§ 49-1613 — UNLAWFUL ACTS BY LICENSEE

Idaho § 49-1613

• Jurisdiction: Idaho
• Title 49: MOTOR VEHICLES
• Ch. 16: DEALERS AND SALESMEN LICENSING

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(1) It shall be unlawful for the holder of any license issued under the provisions of this chapter to:
(a) Intentionally publish or circulate any advertising that is misleading or inaccurate in any material particular or that misrepresents any of the products sold or furnished by a licensed dealer;
(b) Violate any of the provisions of this chapter or any of the applicable rules;
(c) Knowingly purchase, sell or otherwise acquire or dispose of a stolen vehicle;
(d) Violate any law respecting commerce in vehicles or any lawful rule respecting commerce in vehicles promulgated by any licensing or regulating authority now existing or hereafter created by the laws of the state;
(e) Engage in the business for which the dealer is licensed without at all times maintaining a principal place of business;
(f) Engage in a type of business respecting the selling or exchanging of vehicles for which he is not licensed;
(g) Knowingly purchase a vehicle that has an altered or removed vehicle identification number plate or alter or remove a vehicle identification number plate;
(h) Violate any provision of this title or any rules promulgated;
(i) Violate any provision of the federal motor vehicle safety standards, federal odometer laws or regulations;
(j) Display for sale, exchange, or sell any vehicle for which the vehicle dealer does not hold title or consignment agreement or other documentary evidence of his right to the possession of every vehicle in his possession; or
(k) Issue more than one (1) temporary permit per vehicle sale pursuant to the provisions set forth in section 49-504 (6), Idaho Code.
(2) It shall be unlawful for any manufacturer or distributor licensed under this chapter to require, attempt to require, coerce, or attempt to coerce, any new vehicle dealer in this state to:
(a) Order or accept delivery of any new vehicle, part or accessory, equipment or any other commodity not required by law that shall not have been voluntarily ordered by the new vehicle dealer. This paragraph is not intended to modify or supersede any terms or provisions of a franchise requiring dealers to market a representative line of vehicles that the manufacturer or distributor is publicly advertising.
(b) Order or accept delivery of any new vehicle with special features, accessories or equipment not included in the list price of such vehicles as publicly advertised by the manufacturer or distributor.
(c) Participate monetarily in an advertising campaign or contest, or to purchase any promotional materials, training materials, showroom or other display decorations or materials at the expense of the dealer.
(d) Enter into any agreement with the manufacturer or distributor or to do any other act prejudicial to the dealer by threatening to terminate or cancel a franchise or any contractual agreement existing between the dealer and the manufacturer or distributor. This paragraph is not intended to preclude the manufacturer or distributor from insisting on compliance with reasonable terms or provisions of the franchise or other contractual agreement, and notice in good faith to any dealer of the dealer’s violation of those terms or provisions shall not constitute a violation of the provisions of this chapter.
(e) Change the capital structure of the dealer or the means by or through which the dealer finances the operation of the dealership, provided that the dealer at all times meets any reasonable capital standards determined by the manufacturer or distributor in accordance with uniformly applied criteria. No change in the capital structure shall cause a change in the principal management or have the effect of a sale of the franchise without the consent of the manufacturer or distributor. Consent shall not be unreasonably withheld.
(f) Refrain from participation in the management of, investment in, or the acquisition of any other line of new vehicle or related products. This paragraph does not apply unless the dealer maintains a reasonable line of credit for each make or line of new vehicle, and the dealer remains in compliance with any reasonable facilities requirements of the manufacturer or distributor, and no change is made in the principal management of the dealership.
(g) Prospectively assent to a release, assignment, novation, waiver or estoppel that would relieve any person from liability to be imposed by this chapter or to require any controversy between a dealer and a manufacturer, distributor, or representatives, to be referred to any person other than the duly constituted courts of the state or the United States, or to the director, if that referral would be binding upon the dealer.
(h) Either establish or maintain exclusive facilities, personnel, or display space.
(i) Expand facilities without a written guarantee of a sufficient supply of new vehicles so as to justify an expansion, in light of the market and economic conditions.
