DMV Backs Off on Use of Law Aimed at Car Brokers
The state Department of Motor Vehicles decided Friday to postpone until next year enforcement of a 1971 law that discount automobile brokers say would drive them out of business.
The announcement came one day after spokesmen for the brokers protested plans by the department to adopt on Nov. 26 a new regulation that would add enforcement teeth to the law and, in effect, close the brokers’ doors.
The department had said that it would begin implementing the statute Jan. 1. The law says, basically, that new and used car dealers must have a vehicle on hand when they advertise or offer it for sale.
Brokers, who do not keep an inventory of automobiles, buy new cars from dealerships and resell them to customers at a price that they maintain the dealer cannot beat.
Taking a Second Look
Bill Gengler, spokesman for the DMV, said Friday that officials decided against enforcing the regulation when the state Office of Administrative Law agreed to take a second look at it. The office recently approved the DMV regulation for adoption.
Assemblyman Richard Katz (D-Sepulveda), a supporter of the brokers and chairman of the Assembly Transportation Committee, charged that the regulation was approved by the administrative law agency “under a cloud” and asked that the action be given a second look.
Gengler said the DMV was notified Friday that the Office of Administrative Law will “review” the matter, and as a result the DMV put the matter on hold.
“We would expect that the review will be completed sometime next year, well after the Legislature has convened,” he said.
Brokers Complained
Katz and representatives of the brokers had complained that the enforcement effort was launched even though the Legislature has before it a bill that would regulate automobile brokers separately from car dealers.
The DMV has long ignored provisions of the 1971 law that would prohibit brokers from offering cars for sale unless they have the vehicles on hand. Broker spokesmen maintain that the law was primarily intended to prohibit “bait and switch” scams in which dealers advertise cars they do not have in order to lure customers into their showrooms.
