New Rules Introduced to the Regulation on the Trade in Motor Vehicles

A Regulation on the Trade in Motor Vehicles (the “Regulation”), issued by the Ministry of Trade, was published in the Official Gazette of 27 August 2024 numbered 32645. This Regulation repeals the previous Regulation on the Trade in Second-Hand Motor Vehicles, expanding the scope of regulations for trading in second-hand vehicles and introducing new obligations for distributors and authorised dealers concerning the trade in new vehicles. The key provisions of the Regulation are detailed below.

The Trade in New Motor Vehicles Is Now Covered by the Regulation

The Regulation introduces measures aimed at preventing unfair commercial practices by those engaged in the trade in motor vehicles. Accordingly, unfair commercial practices are defined as activities carried out by distributors that significantly disrupt the commercial operations of authorised dealers, diminish their ability to make reasonable decisions, or result in their involvement in a commercial relationship they would not ordinarily enter into under normal circumstances.

The activities that will be considered unfair commercial practices by distributors under any circumstances are listed as follows:

(i) Forcing an authorised dealer to purchase more vehicles within a month than the monthly average of the dealer’s sales over the past three years;

(ii) Increasing the vehicle price after the invoice date, or failing to deliver the vehicle to the authorized dealer within fifteen days;

(iii) Making the sale of a vehicle conditional upon the purchase of goods or services from oneself or another party;

(iv) Conditioning the authorised dealer’s involvement in vehicle sales campaigns on requirements such as the sale of additional products and services, price reductions, limitations on the dealer’s profit margin, or vehicle sales quotas.

Distributors are also required to ensure that the recommended retail price is accessible online.

Authorised dealers are required not to increase the price of untitled motor vehicles after the buyer has paid the Special Consumption Tax and Value Added Tax, and to deliver the vehicle within fifteen days. Additionally, it is stipulated that establishments engaged in motor vehicle trade cannot engage in other commercial activities beyond insurance, financing, accessories, spare parts sales, and servicing.

New Provisions Have Been Established for Vehicle Orders with a Deposit

The Regulation establishes that, for sales involving a deposit payment and the transfer of untitled motor vehicles, the order form must be prepared and delivered to the buyer on the same day, either in written or electronic form.

It is prohibited to accept any payments or obligations from the buyer without this form.

According to the new provisions, the ordered vehicle must be delivered to the buyer within the period specified in the form, which should not exceed forty-five days. This period is calculated based on the earlier of the two dates: the date when the form was prepared or the date when the deposit was paid.

The Regulation includes provisions aimed at protecting buyers in sales with deposit payment. If the delivery of the vehicle is more than seven days away, the buyer may be required to make a payment or sign an obligation document amounting to no more than 10% of the final sales price. Additionally, the buyer has the right to cancel the order within fourteen days of the date when the order form is prepared, without providing a reason or incurring any penalty. In the event of cancellation, the authorised dealer is required to provide written confirmation to the buyer that the order has indeed been cancelled, and complete the cancellation within ten days.

The Requirements for Obtaining an Authorisation Certificate for Trading in Second-Hand Motor Vehicles Have Been Revised

The requirement for a licence to start and operate a business has been removed from the conditions for obtaining an authorisation certificate for trading in second-hand motor vehicles. However, businesses are still required to obtain a licence to start and operate a business. Furthermore, until 1 March 2025, the high school diploma requirement will not be applied to authorisation certificate applications from businesses that are registered with tax authorities or professional associations.

The Trade in Second-Hand Motor Vehicles Has Been Included Under Warranty Coverage

For motor vehicles that are under eight years old or have travelled less than 160,000 kilometres, a three-month or 5,000-kilometre warranty is required for the engine, transmission and electronic systems. For second-hand vehicles that have been refurbished by the manufacturer, the warranty period is set at one year or 20,000 kilometres.

Repairs for issues covered by the warranty must be completed within forty-five business days, and the downtime will be added to the warranty period. Exclusions from the warranty include wear and tear from normal use, damages known to the buyer, and certain maintenance costs.

A Secure Payment System Requirement Has Been Imposed for the Sale of Second-Hand Motor Vehicles

The Regulation envisages the use of a secure payment system for sales of second-hand motor vehicles, aimed at reducing the risk of fraud. This system provides electronic infrastructure that ensures the simultaneous transfer of vehicle ownership and sale payment when transactions are made via cash, wire transfer, or electronic funds transfer. Additionally, if part of the vehicle’s sale price is covered by a credit institution, any payments outside of the credit must also be made through this system.

These provisions are intended to eliminate the use of counterfeit money, difficulties associated with cash payments, and the risk of non-payment, ensuring that transactions between buyers and sellers are completed securely.

New Provisions Have Been Established to Ensure Transparency and Security in Vehicle Sales Auctions

The objective is to ensure that vehicle sales through electronic auctions are conducted with both transparency and security. In this context, the Regulation stipulates minimum standards such as the publication of auction terms and detailed vehicle information on the auction platform, the determination of auction prices in accordance with fair competition principles, and the prohibition of direct or indirect participation by the auction platform operator and the seller.

Additionally, to prevent misleading price offers and protect competition in online vehicle pre-evaluations, new provisions have been established requiring that the difference between the initial and final offer does not exceed 5%, that each offer remains valid for at least twenty-four hours, and that the final offer is made on the same day as the physical inspection of the vehicle.