1. A person shall not engage in this state in the business of selling at retail new motor vehicles of any make or represent or advertise that the person is engaged or intends to engage in such business in this state unless the person is authorized to do so by a contract in writing with the manufacturer or distributor of such make of new motor vehicles and unless the department has licensed the person as a motor vehicle dealer in this state in motor vehicles of such make and has issued to the person a license in writing as provided in this chapter. Notwithstanding the prohibitions in this subsection, a final-stage manufacturer of multi-stage manufactured vehicles that holds a used motor vehicle dealer license issued pursuant to this chapter may assign an incomplete motor vehicle‘s manufacturer’s statement of origin to a retail buyer for purposes of issuance of a certificate of title by a county treasurer as a new motor vehicle with the same make as the incomplete motor vehicle without holding a new motor vehicle dealer license and without paying any associated motor vehicle registration fees. A licensed dealer in new motor vehicles may also assign an incomplete motor vehicle’s manufacturer’s statement of origin in the same manner as provided in this subsection.

Terms Used In Iowa Code 322.3

  • Appeal: A request made after a trial, asking another court (usually the court of appeals) to decide whether the trial was conducted properly. To make such a request is "to appeal" or "to take an appeal." One who appeals is called the appellant.
  • At retail: means to dispose of a motor vehicle to a person who will devote it to a consumer use. See Iowa Code 322.2
  • buyer: means a person who buys a motor vehicle from a retail seller. See Iowa Code 322.2
  • Condition: means a general problem that may be attributable to a defect in more than one part. See Iowa Code 322G.2
  • Consumer: means the purchaser or lessee, other than for purposes of lease or resale, of a new or previously untitled motor vehicle, or any other person entitled by the terms of the warranty to enforce the obligations of the warranty during the duration of the lemon law rights period. See Iowa Code 322G.2
  • Contract: A legal written agreement that becomes binding when signed.
  • contract: means an agreement, entered into in this state, pursuant to which the title to, the property in or a lien upon the motor vehicle, which is the subject matter of a retail installment transaction, is retained or taken by a retail seller from a retail buyer as security, in whole or in part, for the buyer's obligation. See Iowa Code 322.2
  • Conviction: A judgement of guilt against a criminal defendant.
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Days: means calendar days. See Iowa Code 322G.2
  • Department: means the state department of transportation. See Iowa Code 322.2
  • Distributor: means a person, resident or nonresident, who sells or distributes all-terrain vehicles to all-terrain vehicle dealers in this state or who maintains distributor representatives. See Iowa Code 321I.1
  • Engaged in the business: means doing any of the following acts for the purpose of the sale of motor vehicles at retail: acquiring, selling, exchanging, holding, offering, displaying, brokering, accepting on consignment, conducting a retail auction, advertising as being engaged in any of those acts, or acting as an agent for the purpose of doing any of those acts. See Iowa Code 322.2
  • Final-stage manufacturer: means a person who performs such manufacturing operations on an incomplete motor vehicle that it becomes a completed motor vehicle. See Iowa Code 322.2
  • following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
  • Incomplete motor vehicle: means an assemblage consisting, at a minimum, of frame and chassis structure, power train, steering system, suspension system, and braking system to the extent that those systems are to be part of a completed motor vehicle, that requires further manufacturing operations, other than the addition of readily attachable components, such as mirrors or tire and rim assemblies, or minor finishing operations such as painting, to become a completed motor vehicle. See Iowa Code 322.2
  • Incomplete motor vehicle manufacturer: means a person who manufactures an incomplete motor vehicle by assembling components none of which, taken separately, constitute a completed motor vehicle. See Iowa Code 322.2
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Lien: A claim against real or personal property in satisfaction of a debt.
  • Manufacturer: includes a person who uses a completed motor vehicle manufactured by another person to construct a class "B" motor home as defined in section 321. See Iowa Code 322.2
  • Motor vehicle: means any self-propelled vehicle subject to registration under chapter 321. See Iowa Code 322.2
  • Operate: means to ride in or on, other than as a passenger, use, or control the operation of an all-terrain vehicle in any manner, whether or not the all-terrain vehicle is moving. See Iowa Code 321I.1
  • Owner: means a person, other than a lienholder, having the property right in or title to an all-terrain vehicle. See Iowa Code 321I.1
  • Person: includes any individual, firm, corporation, partnership, joint adventure, or association, and the plural as well as the singular number. See Iowa Code 322.2
  • Place of business: means a designated location wherein proper and adequate facilities shall be maintained for displaying, reconditioning, and repairing either new or used cars. See Iowa Code 322.2
  • seller: means a person who sells a motor vehicle to a retail buyer. See Iowa Code 322.2
  • Selling: includes bartering, exchanging, delivering, or otherwise dealing in. See Iowa Code 322.2
  • state: when applied to the different parts of the United States, includes the District of Columbia and the territories, and the words "United States" may include the said district and territories. See Iowa Code 4.1
  • Vehicle: means any vehicle as defined in chapter 321. See Iowa Code 321H.2
  • Warranty: means any written warranty issued by the manufacturer; or any affirmation of fact or promise made by the manufacturer, excluding statements made by the dealer, in connection with the sale or lease of a motor vehicle to a consumer, which relates to the nature of the material or workmanship and affirms or promises that the material or workmanship is free of defects or will meet a specified level of performance. See Iowa Code 322G.2
  • week: means seven consecutive days. See Iowa Code 4.1
  • wholesaler: means a person, resident or nonresident, who in whole or part, sells or distributes motor vehicles to motor vehicle dealers, or who maintains distributor representatives. See Iowa Code 322.2
  • year: means twelve consecutive months. See Iowa Code 4.1
 2. A person other than a licensed dealer in new motor vehicles shall not engage in this state in the business of selling at retail used motor vehicles or represent or advertise that the person is engaged or intends to engage in such business in this state unless and until the department has licensed the person as a used motor vehicle dealer in the state and has issued to the person a license in writing as provided in this chapter.
 3. Subsections 1, 2, and 16 shall not be construed to require the separate licensing of persons employed as salespersons of motor vehicles by a retail motor vehicle dealer. However, the department may promulgate reasonable rules as necessary for the proper identification of persons employed as salespersons.
 4. A person who is engaged in the business of selling at retail motor vehicles shall not enter into any contract, agreement, or understanding, express or implied, with any manufacturer or distributor of any such motor vehicles that the person will sell, assign, or transfer any retail installment contracts arising from the retail installment sale of such motor vehicles only to a designated person or class of persons. A condition, agreement, or understanding between any manufacturer or distributor and a motor vehicle dealer in this state of this nature is hereby declared to be against the public policy of this state and to be unlawful and void.
 5. A manufacturer or distributor of motor vehicles or any agent or representative of a manufacturer or distributor shall not terminate, threaten to terminate, or fail to renew any contract, agreement, or understanding for the sale of new motor vehicles to any motor vehicle dealer in this state without just, reasonable, and lawful cause or because the motor vehicle dealer failed to sell, assign, or transfer any retail installment contract arising from the retail sale of such motor vehicles or any one or more of them to a person or a class of persons designated by the manufacturer or distributor.
 6. A person who is engaged in the business of selling at retail motor vehicles shall not make and enter into a retail installment contract unless the contract meets the following requirements:

