Buying Smarter

Buying Smarter

Buying Smarter

Best practices for the regulation of internet vehicle sales

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Have you purchased something online this month, this week or even today? Are you becoming more at ease with purchasing big-ticket items online? Consumers are aware of the ease and convenience of making online purchases. The auto industry in particular is seeing a marked increase in online transactions. Technology expands the search for available vehicles and enables consumers to save a considerable amount of time over traditional vehicle buying methods.

The internet offers a means for private sellers and licensed dealers to expand their markets, as well. It offers the ability for licensed motor vehicle dealers to better position themselves to meet consumer demands in an ever-changing and evolving environment. Individual dealers, groups of dealers and some manufacturers advertise, finance, hold virtual auctions and sell vehicles online. A wide variety of new vehicle sales business models are emerging, with even more likely in the future. Although the internet may ease the buying process, expand the choices for buyers and increase the market for sellers, the internet can also be a conduit for fraudulent activity.

With these new vehicle sales trends, jurisdictions are considering the most up-to-date and effective approaches to protect and educate consumers and to regulate online vehicle sales. This has led jurisdictions to ask AAMVA to provide guidance to help them adapt to evolving online vehicle sales. It is for this reason the AAMVA Internet Vehicle Sales Working Group was established to develop the “Best Practices for the Regulation of Internet Vehicle Sales,” published in December 2019. The document is aimed at helping agencies that administer and enforce dealer licensing.

The working group based their guidance on four principles:

  • Facilitating a consistent and balanced approach to the oversight of internet vehicle sales
  • Recognizing the convenience technology provides to connect vehicle sellers and buyers
  • Identifying and understanding new and potential business models
  • Supporting use of the internet to facilitate vehicle sales while taking steps to deter and detect fraudulent and criminal activities

Cathie Curtis, director of Vehicle Programs at AAMVA, explains that the guidance provides jurisdictions with recommendations for addressing the retail sale of vehicles advertised and sold online by licensed dealers and by private parties. It discusses the challenges of identifying sellers who are engaged in the business of advertising and selling vehicles online but lead buyers to believe they are a private party selling their own vehicle.

Curtis says the working group found most jurisdictions have general advertising laws, rules or policies that were developed many years ago when most advertising was done in newspapers and on television and radio, so it reached only consumers in the local geographical area. Therefore, their current regulations may not address all of the concerns related to internet-based media advertising. The working group also included recommendations to help educate the general public on deceptive internet advertising practices and to help consumers make informed decisions.

To access the Best Practices for the Regulation of Internet Vehicle Sales, visit aamva.org/best-practices.


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