(j) Make significant modifications to an existing dealership or to construct a new vehicle dealership facility without providing a written guarantee of a sufficient supply of new vehicles so as to justify modification or construction, in light of the market and economic conditions.
(3) It shall be unlawful for any manufacturer or distributor licensed under this chapter to:
(a) Delay, refuse, or fail to deliver new vehicles or new vehicle parts or accessories in a reasonable time, and in reasonable quantity, relative to the dealer’s facilities and sales potential in the dealer’s relevant market area, after acceptance of an order from a dealer having a franchise for the retail sale of any new vehicle sold or distributed by the manufacturer or distributor, any new vehicle, parts or accessories to new vehicles as are covered by the franchise, if the vehicle, parts, or accessories are publicly advertised as being available for delivery or actually being delivered. These provisions are not violated, however, if failure is caused by acts or causes beyond the control of the manufacturer or distributor.
(b) Refuse to disclose to any dealer handling the same line, the manner and mode of distribution of that line within this state.
(c) Obtain money, goods, service, or any other benefit from any other person with whom the dealer does business, on account of, or in relation to, the transaction between the dealer and other person, other than for compensation for services rendered, unless the benefit is promptly accounted for and transmitted to the dealer.
(d) Increase prices of new vehicles that the dealer had ordered for consumers prior to the dealer’s receipt of the written official price increase notification. A sales contract signed by a consumer shall constitute evidence of each such order, provided that the vehicle is in fact delivered to that customer. In the event of manufacturer or distributor price reductions or cash rebates paid to the dealer, the amount of any reduction or rebate received by a dealer shall be passed on to the private retail consumer by the dealer. Price reductions shall apply to all vehicles in the dealer’s inventory that were subject to the price reduction. Price differences applicable to new model or series shall not be considered a price increase or price decrease. Price changes caused by the addition to a vehicle of required or optional equipment, or revaluation of the United States dollar, in the case of foreign-make vehicles or components, or an increase in transportation charges due to increased rates imposed by a carrier, shall not be subject to the provisions of this subsection.
(e) Release to any outside party, except under subpoena or as otherwise required by law or in an administrative, judicial or arbitration proceeding involving the manufacturer or distributor or dealer, any business, financial, or personal information which may be provided from time to time by the dealer to the manufacturer or distributor without the express written consent of the dealer.
(f) Deny any dealer the right of free association with any other dealer for any lawful purpose.
(g) Compete with their franchised dealers in this state in the sale, lease, or warranty service of new motor vehicles to retail consumers. However, nothing in this section shall limit or apply to a manufacturer’s or a distributor’s fleet sales or leases with a fleet customer that has a designation as such by the manufacturer or distributor as long as such sales or leases are conducted with the involvement of a dealer of the same line make. Nothing in this section shall limit or prohibit a manufacturer or distributor from authorizing or assisting a fleet customer that has a designation as such by the manufacturer or distributor to perform warranty service on vehicles owned or operated by such fleet customer. It is not a violation of this paragraph for a manufacturer or distributor, or an affiliate of a manufacturer or distributor, to directly provide an update to or repair of motor vehicle software if such update or repair is provided over-the-air at no cost or when creating a new line of motor vehicles and using franchised dealers to sell and service those vehicles. A manufacturer or distributor may operate a dealership for a reasonable period not to exceed one (1) year without violating this paragraph if such dealership is for sale to any qualified independent person at a fair and reasonable price, or in a relationship in which an independent person has made a significant investment subject to loss in the dealership and can reasonably expect to acquire full ownership of that dealership on reasonable terms and conditions. Upon a showing of good cause by the manufacturer or distributor to the department, the period of temporary ownership may be extended up to one (1) additional year, resulting in a maximum temporary ownership period of two (2) years.
(h) Unfairly discriminate among its dealers with respect to warranty reimbursement.
(i) Unreasonably withhold consent to the sale, transfer, or exchange of the franchise to a qualified buyer capable of being licensed as a dealer in this state or to condition the sale, transfer, or exchange of a franchise agreement upon site control or an agreement to renovate or make improvements to a facility, unless required by the technology of a motor vehicle being sold at the facility. Provided however, that a voluntary acceptance of such conditions by the dealer in writing including but not limited to a written agreement for which the dealer has accepted separate and valuable consideration, shall not constitute a violation.
