You asked what laws, if any, directly govern auctions of antique automobiles.

SUMMARY

State law requires anyone engaged in the business of selling motor vehicles at auction to be a state-licensed motor vehicle dealer and to get a Department of Motor Vehicles issued permit before conducting the auction. This applies to auctions of antique vehicles as well. State regulations specify that if someone is not a licensed dealer or is not selling vehicles owned by a licensed dealer, the licensing and permit requirements apply if he sells five or more vehicles at one auction or more than 25 in a year.

Motor vehicle auctions may be either dealer-to-dealer or open to the public. Certain requirements apply to all auctions, but several additional ones apply to public auctions. Violation of the license and permit requirement is a class B misdemeanor.

The legislative Regulations Review Committee recently approved a regulation relating specifically to antique motor vehicle auctions. Among other things, it permits an antique vehicle auction to be held someplace other than at the licensed auction dealer’s licensed business location. It allows the commissioner to require a permit applicant to provide evidence that all licenses, permits, and approvals for the location have been secured and that arrangements have been made to protect public health and safety.

Certain types of auction sales are exempt from the law’s requirements including (1) estate sales, (2) sale by a state marshal, (3) sale by a business of vehicles the owner uses to conduct his business or for personal use, and (4) sales of vehicles that are incidental to certain businesses whose primary business is auctioning construction equipment.

GENERAL LICENSE AND PERMIT REQUIREMENTS FOR AUTO AUCTIONS

Motor vehicle auctions, including those involving only antique automobiles, are governed by CGS § 14-65. This law prohibits anyone from engaging in the business of selling motor vehicles at auction unless he is licensed by the Department of Motor Vehicles (DMV) as a new or used car dealer and he has obtained an auction permit from the motor vehicle commissioner. The permit fee is $ 20. Violations of these requirements are class B misdemeanors punishable by a fine of up to $ 1,000, up to six months imprisonment, or both.

Although the law does not explicitly establish what constitutes “engaging in the business of selling motor vehicles as auction,” DMV regulations on motor vehicle auctions establish a threshold below which the requirements do not apply. The regulations state that any person, firm, or corporation who (1) is not licensed as a motor vehicle dealer or (2) is not selling vehicles owned by a licensed motor vehicle dealer is considered an auction dealer subject to the regulations if he sells five or more vehicles at any one auction or more than 25 vehicles during a calendar year. Thus, someone who is not a licensed dealer appears to be exempt from the license and permit requirements as long as he sells fewer than five cars at any single auction and no more than 25 total during the calendar year (Conn. Agencies Regs. § 14-65-4). The regulation also exempts auction sales of motor vehicles that are part of an estate, business, or similar entity that are sold in the normal course of business from being considered sale by an auction dealer.

Entities engaged primarily in the business of conducting auction sales of construction equipment and other special mobile equipment, and incidentally in auction sales of trailers and other motor vehicles at a fixed location in the state are exempt from the requirements if they were engaged in business at the location on or before January 1, 2004.

If an entity accepts motor vehicles on consignment from a licensed dealer that are offered for sale to the public, the consigning dealer must obtain the required auction permit and comply with state laws governing used car warranties.

The auction provisions also do not apply to a vehicle sale by a state marshal or to a private auction sale of vehicles by someone who is not a used car dealer, when they are used by the seller in operating his business or for his personal use.

REQUIREMENTS APPLICABLE TO ALL MOTOR VEHICLE AUCTIONS

Auctions may be either “dealer-to-dealer” where admission to the auction is only allowed to licensed motor vehicle dealers and repairers, motor vehicle leasing companies, and automobile clubs or associations or “dealer-to-public” where the general public is registered, admitted to the premises, and allowed to bid.

For either type of auction, the regulations require:

1. adequate parking for both the vehicles being sold and those attending the auction,

2. conspicuous display of the auction dealer’s permit at the location,

3. advertising and conduct of the auction in the name under which the dealer’s license and auction permits are issued, and

4. announcement by the auction dealer of vehicles with title brands (designations of special circumstances found on the vehicle’s title) or vehicles sold with true mileage unknown. These vehicles must pass an inspection prior to registration.

In addition, the regulations require that the auction dealer get a permit prior to each auction. For auctions held on a regular schedule, permits may be issued up to six months in advance. The motor vehicle commissioner must assign at least one DMV inspector to each auction. The auction dealer must reimburse the commissioner for the cost of the inspector at a rate of $ 150 for four hours or less and $ 300 for longer than four hours.

Totaled or salvaged motor vehicles with a title certificate stamped “Salvage Parts Only” must be sold at auction separately from other vehicles and may only be sold to licensed motor vehicle recyclers. All vehicles offered for sale must have verifiable vehicle identification numbers (VIN) conforming with commercial standards, or a state-issued identification number if it was abandoned, a composite vehicle, or does not have a factory VIN. A vehicle with an altered VIN cannot be sold unless it has been inspected and approved for sale by the DMV inspector. Anyone conducting an auction sale is subject to the laws and penalties governing mutilated or removed VINs, possession of stolen vehicles, and operation of a motor vehicle “chop shop. ”

ADDITIONAL REQUIREMENTS APPLICABLE TO ACTIONS OPEN TO THE PUBLIC

Auctions open to the public must meet several additional requirements.

1. The auction dealer must warrant at time of sale that he is the owner of any vehicle offered for sale at the auction, that it is sold free and clear of encumbrances, and that the dealer must furnish each purchaser with all documents necessary to register the vehicle.

2. Vehicles offered for sale must be available for inspection and demonstration at the auction dealer’s place of business during the full business day of at least eight consecutive hours preceding the auction. The dealer must make an accurate written statement of the vehicle’s condition and any warrantee provisions that apply available to any prospective purchaser during this period. The statement must also contain information such as vehicle model year and make, the last owner, mileage, state where last registered, whether or not it is fit for highway operation, and any other terms and conditions regarding its sale the commissioner requires. A vehicle with a branded title must pass an inspection prior to its sale.

3. The auctioneer must read the statement of condition immediately before accepting bids on a vehicle offered for sale sufficiently clear and loud so as to be heard by those at the auction.

4. Immediately after completing bidding, the auction dealer must provide the successful bidder with an opportunity to examine the vehicle to determine if it conforms to the written statement of condition. If it does not conform, the bidder may withdraw his bid.

ANTIQUE VEHICLE AUCTIONS

On September 27, 2005, the legislative Regulations Review Committee approved an addition to the motor vehicle auction regulations relating to auction sales of antique motor vehicles. The regulation specifies that an auction sale to the public of motor vehicles that are 25 model years old or older may be conducted under a DMV auction permit at a location other than the licensed location of the auction dealer. The commissioner may request that the auction permit application be accompanied by satisfactory evidence that the auction dealer has secured all required licenses, permits, and approvals to allow the use of the proposed location to conduct the sale, including making all arrangements reasonably required to protect public health and safety.

The regulation also permits the commissioner to request that the permit contain the name of any auction company or agent or sponsoring organization, as well as the auction dealer’s name. The auction dealer is responsible for complying with all applicable auction regulations. If a vehicle offered at the auction is not eligible for registration for highway use, this must be publicly noticed and announced before sale of the vehicle begins (Conn. Agencies Regs. § 14-65-5).

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