New Temp Tag Rules: How Will It Impact Dealers?

On February 10, 2022, the Texas Department of Motor Vehicles adopted the much-anticipated new rules for how many temporary tags an automobile dealer will be allowed to issue annually. Here is some basic information you need to know as it relates to independent automobile dealers:

A NEW DEALER

• Will be allowed to issue 300 total temporary tags annually. Tags will be prorated based on when a dealer opens his dealership in the calendar year.
• Can request additional tags by providing credible information indicating that a greater number of tags is warranted based on anticipated sales.
• At the time of renewal, will transition to a maximum limit of tags based on the dealer's sales history, growth rate, and tenure as a dealer.

AN EXISTING DEALER

• Will receive a maximum number of tags based on a combination of the dealer's;
• Last three years of sales,
• growth rate or statewide growth rate,
• and the number of years the dealer has been in business.

This will give the dealer a base number.

The number of tags is then increased by a multiplier based on the dealer's time in operation. The dealer will receive a 10 percent increase in tags for each year the dealer has been in operation up to 10 years (For example, a dealer operating for five years would receive 150% of the base number. If the base number is 200, the dealer would be allotted 300 tags the following year. A dealer operating for ten years would receive 200% of the base number, or 400 tags the following year).

This includes Buyer Tags and Dealer Tags (agent-specific and vehicle-specific).

MOVING LOCATION

An existing dealer or converter moving its operations from one location to a different location will continue with its allotment of temporary tags based on its prior location sales.

DEALER EXPANDING TO ADDITIONAL LOCATIONS

An existing dealer opening an additional location will receive a maximum allotment of temporary tags based on the allotment provided to their other existing locations.

REQUESTING ADDITIONAL TAGS

After using 50 percent of the allotted maximum number of temporary tags, a dealer may request an increase in the number of temporary tags by submitting a request in the eLICENSING system. The dealer or converter must provide information demonstrating the need for additional temporary tags.

TIADA followed this law carefully from the moment it was introduced and throughout the rulemaking process to ensure your voice was heard and independent automobile dealers were effectively represented. You can find the complete rule?here.

This article first appeared on the TIADA Blog: https://www.txiada.org/blog_home.asp?display=418