(j) Fail to respond in writing to a request for consent as specified in paragraph (i) of this subsection within sixty (60) days of receipt of a written request on the forms, if any, generally utilized by the manufacturer or distributor for those purposes and containing the required information. Failure to respond shall be deemed to be consent to the request.
(k) Prevent or attempt to prevent, by contract or otherwise, any dealer from changing the executive management control of the dealership unless the manufacturer or distributor, having the burden of proof, can show that the change of executive management will result in executive management or control by a person or persons who are not of good moral character or who do not meet reasonable, preexisting and, with consideration given to the volume of sales and service of the dealership, uniformly applied minimum business experience standards. Where the manufacturer or distributor rejects a proposed change in executive management control, the manufacturer or distributor shall give written notice of his reasons to the dealer within sixty (60) days of notice to the manufacturer or distributor by the dealer of the proposed change; otherwise, the change in the executive management of the dealership shall be presumptively considered approved.
(l) Terminate, cancel or fail to renew any franchise solely because of the death or incapacity of an owner who is not listed in the franchise as one on whose expertise and abilities the manufacturer or distributor relied in the granting of the franchise.
(m) Prevent or attempt to prevent the dealer, by written instrument or otherwise, from either receiving the fair market value of the dealership in a sale transaction or from transferring the dealership to a spouse or legal heir, as specified in this chapter.
(n) Engage in any predatory practice or discrimination against any dealer.
(o) Resort to or to use any false or misleading advertisement in the conducting of his business as a manufacturer or distributor in this state.
(p) Make any false or misleading statement, either directly or through any agent or employee, in order to induce any dealer to enter into any agreement or franchise or to take any action that is prejudicial to that dealer or his business.
(q) Require or coerce dealers to participate in local or national advertising campaigns or contests or to require or coerce dealers to purchase promotional or display materials.
(r) Charge back, deny motor vehicle allocation, withhold payments, or take other actions against a dealer, or to condition a franchise agreement, or renewal of a franchise agreement, or to condition sales, service, parts, or finance incentives upon site control or an agreement to renovate or make improvements to a facility unless required by the technology of a motor vehicle being sold at the facility. Provided however, that a voluntary acceptance of such conditions by the dealer in writing including but not limited to a written agreement for which the dealer has accepted separate and valuable consideration, shall not constitute a violation.
(s) Charge back, deny motor vehicle allocation, withhold payments, or take other actions against a motor vehicle dealer if a motor vehicle sold by the motor vehicle dealer is exported from Idaho or the dealer’s assigned area of responsibility unless the manufacturer, distributor, or manufacturer representative proves that the motor vehicle dealer knew or reasonably should have known a motor vehicle was intended to be exported, which shall operate as a rebuttable presumption that the motor vehicle dealer did not have such knowledge. This paragraph does not apply if exporting of motor vehicles outside of the state of Idaho is provided for by the manufacturer or distributor.
(t) Withhold or threaten to withhold consent or approval of the sale, transfer, exchange, or issuance of a dealer sales and service agreement to an otherwise qualified buyer capable of being licensed as a dealer in this state or to condition approval of such buyer upon the selling dealer executing a release of all claims or similar instrument releasing or waiving any and all claims the selling dealer has or may have arising from the franchise relationship with the manufacturer unless separate material consideration is paid contemporaneously by the manufacturer to the dealer for such release. Nothing in this section shall preclude the application of a manufacturer’s reasonable and uniform standards and policies.
