Team VADA eViews
The Digital Newsletter of Your Virginia Automobile Dealers Association
May - June 2008
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Three different vehicle configurations exist: federal-certified, 50-state certified, and California-certified
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Currently Virginia dealers are authorized to sell only federal-certified and 50-state-certified vehicles
-
In 2011 model-year Virginia dealers will be in a position to sell California-certified vehicles as well
California has adopted some of the country’s most stringent requirements for vehicle emissions. Eleven states have adopted California’s standards for new vehicles sold in those states. This number will increase in upcoming years as other states adopt these standards. For example, Maryland has adopted California standards beginning with 2011 model year vehicles.
New car dealers must be aware of the standards applicable to the new vehicles they sell. Generally, dealers’ franchisors will ship to them the types of cars necessary for sale within their states. However, with the prevalence of dealer exchanges these days, dealers must be careful about the types of cars they purchase from other dealers.
Here are some frequently asked questions about California-certified vehicles.
Why are there differences between California-certified vehicles and other vehicles?
Under the federal Clean Air Act, vehicles introduced into commerce in the United States must be certified to comply with either the federal or California emissions requirements. Some vehicles, so-called “50-state” vehicles, can be sold in any state. California-certified vehicles are configured to be sold and registered in states that have adopted California emission requirements, while federal-certified vehicles are to be sold and registered in states that have not adopted California standards.
As a Virginia dealer, what type of cars should I sell now?
Virginia is not a California standards state, and it is not contiguous to a California standards state. Therefore, dealers should sell cars that are either 50-state certified or federal-certified.
Are there penalties for selling a California-certified new vehicle in Virginia now?
Theoretically yes. In fact under federal law the penalties are rather stiff – up to $27,500 per violation. However, because California vehicles generally meet more stringent air pollution standards, we are not aware of action by either the federal EPA or any state penalizing a dealer for selling a California-certified vehicle in a non-California standards state. And it appears that Virginia DMV is registering California cars.
Are there any changes on the horizon about the vehicles Virginia dealers may sell?
Yes. Because Maryland has adopted California emissions standards as of model year 2011, Virginia dealers will be in a position to sell new 2011 50-state, California-certified, and federal-certified vehicles.
What does this mean when I DX vehicles?
Dealers with whom you discuss DXing who are in states requiring California certification are unlikely to agree to swap vehicles that do not meet their state requirements. Consequently, it is likely that in swaps you will work out a deal for the same types of vehicles (in other words, a federal-certified vehicle for a federal-certified vehicle). However, if you are buying excess inventory from a dealer in another state you must exercise great care. You must be sure that the vehicles you buy can be registered in this state or contiguous states where you may sell.
What does this mean if I am selling to an out of state buyer?
You must be sure that a vehicle you sell can be registered where the buyer intends to do so. For example, if you sell a federal-certified vehicle to a buyer in a state whose DMV will only register 50-state or California-certified vehicles, you will have an irate customer and a likely lawsuit.
Team VADA eViews
The Digital Newsletter of Your Virginia Automobile Dealers Association
May - June 2008
-
Three different vehicle configurations exist: federal-certified, 50-state certified, and California-certified
-
Currently Virginia dealers are authorized to sell only federal-certified and 50-state-certified vehicles
-
In 2011 model-year Virginia dealers will be in a position to sell California-certified vehicles as well
California has adopted some of the country’s most stringent requirements for vehicle emissions. Eleven states have adopted California’s standards for new vehicles sold in those states. This number will increase in upcoming years as other states adopt these standards. For example, Maryland has adopted California standards beginning with 2011 model year vehicles.
New car dealers must be aware of the standards applicable to the new vehicles they sell. Generally, dealers’ franchisors will ship to them the types of cars necessary for sale within their states. However, with the prevalence of dealer exchanges these days, dealers must be careful about the types of cars they purchase from other dealers.
Here are some frequently asked questions about California-certified vehicles.
Why are there differences between California-certified vehicles and other vehicles?
Under the federal Clean Air Act, vehicles introduced into commerce in the United States must be certified to comply with either the federal or California emissions requirements. Some vehicles, so-called “50-state” vehicles, can be sold in any state. California-certified vehicles are configured to be sold and registered in states that have adopted California emission requirements, while federal-certified vehicles are to be sold and registered in states that have not adopted California standards.
As a Virginia dealer, what type of cars should I sell now?
Virginia is not a California standards state, and it is not contiguous to a California standards state. Therefore, dealers should sell cars that are either 50-state certified or federal-certified.
Are there penalties for selling a California-certified new vehicle in Virginia now?
Theoretically yes. In fact under federal law the penalties are rather stiff – up to $27,500 per violation. However, because California vehicles generally meet more stringent air pollution standards, we are not aware of action by either the federal EPA or any state penalizing a dealer for selling a California-certified vehicle in a non-California standards state. And it appears that Virginia DMV is registering California cars.
Are there any changes on the horizon about the vehicles Virginia dealers may sell?
Yes. Because Maryland has adopted California emissions standards as of model year 2011, Virginia dealers will be in a position to sell new 2011 50-state, California-certified, and federal-certified vehicles.
What does this mean when I DX vehicles?
Dealers with whom you discuss DXing who are in states requiring California certification are unlikely to agree to swap vehicles that do not meet their state requirements. Consequently, it is likely that in swaps you will work out a deal for the same types of vehicles (in other words, a federal-certified vehicle for a federal-certified vehicle). However, if you are buying excess inventory from a dealer in another state you must exercise great care. You must be sure that the vehicles you buy can be registered in this state or contiguous states where you may sell.
What does this mean if I am selling to an out of state buyer?
You must be sure that a vehicle you sell can be registered where the buyer intends to do so. For example, if you sell a federal-certified vehicle to a buyer in a state whose DMV will only register 50-state or California-certified vehicles, you will have an irate customer and a likely lawsuit.