.12.01.06*

A. The dealer’s bond shall be secured from a bonding company licensed to do business in Maryland.

B. Each applicant shall file with the Administration, in such form as the Administration shall approve, acceptable evidence of a surety bond in the amount required under Transportation Article, §15-308, Annotated Code of Maryland, which is for the use and benefit of the Administration and the public who may suffer or sustain any loss by reason of any violation of Transportation Article, Titles 12—15, 17, and 23, Annotated Code of Maryland, by a dealer.

C. The bonding company shall give the Administration at least 45 days’ notice by registered or certified mail of the cancellation of the dealer’s bond. Otherwise, the bond is to be considered as being in full force and effect until the notice is received by the Administration.

D. The bond shall run concurrently with the license period and continue, until cancelled, regardless of the number of license renewal periods.

E. The dealer shall notify the Administration and the dealer’s bonding company of any change in the factual or material matters represented or set forth in the application for bond.

#### Regulation .07 Display of License and Dealer’s Number.

*COMAR 11.12.01.07*

The dealer’s license shall be displayed conspicuously in the dealer’s place of business. This particular license is issued in addition to regular registration cards which shall accompany dealer registration plates. Additional licenses may be issued at no cost for each additional approved location, and each license shall be conspicuously displayed in the respective office for which it is issued.

#### Regulation .08 Voluntary Cancellation or Termination of a Franchise.

*COMAR 11.12.01.08*

A. Upon voluntary cancellation or termination of franchise on the part of the dealer, licenses and registration plates shall be immediately returned to the Administration. However, the Administration may grant an extension, upon presentation of documentation acceptable to the Administration, for the purpose of concluding any business of the dealership regarding the disposition of the existing inventory.

B. The dealer shall continue to comply with the surety bond requirements of Transportation Article, §15-205, Annotated Code of Maryland, for any approved extension period.

#### Regulation .09 Duplicate License.

*COMAR 11.12.01.09*

If a dealer’s license becomes lost, mutilated, or illegible, the dealer shall make prompt application to the Administration for the issuance of a duplicate license. Application shall be made in a format prescribed by the Administration, accompanied by required fees as set forth in COMAR 11.11.05.

#### Regulation .10 Records.

*COMAR 11.12.01.10*

A. Records of the dealer business activities shall be preserved in their original form or a format approved by the Administration for a period of time as required by Transportation Article, §15-105, Annotated Code of Maryland.

B. The records shall be accessible at the location approved by the Administration. If location is other than the licensed location, an electronic or other copy must be maintained at the licensed location and consist of but not be limited to:

  (1) Transactions regarding purchases, sales, and transfers of ownership, including those conducted with other licensed dealers and salesmen;

  (2) Collection of excise tax, titling, and registration fees;

  (3) Perpetual inventory of temporary registration plates, certificates, and registration permits assigned to and issued by the dealer. These records shall document the following:

    (a) Accounting of temporary registration plates, certificates and permits issued; and

    (b) An accounting of temporary registration plates, certificates and permits voided including an explanation of the reason for void;

  (4) An assigned title for each untitled vehicle in the dealer’s inventory; and

  (5) While the vehicle is in the possession of prospective retail customers, records documenting the:

    (a) Name of each prospective retail customer of the vehicle;

    (b) Beginning and ending odometer reading of the vehicle for the period each prospective retail customer had possession of the vehicle; and

    (c) Dealer tag number of interchangeable plate displayed on the vehicle.

#### Regulation .11 Issuance of Temporary 60-Day Registration Permits.

*COMAR 11.12.01.11*

A. Each dealer shall electronically make application to the Administration for the temporary 60-day registration permits. Dealers may issue, on the date of delivery, one temporary 60-day registration permit to purchasers of vehicles, who possesses current registration plates issued to another vehicle under the laws of this State provided the registration plates are transferable pursuant to the provisions of the Transportation Article, Annotated Code of Maryland.

B. A dealer shall ensure that motor vehicle liability insurance is in effect before issuing a temporary 60-day registration permit.

C. If the Administrator finds that the dealer is not complying with the provisions of these regulations or the directives of the Administration, the Administrator may disable the rights of a dealership to issue temporary 60-day registration permits.

D. A person to whom a temporary 60-day registration permit has been issued shall permanently destroy the temporary 60-day registration permit immediately upon receiving the transfer registration card covering the annual registration plates, or on the 60th day from the date of issue of the temporary 60-day registration permit, whichever comes first.