 a. Every retail installment contract shall be in writing, shall be signed by both the buyer and the seller, and shall be completed as to all essential provisions prior to the signing of the contract by the buyer except that, if delivery of the motor vehicle is not made at the time of the execution of the contract, the identifying numbers or marks of the motor vehicle or similar information and the due date of the first installment may be inserted in the contract after its execution.
 b. The contract shall comply with the Iowa consumer credit code, chapter 537, where applicable.
 7. This section shall not be construed to require that a place of business as defined in this chapter shall be maintained by a person selling motor vehicles at retail solely for the purpose of disposing of motor vehicles acquired or repossessed by such person in exercise of powers or rights granted by lien or title-retention instruments or contracts given as security for loans or purchase money obligations.
 8. A manufacturer or distributor of motor vehicles or agent or representative of a manufacturer or distributor shall not coerce or attempt to coerce any motor vehicle dealer to accept delivery of any motor vehicle or vehicles, parts, or accessories, or any other commodity or commodities which have not been ordered by the dealer.
 9. A person licensed under this chapter shall not, either directly or through an agent, salesperson, or employee, engage in this state, or represent or advertise that the person is engaged or intends to engage in this state, in the business of buying or selling at retail new or used motor vehicles, other than mobile homes more than eight feet in width or more than thirty-two feet in length as defined in section 321.1, on the first day of the week, commonly known and designated as Sunday.
 10. A manufacturer, distributor, or importer of motor vehicles or agent or representative of such manufacturer, distributor, or importer shall not require a motor vehicle dealer to submit to arbitration to resolve a controversy before the controversy arises. The parties may enter into a voluntary agreement to arbitrate a controversy after it arises. Such an agreement shall require that the arbitrator apply Iowa law in resolving the controversy. Either party may appeal a decision of an arbitrator to the district court on the grounds that the arbitrator failed to apply Iowa law.
 11. A person who is engaged in the business of selling motor vehicles at retail shall not sell, offer for sale, display, represent, or advertise that the person intends to sell motor vehicles from a location other than the person’s place of business, except as provided in section 322.5.
 12. A person who has been convicted of a fraudulent practice, has been convicted of three or more violations of section 321.92, subsection 2, or section 321.99, has been convicted of three or more violations of subsection 16 of this section in the previous three-year period, or has been convicted of any other indictable offense in connection with selling or other activity relating to motor vehicles, in this state or any other state, shall not for a period of five years from the date of conviction be an owner, salesperson, employee, officer of a corporation, or representative of a licensed motor vehicle dealer or represent themselves as an owner, salesperson, employee, officer of a corporation, or representative of a licensed motor vehicle dealer.
 13. a. A manufacturer, distributor, or importer of motor vehicles or agent or representative of such manufacturer, distributor, or importer shall not reduce the amount of compensation for, or disallow a claim for, any of the following if twelve months or more have passed since the claim was submitted to the manufacturer, distributor, or importer or agent or representative thereof:

