the dangers of selling to a minor and sold a vehicle to a 17-year-old for cash. The minor’s father then began making threatening calls to the dealer and sending threatening letters. After complaining to the Division of Motor Vehicles and the Better Business Bureau, the father finally presented a formal demand. He wanted the dealer to sell all 11 cars on the dealer’s lot to him for one dollar each. If the dealer refused, the father would bring in the legal big dogs. I advised the dealer 2021 TLSAA Lubbock_TIADA ad.pdf
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to offer the minor all his money back upon return of the vehicle and to refuse the father’s blackmail demand. The best way to handle the situation where a vehicle is being purchased for use by a minor is to have all papers (title transfer as well as bill of sale and installment contract) list the parent as buyer. The parent can then make a gift transfer of the title to the child without having to pay tax again. (A flat minimum tax is assessed on gift transfers.) 2/28/21
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It is a good policy to make a copy of the driver’s license of any purchaser, but especially when the buyer is young and might be under 18. It is a good policy to make a copy of the driver’s license of any purchaser, but especially when the buyer is young and might be under 18. If a false I.D. is given by a minor indicating he or she is over 18, the seller has a defense against the sale to a minor charge. But if the seller doesn’t have a copy of the driver’s license in the file, the defense can’t be proven. It might be a good idea to make copies of this article and show it to all sales, title, and F&I personnel and include it in the dealership’s compliance and procedure manual. Keep a copy handy so you can pull it out the next time another dealer tells you it’s legal to sell to a 17-year-old, as long as it’s for cash. It might be wishful thinking on my part, but it would be nice to never have to take another call from a dealer that starts out: “I just sold a car to a 17-year-old who totalled the car (uninsured, of course) and his parents are demanding the money back.”
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Michael W. Dunagan is an attorney in Dallas, Texas who has represented the Texas Independent Automobile Dealers Association for over 40 years. He has written a number of books and hundreds of articles for trade journals and law reviews. His clientele includes dealers, banks, finance companies, auto auctions and credit unions. 12
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March 2021