#### Regulation .12 Issuance of 60-Day Temporary Registration Plates.

*COMAR 11.12.01.12*

A. The Administration may authorize 60-day temporary registration plates to a dealer after proper electronic application in a format prescribed by the Administration and payment of the required fees as set forth in COMAR 11.11.05.

B. Dealers may issue one 60-day temporary registration plate to a purchaser of a vehicle. Temporary registration plates may be issued on the date of delivery in those instances when delivery occurs on a date after the date of sale. The date of delivery as well as the date of sale shall be clearly reflected on the contract. The 60-day temporary registration certificate shall be signed by the person entitled to receive the plate and by the dealer or the dealer’s authorized agent.

C. A dealer shall ensure that motor vehicle liability insurance is in effect before issuing a 60-day temporary registration plate.

D. If a temporary registration plate is issued to commercial vehicles, the gross weight of the vehicles operating upon the temporary registration plate shall be:

  (1) The allowable gross weight designated on the application for permanent plates; or

  (2) If an application for permanent plates has not been submitted to the Administration, the maximum gross weight allowable for that vehicle.

E. If the Administrator finds that the dealer is not complying with the provisions of these regulations or the directives of the Administration, the Administrator may disable the rights of a dealership to issue temporary 60-day registration plates.

#### Regulation .13 Salesman’s Licensing.

*COMAR 11.12.01.13*

A. Applications for a salesman’s license shall be furnished to the Administration by a licensed dealer.

B. A vehicle salesman may not obtain or the Administration may not issue a license under the provisions of the Transportation Article, Annotated Code of Maryland, unless the salesman complies with the requirements set forth in Transportation Article, Title 13 and Title 15, Annotated Code of Maryland and the requirements contained in these regulations, and pays the required fee as set forth in COMAR 11.11.05.

C. A salesman shall buy and sell motor vehicles only for the dealer indicated upon the salesman’s license and may not be licensed by more than one licensed dealer at a given time except that a salesman licensed to act at a:

  (1) New or used car dealership may act as a vehicle salesman at any new or used dealership that is at least 60 percent owned by the licensed dealer indicated on the salesman’s license; or

  (2) Wholesale vehicle dealership may act as a vehicle salesman at any wholesale dealership that is at least 60 percent owned by the licensed wholesale dealer indicated on the salesman’s license.

D. The salesman’s license shall be in the possession of the salesman when the salesman is buying or selling motor vehicles and shall be displayed upon request.

E. A salesman shall immediately contact the Administration if there is any factual or material change in the information stated in the salesman’s license.

F. If a license becomes lost, mutilated, illegible, the salesman shall promptly make application to the Administration for the issuance of a duplicate or corrected license, as the case may be. Application shall be made on forms to be supplied by the Administration accompanied by required fees, as set forth in COMAR 11.11.05.

G. A dealer shall notify the Administration of a salesmen’s termination of employment as a salesmen, as set forth in Subtitle 15, Transportation Article, Annotated Code of Maryland.

H. Upon termination of employment the salesman shall return any applicable license to the Administration immediately.

I. If a salesman transfers employment to another dealership, a corrected license shall be issued upon receipt of a properly completed application, the fee as set forth in COMAR 11.11.05, and the invalid license.

J. Criminal Background Check.

  (1) Upon application for issuance and renewal of a Salesman license an applicant shall furnish the Administration with an official copy of their criminal history record from the Criminal Justice Information System (CJIS) Central Repository of the Department of Public Safety and Correctional Services. The criminal history record shall be dated within 30 days of the submission date.

  (2) In addition to the other grounds specified in Transportation Article, Title 15 Subtitle 1, Annotated Code of Maryland, for refusal, suspension, or revocation of a license, the Administration may refuse to grant a salesman’s license to any person and may suspend, revoke, or refuse to renew the license of any person if it finds that:

    (a) The person has been convicted by final judgment in any court of a crime of moral turpitude; or

    (b) 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) An applicant or salesman who requests an administrative hearing for a violation under paragraph (2)(a) above may:

    (a) Contest whether the applicant or salesman has been convicted by final judgment in any court of a crime of moral turpitude; and

    (b) Produce evidence to establish convincing proof of the applicant or salesman’s full and complete rehabilitation, and appropriateness for licensure.