 (1) Warranty parts, repairs, or service supplied by a motor vehicle dealer.
 (2) Sales or leasing incentives provided to a motor vehicle dealer or to a customer of a motor vehicle dealer including but not limited to rebates and discounted interest rates.
 b. The twelve-month limitation shall not apply if a court of competent jurisdiction in this state finds the claim was fraudulent.
 14. A manufacturer or importer shall not directly or indirectly be licensed as, own an interest in, operate, or control a motor vehicle dealer. This subsection shall not prohibit any of the following:

 a. A manufacturer or importer from being licensed as a motor vehicle dealer or owning an interest in, operating, or controlling a motor vehicle dealership for a period not to exceed one year to facilitate transfer of the motor vehicle dealership to a new owner if both of the following apply:

 (1) The prior owner transferred the motor vehicle dealership to the manufacturer or importer.
 (2) The motor vehicle dealership is continuously offered for sale by the manufacturer or importer upon reasonable terms and conditions.
 b. A manufacturer or importer from temporarily owning an interest in a motor vehicle dealership for the purpose of enhancing opportunities for persons who lack the financial resources to purchase the motor vehicle dealership without such assistance. A manufacturer or importer may temporarily own an interest in a motor vehicle dealership pursuant to this paragraph only if the manufacturer or importer enters into a contract with a person pursuant to which all of the following apply:

 (1) The person operates the motor vehicle dealership.
 (2) The person has made a significant financial investment in the motor vehicle dealership and is subject to loss on such investment.
 (3) The person has an ownership interest in the motor vehicle dealership.
 (4) The person will acquire full ownership of the motor vehicle dealership within a reasonable time under reasonable conditions.
 c. A manufacturer or importer from owning an interest in, operating, or controlling a person whose primary business is renting motor vehicles and who is licensed as a used motor vehicle dealer.
 d. A manufacturer of motor homes, as defined in section 321.1, from owning an interest in, operating, or controlling a motor vehicle dealer of the motor homes manufactured by that manufacturer or from being licensed as a motor vehicle dealer only of the motor homes manufactured by that manufacturer.
 e. A manufacturer from owning a minority interest in an entity that owns and operates motor vehicle dealers, licensed under this chapter or the laws of the jurisdiction in which they are located, of the line-make manufactured by the manufacturer if all of the motor vehicle dealers owned and operated by the entity in this state are motor vehicle dealers of only the line-make manufactured by the manufacturer and if, on January 1, 2000, there were not less than one and not more than three motor vehicle dealers of that line-make licensed under this chapter.
 f. A final-stage manufacturer of multi-stage manufactured vehicles from being licensed as a used motor vehicle dealer or from assigning an incomplete motor vehicle’s manufacturer’s statement of origin to a retail buyer for purposes of issuance of a certificate of title by a county treasurer as a new motor vehicle with the same make as the incomplete motor vehicle without holding a new motor vehicle dealer license and without paying any associated motor vehicle registration fees. This paragraph shall not be construed to authorize a manufacturer or incomplete motor vehicle manufacturer to directly sell at retail incomplete or completed motor vehicles to a retail buyer except as provided in this subsection.
 15. A manufacturer, distributor, or importer of motor vehicles or an agent or representative of a manufacturer, distributor, or importer shall not reduce the amount of compensation for, or disallow a claim for, warranty parts, repairs, or service supplied by a motor vehicle dealer on the grounds that the dealer failed to submit a claim fewer than sixty days after the motor vehicle dealer completed the work underlying the claim for warranty parts, repairs, or service.
 16. A motor vehicle dealer or wholesaler licensed under this chapter shall not sell, loan, rent, lease, or charge a fee for the use of the license to another person for the purpose of allowing the person to engage in the business of selling motor vehicles.
  Previous section
Next section  
 Chapter 322 Contents