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RULE §215.85Brokering, Used Motor Vehicles

(a) Transportation Code, §503.021 prohibits a person from engaging in business as a dealer, directly or indirectly, including by consignment without a GDN. Except as provided by this section, "directly or indirectly" includes the practice of arranging or offering to arrange a transaction involving the sale of a used motor vehicle for a fee, commission, or other valuable consideration. A person who is a bona fide employee of a dealer holding a GDN and acts for the dealer is not a broker for the purposes of this section.

(b) A buyer referral service, program, plan, club, or any other entity that accepts a fee for arranging a transaction involving the sale of a used motor vehicle is required to meet the requirements for and obtain a GDN, unless the referral service, program, plan, or club is operated in the following manner.

  (1) There is no exclusive market area offered to a dealer by the program. All dealers are allowed to participate in the program on equal terms.

  (2) Participation by a dealer in the program is not restricted by conditions, such as limiting the number of line-makes or discrimination by size of dealership or location. The total number of participants in the program may be restricted if the program is offered to all dealers at the same time, with no regard to the line-make.

  (3) All participants pay the same fee for participation in the program. The program fee shall be a weekly, monthly, or annual fee, regardless of the size, location, or line-makes sold by the dealer.

  (4) A person is not to be charged a fee on a per referral fee basis or any other basis that could be considered a transaction-related fee.

  (5) The program does not set or suggest to the dealer any price of a motor vehicle or a trade-in.

  (6) The program does not advertise or promote its plan in a manner that implies that the buyer, as a customer of that program, receives a special discounted price that cannot be obtained unless the customer is referred through that program.

(c) All programs must comply with Subchapter H of this chapter (relating to Advertising).

(d) A licensed dealer holding a GDN pursuant to Transportation Code, §503.029(a)(6)(B), may pay a referral fee in cash or value to an individual who has purchased a vehicle from the licensed dealer within the four-year period preceding the referral. The fee may be paid contingent upon either the new referred individual:

  (1) purchasing a vehicle from the independent motor vehicle dealer; or

  (2) the referral of a new potential purchaser.

Source Note: The provisions of this §215.85 adopted to be effective February 11, 2010, 35 TexReg 883; amended to be effective February 13, 2017, 42 TexReg 571; amended to be effective September 10, 2018, 43 TexReg 5809

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