K. Suspension of Salesman’s License.

  (1) A salesman’s license shall be suspended by the Administration upon notification by the Department of Human Services, Child Support Enforcement Administration, that the salesman license holder’s failure to pay child support meets the criteria for suspension of a professional license pursuant to Family Law Article, §10-119.3, Annotated Code of Maryland.

  (2) The Administration shall immediately reinstate any salesman’s license suspended for failure to pay child support if notified by the Department of Human Services, Child Support Enforcement Administration, that the suspension should be withdrawn.

#### Regulation .14 Dealers’ Advertising and Trade Practices.

*COMAR 11.12.01.14*

A. Presentation Requirements.

  (1) A dealer may not advertise in any manner that is false, deceptive, or misleading or that misrepresents any vehicle offered for sale.

  (2) Advertisements for the sale of new and used vehicles shall clearly and conspicuously identify the dealership by the corporate name or trade name as it appears on the application for dealer’s license.

  (3) Advertising statements shall clearly identify the vehicle by manufacturer-designated year, make and model, type, equipment, price, trade-in allowance, terms or other claims. Terms or claims shall be factual and presented clearly and conspicuously.

  (4) The use of layout, headlines, illustrations, style, sound, length of time, lighting, color, or type of size of an advertisement, or all of the above, may not obscure or make misleading any material fact in advertisement or sales presentation.

B. Price and Vehicle Identification.

  (1) When the price of a vehicle is quoted, the advertisement shall clearly identify the vehicle as to, including but not limited to, make, year, model and special equipment. A price may not be quoted unless the vehicle or vehicles identified in the advertisement are currently available for sale to the public at the quoted price.

  (2) The advertised price shall:

    (a) Be the full delivered cash price, which the customer shall pay, except for taxes and title fees; and

    (b) In the case of new vehicles, include any dealer processing charge and freight charge, unless the dealer clearly and conspicuously discloses the amount of these charges in the advertisement as required by Transportation Article, §15-311.1, Annotated Code of Maryland.

  (3) Freight and dealer preparation charges may be excluded from manufacturer’s national advertising campaigns. However, the advertisement shall clearly and conspicuously disclose this fact.

C. Comparative Price and Savings Claims.

  (1) Retail advertising may not imply that the dealer has a special relationship or connection to the manufacturer that other dealers do not have. Terms such as “wholesale”, “factory sale”, “factory discount”, “factory outlet”, “factory branch”, and similar terms used in connection with the manufacturer’s name (such as “manufacturer’s outlet”) are examples of terms that imply that a dealer has a special relationship or connection to a manufacturer that other dealers do not have.

  (2) Statements such as “as low as”, “from”, or “priced from” may not be used in connection with the purchase price unless at least one vehicle is specifically identified and the requirements of §B of this regulation are complied with.

D. Advertising, Shipping, and Selling Practices.

  (1) A vehicle offered for sale as consumer goods at a specific price by a dealer shall be in the possession of the dealer advertiser or be available for shipment to the dealer from the manufacturer or distributor. The vehicle shall be shown, demonstrated, and sold, or if a new vehicle, orders shall be taken for future delivery of the identical model at the advertised price and terms. If the advertised vehicle is a used vehicle, and it has been sold as consumer goods, the dealer advertiser shall substantiate, upon request, sales records of the previously advertised vehicle.

  (2) A dealer offering a vehicle for sale as consumer goods may not charge the customer a fee for shipment of a used vehicle that is not available on the premises unless the shipping fee is clearly and conspicuously disclosed on a separate form entitled ‘Payment of a Non-Refundable Shipping Fee’, before the customer becomes obligated to pay the fee, on a form with signature of the customer using the language, “I UNDERSTAND THAT THE VEHICLE IS NOT PHYSICALLY PRESENT ON THE PREMISES AT THIS DEALER LOCATION AND WILL HAVE TO BE SHIPPED FROM ANOTHER LOCATION.  EXCEPT AS PROVIDED BELOW IN ITEMS (A) THROUGH (D), I AGREE TO PAY THE SPECIFIED AMOUNT (INSERT SPECIFIED FEE), NOT TO EXCEED THE ACTUAL AMOUNT INCURRED BY THE DEALERSHIP AS A SHIPPING FEE, WHETHER OR NOT I AGREE TO PURCHASE THE VEHICLE. I UNDERSTAND THAT THIS FEE IN NO WAY OBLIGATES ME TO PURCHASE THE VEHICLE UPON DELIVERY.  I UNDERSTAND THAT THIS FEE IS REFUNDABLE UNDER CERTAIN CIRCUMSTANCES LISTED BELOW:

