now: financing arrangements;
motor vehicle transactions
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Committee on Transportation |
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Committee on Financial Institutions and Insurance |
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Caucus and COW |
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As Passed the House |
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Senate Bill 1163 requires motor vehicle dealers to retain the title and possession of traded vehicles until financing arrangements are complete. SB 1163 also stipulates that remedies for violations of this provision cannot be waived or changed by contract.
According to the Arizona Automobile Dealers Association, “spot delivery” is the practice by which motor vehicle dealers allow customers to take a vehicle before the dealer makes final arrangements to place the customer’s loan or lease contract with a lender. The sale of the vehicle is not final until the financial institution sends the dealer the money for the price of the vehicle. When motor vehicle dealers are unable to place contracts for the interest rate and down payment to which the customer agreed, the dealer must notify the customer that financing arrangements have failed.
Agreements to buy or lease a motor vehicle from a dealer depend on final approval of the financing arrangements from a lender. If the customer trades in a motor vehicle as a down payment for another vehicle, the dealer may sell the trade-in before the lender approves financing for the customer. If the lender refuses to finance the transaction, and the dealer sold the traded vehicle, the customer must negotiate with the dealer to either obtain the value of the trade-in or to obtain financing by some other method.