What are the Major Regulatory Changes for Ohio Auto Dealers in 2024?
This year has been eventful for Ohio’s auto dealers, with legislative updates introducing both helpful improvements and challenging new regulations. Below, we cover the key changes impacting dealerships in 2024. If you have questions about any of these developments, feel free to reach out!
1. Documentary Service Fee Increase
S.B. 94 raised Ohio's Documentary Service Charge, permitted by R.C. 4517.261, from $250 to a new rate adjusted annually for inflation, based on the Consumer Price Index. The first increase took effect on October 24, 2024. Moving forward, the Ohio Bureau of Motor Vehicles will publish the updated fee every year on the last day of September.
For the remainder of 2024 and into 2025, the maximum documentary service charge is set at $387 or 10% of the vehicle's cash price, whichever is lower. For instance, if a vehicle sells for $3,500, the doc fee is limited to $350, not the $387 maximum.
2. New Ohio Adaptive Mobility Dealer License
H.B. 195 introduced an Adaptive Mobility Dealer License, effective August 4, 2024. Now, only franchise dealers and licensed adaptive mobility dealers can sell vehicles with specific accessibility modifications. These adaptive motor vehicles include:
- Electronic or mechanical lifts for wheelchair or scooter access
- Wheelchair ramps
- Systems to secure a wheelchair or scooter for safe operation or transport
Used motor vehicle dealers are prohibited from buying or selling adaptive vehicles unless they obtain this specialized license.
3. Remote Document Signing Now Permitted
Previously, Ohio law required all vehicle sales documentation to be signed at the dealership. H.B. 195 modernized this rule, allowing customers to sign purchase or lease documents at a location other than the dealership, including their home or office. While this doesn’t permit off-site vehicle sales or showings, it enables paperwork to be executed electronically or at a remote location, offering more flexibility to buyers.
4. Federal Registration Requirement for Beneficial Ownership
The Corporate Transparency Act mandates that many businesses register with the Department of Treasury, disclosing key information about "beneficial owners" (those who exert significant control over the business or hold 25% or more ownership). Businesses exempt from this requirement include banks, publicly traded companies, entities with over $5M in revenue and 20 employees, and government organizations.
All existing businesses as of 2024 must complete this registration by year-end. New businesses formed after January 1, 2024, have 30 days from creation to report. Updates to the registration are only required when ownership changes. You can file your report here.
5. The FTC’s CARS Rule – Combating Auto Retail Scams
The FTC’s CARS Rule (Combating Auto Retail Scams) took effect in July 2024, introducing stringent requirements to prevent misrepresentations and increase transparency in auto sales. Key requirements include:
- Total Price Disclosure: Dealers must provide the full sale price (excluding government fees) anytime a price is discussed—whether in emails, texts, calls, or chats.
- Clear Payment Terms: If payments are discussed, dealers must disclose all Truth in Lending Act (TILA) terms, including the number, amount, APR, and down payment, as well as the total of payments, in writing.
- Separate Disclosure of Additional Products: Any add-on products or services, such as service contracts or GAP insurance, require separate, oral, and written disclosures. Pre-checked boxes do not satisfy this requirement.
- Record Retention: Dealers are required to retain all communication records—emails, texts, chat messages, etc.—for 24 months, creating a significant administrative burden.
Current Status of the CARS Rule
The National Auto Dealers Association and the Texas Independent Automobile Dealers Association filed a lawsuit against the FTC, arguing that the CARS Rule represents government overreach. While the CARS Rule is currently stayed pending a court decision, the FTC continues to enforce similar requirements through its Unfair and Deceptive Acts or Practices (UDAP) authority. In practice, it’s advisable for dealers to comply with the CARS Rule to avoid potential UDAP violations.