    (a) The Vehicle is materially different than advertised;

    (b) The vehicle contains undisclosed cosmetic damage or mechanical deficiency that the seller will not repair at the seller’s expense;

    (c) The vehicle contains undisclosed cosmetic damage or mechanical deficiency to the extent that it impacts the retail value classification of the vehicle prior to repairs being made as determined by referencing a nationally recognized vehicle value guide irrespective of the seller making repairs at the seller’s expense; or

    (d) The vehicle or delivery violates any other provision of federal or state law.

  (3) Nothing in this section precludes the fee being financed with the sale of the vehicle if the customer elects to purchase the vehicle.

  (4) Payment of the shipping fee does not obligate the customer to accept and purchase the vehicle in any way.

  (5) The shipping fee must be refunded if the vehicle:

    (a) Is materially different than advertised;

    (b) Contains undisclosed cosmetic damage or a mechanical deficiency that the seller will not repair at the seller’s expense;

    (c) Contains undisclosed cosmetic damage or a mechanical deficiency to the extent that it impacts the retail value classification of the vehicle prior to repairs being made as determined by referencing a nationally recognized vehicle value guide irrespective of the seller making repairs at the seller’s expense; or

    (d) The vehicle or delivery violates any other provision of federal or State law.

  (6) The dealer shall inform the customer of the right to make a complaint with the Administration through use of the Investigative Decision Complaint Form if the customer elects not to purchase the vehicle or returns the vehicle and disagrees with a decision to not issue a refund for shipping charges.

  (7) The practice of increasing the selling price of a vehicle above that originally quoted to a purchaser, after the purchaser has made an initial deposit or payment, either with money or with a trade-in, or signed contract is prohibited, unless the price is increased by the manufacturer. In this case, the dealer shall substantiate, upon request, evidence of the increase, and the customer shall have the right to cancel the contract.

  (8) Advertising a vehicle at a price which does not include equipment with which it is fitted or is ordinarily fitted or eliminating any equipment for the purpose of advertising a low price and baiting the customer into charges above the advertised price is prohibited.

  (9) Advertising the immediate availability of a new vehicle with the intent not to supply reasonable expectable public demand is prohibited unless the advertisement discloses a specific limitation of quantity.

  (10) Advertising a sale or promotion in connection with the sale of a vehicle shall clearly and conspicuously disclose the expiration date, if any, and any other conditions of the sale or promotion, including but not limited to whether the supply is limited and, if so, in what manner.

  (11) The advertising of a specific vehicle offered for sale when the advertised vehicle is not in stock on the date of the advertisement is prohibited unless the advertisement states “Not in Stock” or “Order Yours Now” or other phrases of similar import which clearly indicate that the vehicle is not available for immediate delivery and a reasonable estimate of the period of time in which delivery will be made.

  (12) A dealer is not obligated to refund the shipping fee if the vehicle has been accepted by the customer and the customer has not revoked acceptance within a reasonable period of time.

E. Down Payments, Credit Terms.

  (1) The amount of the down payment, or the balance after the down payment, may not be stated in such a manner as to permit the impression that it is the selling price of the vehicle.

  (2) The statement “no money down”, or other similar phrases, means that the advertiser will deliver the vehicle, so described, to the purchaser without any initial payment or other initial obligation in any manner other than negotiating a lien contract for the advertised purchase price.

  (3) The phrases “no finance charge”, “no carrying charge”, or expressions of similar phrases, may not be used when there is any type of a charge for financed transactions.

  (4) Advertising shall comply with Regulation Z of the Federal Truth in Lending Act and Federal Trade Commission Act.

  (5) Advertisements which offer special annual percentage rate financing shall disclose any special conditions or terms which shall be met before the annual percentage rate applies.

F. Discounts, Savings, Rebates, Trade-In Allowances.

  (1) Advertisement statements which offer discounts, savings, rebates, and guaranteed trades shall:

    (a) Include the original price as well as the full delivered cash price, which the customer shall pay, except for taxes and title fees; and

    (b) In the case of new vehicles, the full delivered cash price shall include any dealer processing charge and freight charge, unless the dealer clearly and conspicuously discloses the amount of these charges in the advertisement as required by Transportation Article, §15-311.1, Annotated Code of Maryland.

