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Dealer’s Legal Responsibility to Have Reasonable Procedures like DealerXT

by DealerXT

Did you know that under California Law, you have a legal responsibility to have reasonable procedures in place to prevent errors when closing a deal?

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Ali R: Ali, I’ve heard dealers tell me no matter what I do, I’m still going to get sued. I’m still going to have to pay money. Is there a way for a dealership to avoid having to pay damages, or money, when in a lawsuit?

Ali K: Well, dealers who make those types of statements are clearly ignorant of the law and frankly, they’re ignorant of technology. The fact of the matter is the law actually does provide for a dealership not to pay damages if they made a mistake on something provided that they used reasonable measures and systems to prevent that mistake from happening.

Ali K: The dealerships wind up in lawsuits or end up being sued or a demand letter being sent to them is because they haven’t taken reasonable steps in order to protect themselves. Now, reasonable steps means that as technology goes forward, you as a dealership need to take advantage of those systems in order to prevent mistakes. I’ll give you an example. The use of your time, where every RISC contract that needed to be written was written by hand until DMS companies came forward and had a software that filled out the form for you, calculated the amounts, calculate the taxes, calculate the monthly payments and et cetera. And so, we see the dealerships now use DMS systems in order to fill out their RISC contracts.

Ali K: Well, now there is a way to fill out your disclosures the proper way. So, dealers need to take advantage of that as well. If someone were to tell you that XYZ Dealership is doing their contracts by hand, you’ll lauhg. You’ll wonder why they’re doing it like that and you might even think that it’s unreasonable. Well that’s exactly how it’s going to be when it comes to disclosures.

“At some point, with DealerXT, users of DealerXT will look at other dealerships and say, “I can’t believe they’re still doing their disclosures the old fashioned way.”

-Ali Kamarei, Esq.

Ali K: DealerXT is the system that allows you to fill out your disclosures to make proper disclosures and present that to the customer in a way that it is full proof.

Ali R: Why does Dealer XT satisfy the reasonable procedures legal responsibility of a dealership?

Ali K: Well, part of that reasonableness is that whatever system is employed has to be reasonably priced, reasonably available, and something that dealers can use. And DealerXT satisfies all those conditions. So, there’s no excuse for a dealership not to have a system like that to prevent lack of disclosure or missed disclosures.

This testimonial or endorsement does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter whether you decide to be represented by Auto Legal Group, LLP or not.

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