VIT: Eliminating the Confusion
Few dealer-compliance issues in Texas raise more questions than how to handle
collecting and paying vehicle inventory tax (commonly referred to as VIT). Since VIT
was instituted in 1994, this tax has raised more than its share of questions. A little
background is helpful in understanding the “why” as well as the "how."
Prior Vehicle Damage Creates Consumer Problem
Dealer Question: Is there a law that makes it illegal to sell a car that had prior
body or frame damage without disclosing the fact?
"Phantom" Charges On Contracts Forbidden by Finance Code
Dealer Questions: Can I include in a motor vehicle installment contract a charge
for agreeing to waive any deficiency against the debtor that might result from a total loss
(also known as a GAP waiver)? How about a charge for agreeing to make repairs to the
Use Care in Buying Sales-Finance Forms
The business of financing motor vehicles is one of the most highly regulated
businesses there is. Various state, federal, and in come cases, local, laws and regulations
come into play when a motor vehicle is sold and financed. There are provisions in the
mountains of paper work used to close sales that are for the benefit of the consumer and
are mandated by law. Some, however, are there to protect the seller-creditor. State and
federal laws often limit what can be included in retail installment contracts for the
creditor’s benefit. Some provisions that are legal in some states are often prohibited in
Dunagan Article Cited in Supreme Court Opinion
An article written by TIADA General Counsel Michael W. Dunagan has been cited in a U.S. Supreme Court opinion concerning the interest rate to be used in calculating payments to car creditors in Chapter 13 bankruptcies. Justice Antonin Scalia, in a dissenting opinion, referred to the article in support of using the contract finance rate as the rate to use in a bankruptcy. He was joined by Chief Justice William Rehnquist, Justice Sandra Day O'Conner, and Justice Anthony Kennedy in his dissent . . .
Rather Case Victory Shows
Value of Dealer Unity
Dealer Gary Sayre was one of many Dallas-area dealers who were paid visits by a private process server in March of 2002. Sixty-one dealers were named as defendants in the initial class action suit filed by a group of plaintiff's attorneys who had targeted Texas buy-here-pay-here dealers. Despite every effort that he and his fellow dealers had made to comply with the admittedly complex federal and state laws and regulations, Sayre was accused of misleading and defrauding his customers by charging interest on deferred sales tax and by generally over-charging on his contracts . . .