  (2) A specific price may not 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 buyer vehicles, without so stating in the advertisement. The use of phrases such as “up to” and “as much as” may not be considered as adequate explanation.

G. Repossessions. The term “repossessed” shall be used only to describe those vehicles legally repossessed as a result of failure of an owner to fulfill the conditions of a lien contract. Advertisers offering repossessed vehicles for sale, upon request, shall offer proof of the repossessions. The amount quoted as an unpaid balance shall be the full selling price unless otherwise stated.

H. Demonstrator Vehicle.

  (1) Demonstrator vehicles are considered used vehicles if they have been driven for more than 7,500 miles.

  (2) The term “new” may not be used as an adjective in the direct description of a demonstrator or used vehicle.

  (3) Except as otherwise provided in §H(5) of this regulation, a dealer shall use the term “demonstrator” when advertising vehicles which meet the definition of that term as found in Regulation .01B(8) of this chapter.

  (4) Before the sale of a demonstrator vehicle, the dealer shall provide to the retail customer a written disclosure in 10-point type, and separate from the purchase contract document, which states: “THIS VEHICLE IS A DEMONSTRATOR VEHICLE. IT IS A VEHICLE WHICH HAS BEEN USED BY THE EMPLOYEES, OFFICERS OR PRINCIPALS OF THE DEALER, MANUFACTURER OR DISTRIBUTOR, OR FOR CUSTOMER ROAD TESTING. FEDERAL LAW REQUIRES A BUYER’S GUIDE TO BE ATTACHED TO THE SIDE WINDOW OF THIS VEHICLE. YOU ARE WELCOME TO INQUIRE AS TO THE SPECIFIC USAGE OF THE VEHICLE FROM THE DATE OF ITS DELIVERY TO THE DEALER. YOU ARE ALSO WELCOME TO CONDUCT WHATEVER INSPECTION YOU DEEM APPROPRIATE PRIOR TO ENTERING INTO AN AGREEMENT TO PURCHASE THE VEHICLE.”

  (5) A vehicle which has been a demonstrator shall be advertised as a used vehicle once it has accumulated mileage in excess of 7,500 miles, and the term “demonstrator” may not be used as an adjective in the direct description of the vehicle. However, these vehicles are not required to be registered or titled before transfer to a retail customer.

I. Disclosure of Vehicle Condition.

  (1) A dealer shall notify the manufacturer of the existence of a nonconformity, defect, or condition as required by Commercial Law Article, §14-1502(f)(1)(i), Annotated Code of Maryland, and shall send a copy of the notification to the Administration as required by Commercial Law Article, §14-1502(f)(1)(i), Annotated Code of Maryland.

  (2) If a motor vehicle is returned to a manufacturer or factory branch under Commercial Law Article, Title 14, Subtitle 15, Automotive Warranty Enforcement Act, the manufacturer or factory branch shall, upon transfer to a dealer, disclose this information to the dealer. The disclosure shall:

    (a) Be in writing on a separate piece of paper in 10-point, all capital type; and

    (b) State in a clear and conspicuous manner:

      (i) That the vehicle was returned to the manufacturer or factory branch;

      (ii) The nature of the defect, if any; and

      (iii) The condition of the vehicle at the time it was transferred to the dealer.

  (3) If a vehicle which has been returned to a manufacturer or factory branch is made available for resale by a dealer, the dealer shall provide a copy of the disclosure described in §I(2) of this regulation to the potential purchaser before the sale.

  (4) After the vehicle is sold, the dealer shall send a copy of the disclosure described in §I(2) of this regulation, signed by the vehicle’s purchaser, to the Administration with the application of title.

J. Vehicle Damage Disclosure.

  (1) If, before consummating the sale of a vehicle which has never been titled, the vehicle has sustained either body damage or mechanical damage resulting in repairs which exceed 3 percent of the Manufacturer Suggested Retail Price, the dealer shall fully disclose this information in writing to the prospective purchaser. The following apply:

    (a) The disclosure shall specify who is providing warranty coverage on the replacement parts; and

    (b) The dealer shall disclose any damage which may affect the:

      (i) Manufacturer’s warranty;

      (ii) Life expectancy of the vehicle; or

      (iii) Safety of the vehicle.

