Section 17 of 20
DMV Dealer Continuing Education
Handling, Completion, and Disposition of DMV Departmental Forms
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Effective January 1, 2019, California Assembly Bill (AB) 516 requires that all Dealers electronically report all vehicles sales and produce TLPs (Temporary License Plates) when needed. Handwritten Reports of Sale on pre-printed forms will no longer be accepted.
The Department of Motor Vehicles (DMV) has contracted with Fairfax Imaging, Inc. to provide California-licensed dealers and lessor-retailers access to the QuickTags system.
With this system, Dealers will print out the Temporary License Plates and Report of Sale forms using a computer and laser printer.
Dealers interested in gaining access to the system should send an email request to Fairfax Imaging at firstname.lastname@example.org Include your Dealership Name, Owner Name, Owner Email Address, and the Owner’s phone number.
Dealers may also use any authorized first-line service provider (FLSP), including:
- American Driving Records, Inc. (Samba/ADR)
- Automated Vehicle Registration Service, Inc. (AVRS)
- Dealertrack Registration and Titling Solutions
- Motor Vehicle Software Corporation (MVSC/VITU)
Temporary License Plates
Vehicles are no longer permitted to operate in California without license plates after a retail sale. If a vehicle does not have both front and rear license plates, the selling Dealer must print and install temporary plates where standard license plate(s) would be mounted.
Dealers must obtain and use weatherproof paper as provided from either Fairfax Imaging or their chosen Service Provider. Two sizes are available; one for vehicles such as automobiles, truck and trailers, and a smaller version for motorcycles.
The TLP will show the TLP number, Report of Sale number, VIN, the vehicle’s Year, Make & Model and Expiration (90 days after the Date of Sale).
The TLP should be secured using all four perforated holes to prevent flapping and ensure the visibility of the plate. If a TLP is damaged, lost, or stolen, the customer must return to the selling Dealer to request a replacement TLP.
New DMV Requirement for All Reports of Sale
After January 1, 2019, Dealers must enter all Reports of Sale online and print them on standard paper. The DMV will no longer accept any of the standard, preprinted Reports of Sale forms.
The registration procedures that dealers currently follow will not change. Dealers may continue to use a First Line Business Provider, DMV Industry Business Centers (IBCs), a Registration Service or by mail to the DMV.
No special paper is required when printing any Report of Sale. Standard “letter” sized paper is acceptable.
The new law applies to all Reports of Sale including:
- REG 51 – Used Report of Sale
- REG 396 – Wholesale Report of Sale
- REG 397 – New Report of Sale
- REG 397A – New Report of Sale, Multiple Vehicles
- REG 398 – Auction Report of Sale
*The DMV has not provided direction on what to do with your DMV-supplied forms. Do not dispose of them until directed to do so by the DMV.
REG 51 – Report of Sale – Used Vehicle
A “Report of Sale — Used Vehicle” (DMV form REG 51) must be completed when you sell a vehicle to a Consumer.
Window copy of Report of Sale
Dealers must continue to attach the bottom tear-off section (bottom 1/3rd) of the Report of Sale to the sold vehicle before delivery to the Buyer.
Choose an area that won’t block the driver’s vision such as the lower, passenger side of the windshield.
This indicates to law enforcement that Registration to the new vehicle owner is underway.
Buyer Demands Title
When a buyer demands the Title for a vehicle purchased -and- it is free of liens -and- the vehicle will remain in California):
- Complete the REG 51 as usual and mark it “customer demands title”
- Enter the Report of Sale number on the back of the title in the applicable space of the dealer reassignment section
- Give the Buyer the Title, supporting documents and Smog Certification (if required)
- Have the Buyer complete a REG 256 stating the reason for demanding the title and confirming receipt of the title and transfer documents. Example: “I demanded and received the certificate of title for the vehicle because I want to do the transfer myself”.
Rollbacks & Voided Transactions (CVC§5901)
A rollback occurs when a buyer returns a vehicle to the Dealer after operating it on the customer copy of the Dealer’s REG 51 Report of Sale.
The Report of Sale cannot be voided when this occurs; all fees are due from the date of sale and must be submitted promptly to DMV.
- A sale canceled prior to operation of the vehicle by the Buyer is not a rollback and the report of sale must be voided.
- If a Buyer’s financing is rejected (requiring a new contract) the application must be handled as a Rollback.
Dealers who refund all vehicle license fees (VLF) to the first Buyer may collect VLF from the second purchaser based on the original purchase price and date of sale.
After January 1, 2019, Dealers are no longer required to mail the stub (carbon copy) of the REG 51 to the DMV in Sacramento.
REG 396 – Wholesale Report of Sale
Dealers and lessor-retailers must report sales of vehicles sold to other California dealers, out-of-state dealers, auto auctions, dismantlers, steel mills, and scrap metal processors on a Wholesale Report of Sale (REG 396).
Dealers are required to mail a copy of the REG 396 to the DMV (within 5 calendar days), provide the Buyer with a copy, and retain one for their own records.
After January 1, 2019, all copies of the REG 396 must be entered online and printed on standard paper
If the Buyer returns the vehicle to the selling Dealer, (a rollback), the Buyer must complete another REG 396 selling it back to the original selling Dealer.
REG 398 – Auction Report of Sale
Dealers selling vehicles at auto auctions must report these sales on a Vehicle Auction Report of Sale
(REG 398). Auctions do not submit a REG 398 on behalf of the seller Dealer.
The REG 398 includes the phrase “sold through” and contains the:
- Name, address, and dealer number of the selling Dealer
- Name, address, and license number of the Dealer conducting the auction
- Date of delivery and the actual odometer mileage reading at the time of delivery
- Name, address, and license number of the dealer buying the vehicle
Dealers are required to mail a copy of the REG 398 to the DMV (within 5 calendar days), provide the Buyer and Auction with printed copies, and retain one for their own records.
After January 1, 2019 the REG 398 must be entered online and printed on standard paper
Storage and security of Reports of Sale
Dealers must securely store all records including their Reports of Sale and are required to “implement Federal Safeguard standards for storage.”
The California Code of Regulations (CCR) Title 13 §§272.00 requires Dealers to:
- Maintain the records vehicle transaction for 18 months at the principal place of business or branch location
- Create an electronic copy of the original record (provided the electronic copy meets specified requirements)
- After 18 months, use an offsite storage facility within the state or third party vendor to maintain records
- Retain all business records relating to vehicle transactions for not less than three years
Dealers must retrieve any requested business records within three days from the notice/request from the DMV