AB 807

This bill enumerates certain conduct of consignment motor vehicle dealers as

motor vehicle dealer license violations and requires a higher bonding amount for

consignment motor vehicle dealers. A “consignment motor vehicle dealer” under this

bill is “a motor vehicle dealer that derives at least 90 percent of its income from

vehicle consignment agreements.”

Under current law, a motor vehicle dealer must be licensed by the Department

of Transportation. For a variety of reasons enumerated in existing law, DOT may

seek suspension or revocation of a motor vehicle dealer license and a motor vehicle

dealer may be subject to a forfeiture. This bill enumerates several additional

reasons. Specifically, a consignment motor vehicle dealer who does any of the

following may be subject to a forfeiture or license suspension or revocation:

1. Delivers a consigned motor vehicle to a purchaser before the consignor is paid

in full and title of the vehicle is transferred to the dealer.

2. Uses an electronic process to process an application for transfer of title for

a consignment sale.

3. Sells a motor vehicle that is subject to a lien for less than the full amount of

the lien without the prior written consent of the lienholder.

4. Releases the proceeds from the sale of a motor vehicle that is subject to a lien

without a written release of the lien.

Also under current law, a motor vehicle dealer must provide and maintain in

force a bond or irrevocable letter of credit of not less than $50,000. Under this bill,

a consignment motor vehicle dealer must provide and maintain in force a bond or

irrevocable letter of credit of not less than $500,000.