  (2) Upon request of the prospective purchaser or purchasers, the dealer shall provide a copy of the repair order illustrating the extent of repairs conducted to repair the damage.

  (3) If a manufacturer or distributor transfers a vehicle which has never been titled to a dealership, the manufacturer or distributor shall disclose the information contained in §I(2) of this regulation to the dealership, if applicable.

K. A vehicle which has never been titled, but which has been previously delivered to a customer, may be subsequently sold as a new vehicle if the:

  (1) Vehicle has not been used in a manner so as to destroy its newness; and

  (2) Buyer is advised, in writing, of:

    (a) The number of persons to whom the vehicle was previously delivered;

    (b) The mileage accumulated on the vehicle while it was in the possession of each prior customer;

    (c) The reason the prior customers returned the vehicle to the dealer;

    (d) Any other information required by this regulation or any other State or federal law; and

    (e) A written disclosure in 10-point type and separate from the purchase contract document which states: “PART OR ALL OF THE MILEAGE ON THE ODOMETER OF THIS VEHICLE RESULTED FROM PREVIOUS DELIVERY TO A RETAIL PURCHASER WHO NEVER TOOK TITLE TO THE VEHICLE. FEDERAL LAW REQUIRES A BUYER’S GUIDE TO BE ATTACHED TO THE SIDE WINDOW OF THIS VEHICLE. YOU ARE WELCOME TO INQUIRE AS TO THE SPECIFIC USAGE OF THE VEHICLE FROM THE DATE OF ITS DELIVERY TO THE DEALER. YOU ARE ALSO WELCOME TO CONDUCT WHATEVER INSPECTION YOU DEEM APPROPRIATE PRIOR TO ENTERING INTO AN AGREEMENT TO PURCHASE THE VEHICLE.”

L. Disclosure of Former Vehicle Use.

  (1) Vehicles formerly used for a purpose other than a consumer good shall be clearly and conspicuously identified as to their former use. This includes, but is not limited to, vehicles formerly used:

    (a) For public or governmental purposes and normally driven by multiple drivers;

    (b) As executive driven vehicles;

    (c) As demonstrators;

    (d) For driver training;

    (e) As taxicabs; or

    (f) As short-term rental vehicles.

  (2) The word “commercial”, or similar ambiguous terms, may not be used to describe these vehicles.

#### Regulation .15 Vehicle Sales Contracts.

*COMAR 11.12.01.15*

A. Contracts. A vehicle sales contract or agreement shall be evidenced by an instrument in writing containing all of the agreements of the parties. It shall be signed by all parties before the seller delivers to the buyer the vehicle covered by the agreement.

B. Copy of Instrument. At the time the buyer signs the instrument, the seller shall deliver to him an exact copy of it. Until the buyer signs the instrument and receives a copy of it signed by the seller, the buyer or prospective buyer has an unconditional right to cancel the instrument or order and to receive immediate refund of all down payments or deposits made on account of, or in contemplation of, the agreement or order.

C. Terms of Down Payment.

  (1) If, under any vehicle sales contract or agreement, the buyer is required to make one or more payments to the seller in addition to any down payments made at the time of the execution of the instrument before the seller is obligated to deliver the goods sold, then the buyer at any time before delivery or tender of the goods by the seller, may cancel the instrument. Thereupon, notwithstanding any provisions of the instrument, the seller shall be obligated to refund to the buyer, within 10 days after notice of the cancellation, an amount equal to at least 90 percent of all payments made by the buyer under the instrument, including any down payment. If the seller has placed an order for special optional equipment, paint, or similar items, or if, at the request of the buyer, the dealer has modified a vehicle which he has in stock, and the vehicle sales contract has been properly signed by all parties attesting to this fact, if the buyer subsequently cancels the contract before delivery or tender of the vehicle, the seller shall refund the down payment within 10 days after notice of the cancellation, less reasonable expenses incurred in the ordering of or the modification of the vehicle. The contract shall clearly disclose that the dealer may retain a portion of the deposit or down payment to cover any reasonable expenses incurred as a result of the cancellation of the contract. When a portion of the down payment or deposit is retained by the seller, the seller shall furnish the buyer with an itemized list reflecting all expenses incurred as a result of the cancellation of the contract. In disputed cases, the Administration shall decide whether the expenses claimed by the seller are reasonable.

  (2) If, under a vehicle sales contract or agreement, a down payment is made at the time of its execution and the buyer thereby becomes entitled to delivery of the goods before making further payments, then, if the buyer refuses to accept delivery of the goods in accordance with the instrument, all or part of the down payment may be forfeited to the extent provided in the instrument.

D. Cost of Vehicle to be Set Forth. A contract for the sale of any vehicle by a dealer or salesman shall set forth clearly the principal amount of the cost of the vehicle and all interest or other charges made in connection with the sale of the vehicle.

E. Brakes. Dealers shall inform the buyer of a trailer in writing that the trailer brakes shall conform to the requirements of Transportation Article, §22-301, Annotated Code of Maryland.

F. When a purchase order or agreement includes the amount of trade-in allowance, subject to official acceptance and appraisal, that condition shall be clearly and conspicuously stated on the order or agreement. If the order, including the trade-in allowance, has been officially accepted, the trade-in allowance may not be decreased upon re-appraisal unless the condition of the vehicle has been changed due to accident, failure of or damage to major components, or removal or substitution of equipment or accessories.

#### Regulation .16 Sale of New Vehicles by Used Vehicle Dealers.

*COMAR 11.12.01.16*

A. Used vehicle dealers who purchase new vehicles for the purpose of resale shall first have those vehicles titled in this State, paying applicable excise tax based on the purchase price.

B. Before resale, those vehicles shall be inspected at an authorized inspection facility.

#### Regulation .17 Warranties.

*COMAR 11.12.01.17*

A. A dealer who sells a new motor vehicle in this State shall provide to the purchaser a notice that describes the rights and remedies available to consumers under the Maryland Automotive Warranty Enforcement Act, Commercial Law Article, Title 14, subtitle 15, Annotated Code of Maryland.

B. The notice in §A of this regulation shall be:

  (1) Made available by the Motor Vehicle Administration in a format prescribed by the Administration;

  (2) Reproduced by the dealer at the dealer’s cost for reproduction; and

  (3) Given to the purchaser at the time of the sale or delivery of the motor vehicle.

C. Except as provided in Commercial Law Article, §2-316.1(4), a warranty may not contain language which specifically disclaims any implied warranty of merchantability or fitness. Examples of prohibited disclaimers are as follows:

  (1) “This warranty is expressly in lieu of any other warranty, express or implied, including any implied warranty of merchantability or fitness for a particular purpose, and any other obligations or liabilities on the seller’s part”, or similar language that could be construed by a consumer to limit his recourse to the terms of express warranties.

  (2) “This vehicle is being sold as is, without any implied or express warranty of merchantability”, or similar language.

  (3) “Sold used with 50-50 warranty. The dealer hereby guarantees this vehicle for _____ days after ____________, 20____ with the understanding that necessary repairs made within this period of time will be charged half to the buyer and half to the dealer, of total retail cost of parts and labor used,” or similar language.

#### Regulation .18 Dismantling and Rebuilding.

*COMAR 11.12.01.18*

A. If a vehicle is sold for the purpose of dismantling or rebuilding, the term “rebuilding” means the restoring of a salvage vehicle, as set forth in Transportation Article, §13-506(b), Annotated Code of Maryland, or any vehicle which is inoperable due to the need for major or extensive repairs to the body, frame, suspension, engine, or drive train.

B. If a vehicle is sold for the purpose of dismantling or rebuilding, the dealer may not issue any form of temporary registration permit or temporary plate.

#### Regulation .19 Odometer Fraud.

*COMAR 11.12.01.19*

A. A dealer may not transfer a vehicle which contains an odometer reading which does not reflect the actual mileage of the vehicle unless the dealer truthfully informs the transferee in writing:

  (1) That the odometer reading is not the actual mileage of the vehicle and should not be relied upon;

  (2) That the odometer reading reflects the amount of mileage in excess of the designed mechanical odometer limit of 99,999 miles/kilometers of the vehicle;

  (3) That the odometer was repaired or replaced while in the dealer’s possession;

  (4) That the repaired or replacement odometer was incapable of registering the same mileage as the odometer before repair or replacement;

  (5) That the odometer was reset to zero; or

  (6) Of the last known accurate odometer reading.

B. A dealer shall inform the transferee in writing if the dealer knows that the odometer in the vehicle has been altered, set back, disconnected, repaired, or replaced.

C. If the information concerning the odometer for a motor vehicle sold by a dealer is in error under §§A and B of this regulation, the dealer may not be subject to administrative disciplinary action if the dealer did not know, or could not have discovered with reasonable diligence, that the odometer reading or the information provided was incorrect.

D. In determining the degree of administrative disciplinary action for violating §A or B, the Administration shall consider whether the dealer accepts return of the vehicle from the transferee and refunds to the transferee the full purchase price including all excise tax, license fees, registration fees, and any similar governmental charges and any costs incurred by the transferee for repairs resulting from the excess mileage, less:

  (1) An allowance per mile, as determined by the Internal Revenue Service, for the consumer’s use of the vehicle but not to exceed 15 percent of the purchase price; and

  (2) A reasonable allowance for damages not attributable to normal wear.

E. When transferring a motor vehicle, a dealer shall comply with Federal Odometer Requirements, 49 CFR Part 580, as amended.

#### Regulation .20 Use of Interchangeable Dealer Registration Plates.

*COMAR 11.12.01.20*

A. In this regulation, “dealer registration plate” means an interchangeable metal license plate used by licensed vehicle dealers, manufacturers, distributors, and factory branches.

B. Display of Dealer Registration Plates by Licensed Dealers.

  (1) A dealer registration plate may be displayed on a vehicle owned by a licensed dealer and used mainly for the dealer’s business purposes.

  (2) A dealer registration plate may be displayed on a vehicle not owned by a licensed dealer, but in the possession of the dealer, if the dealer has the consent of the owner of the vehicle to this use.

  (3) An owner, partner, or officer of the corporation who is listed on the application for a vehicle dealer’s license or any employee of the dealership may operate a vehicle displaying a dealer registration plate, subject to the other conditions of this regulation.

  (4) A dealer registration plate may be displayed on a vehicle owned by the dealership and operated by a prospective buyer for demonstration purposes for a period of not more than 10 days, provided the prospective buyer has written authorization from the dealership for any use of the vehicle exceeding 1 day.

  (5) A dealer registration plate may be displayed on a vehicle owned by the dealership and loaned to an educational institution as set forth in Transportation Article, §13-621, Annotated Code of Maryland.

C. Issuance of Dealer Registration Plates by the Administration.

  (1) Dealers may apply to the Administration for the issuance of dealer registration plates.

  (2) The Administration may issue up to five dealer registration plates to each licensed dealer in addition to two additional registration plates for each licensed salesman, upon payment of the required fee as set forth in COMAR 11.11.05.

  (3) For good cause shown, the Administration may issue additional dealer registration plates upon application of the dealer.

#### Regulation .21 License Renewal — Staggered Basis.

*COMAR 11.12.01.21*

A. Each month during the calendar year, a proportionately uniform number of business licenses and salesmen licenses shall be renewed.

B. The Administration shall evaluate from time to time the monthly volume of renewals for the purpose of maintaining relatively uniform workloads. The monthly volume of renewals may be rescheduled by applying different expiration months.

C. Renewals shall be due on or before the last day of the month stated on the license. The license shall be considered suspended if the applicant has not met the requirements, or if the Administration is not in receipt of a properly completed renewal application at the close of business on the last day of the stated renewal month.

#### Regulation .22 Service Provider — Electronic Transmission of Titling and Registration Information.

*COMAR 11.12.01.22*

A. Service providers electronically transmitting titling and registration information to the Administration as set forth by Transportation Article, §13-610, Annotated Code of Maryland, may charge the transferee of the vehicle a service fee in addition to any fees specified in Transportation Article, §15.311.1, Annotated Code of Maryland, and COMAR 11.11.05. This service fee may not exceed $20 per electronic transmission.

B. Service fees charged under §A of this regulation are retained by the service provider and are not forwarded to the Administration.

#### Regulation .23 Refund of Licensing Fees.

*COMAR 11.12.01.23*

A. If a dealer license issued under Regulation .01 of this chapter is voluntarily canceled before the:

  (1) Beginning of the second full year, the Administration shall refund the fee paid for the second and third license years; or

  (2) Beginning of the third full year, the Administration shall refund the fee paid for the third license year.

B. Requests for refunds shall be submitted in writing, on forms provided by the Administration, after the cancellation of the registration and before the first day of the second registration year.