(4) It is unlawful for any manufacturer or distributor or any officer, agent or representative to coerce, or attempt to coerce, any dealer in this state to offer to sell or sell any extended service contract or extended maintenance plan that is offered, sold, backed by or sponsored by the manufacturer or distributor or to sell, assign or transfer any retail installment sales contract, obtained by the dealer in connection with the sale by him in this state of new vehicles, manufactured or sold by the manufacturer or distributor, to a specified finance company or class of such companies, or to any other specified person, by any of the acts or means set forth, namely by:
(a) Any statement, suggestion, promise or threat that the manufacturer or distributor will, in any manner, benefit or injure the dealer, whether the statement, suggestion, threat or promise is express or implied or made directly or indirectly;
(b) Any act that will benefit or injure the dealer;
(c) Any contract, or any express or implied offer of contract, made directly or indirectly to a dealer for handling new vehicles, on the condition that the dealer shall offer to sell or sell any extended service contract or extended maintenance plan that is offered, sold, backed by, or sponsored by the manufacturer or distributor or sell, assign or transfer his retail installment sales contract in this state to a specified finance company or class of such companies, or to any other specified person; or
(d) Any express or implied statement or representation made directly or indirectly that the dealer is under any obligation whatsoever to offer to sell or sell any extended service contract or extended maintenance plan that is offered, sold, backed by, or sponsored by the manufacturer or distributor or to sell, assign or transfer any of his retail sales contracts, in this state, on new vehicles manufactured or sold by that manufacturer or distributor to a finance company or class of companies, or other specified person, because of any relationship or affiliation between the manufacturer or distributor and a finance company or companies, or a specified person or persons.
(e) Nothing contained in this subsection shall prohibit a manufacturer or distributor from offering or providing incentive benefits or bonus programs to a retail motor vehicle dealer or prospective retail motor vehicle dealer in this state who makes the voluntary decision to offer to sell or sell any extended service contract or extended maintenance plan offered, sold, backed by or sponsored by the manufacturer or distributor to sell, assign or transfer any retail installment sale or lease by him in this state of motor vehicles manufactured or sold by the manufacturer or distributor to a specified finance company or leasing company controlled by or affiliated with the manufacturer or distributor.
Any statement, threats, promises, acts, contracts or offers of contracts, when the effect may be to lessen or eliminate competition or tend to create a monopoly, are declared unfair trade practices and unfair methods of competition, against the policy of this state, and are unlawful.
(5) It is unlawful for any manufacturer or distributor or agent or employee of a manufacturer or distributor to use a written instrument, agreement, or waiver to attempt to nullify any of the provisions of this section, and such agreement, written instrument or waiver shall be null and void.
(6) It shall be unlawful, directly or indirectly, to impose unreasonable restrictions on the dealer relative to the sale, transfer, right to renew, termination discipline, noncompetition covenants, site control (whether by sublease, collateral pledge of lease, or otherwise), right of first refusal to purchase, option to purchase, compliance with subjective standards and assertion of legal or equitable rights.
(7) The provisions of this chapter shall apply to all written franchise agreements between a manufacturer or distributor and a dealer, including the franchise offering, the franchise agreement, sales of goods, services or advertising, leases or mortgages of real or personal property, promises to pay, security interests, pledges, insurance contract, advertising contract, construction or installation contract, servicing contracts and all other agreements where the manufacturer or distributor has any direct or indirect interest.
(8)(a) It shall be unlawful for any manufacturer or distributor, whether by agreement, program, incentive provision, or provision for loss of incentive payments or other benefits, to establish or implement a franchise agreement for the sales and leasing of new motor vehicles under which the manufacturer or distributor reserves the right to:
(i) Maintain a website or other electronic or digital means of communication for the manufacturer or distributor to negotiate binding terms of sale or leasing of new motor vehicles directly with the retail buyer or lessee without the involvement of a dealer on prices or other substantive terms of sale or leasing of new vehicles;
(ii) Retain ownership of new motor vehicles until they are sold or leased to the retail buyer or lessee;
(iii) Except for the sale or lease of a vehicle to a bona fide employee or relative of such manufacturer or distributor or in connection with a replacement or buyback, or to a bona fide employee or relative of a dealer under an employee pricing or similar program, consign new motor vehicles to dealers for dealer inventory or for sale or lease to a retail buyer or lessee;
(iv) Negotiate binding terms of sale directly with retail buyers or lessees of new motor vehicles without the involvement of a dealer, provided that displaying on a website or other electronic or digital means of communication conditional prices, available financing sources, or conditional trade-in values that are not binding on a dealer shall not be considered negotiating;
(v) Enforce or seek to enforce a right in any franchise agreement for the manufacturer or distributor to unilaterally amend or modify the franchise agreement; or
(vi) Amend or modify or attempt to amend or modify any dealer sales and service agreement, including but not limited to the dealer’s relevant market area if the amendment or modification substantially and adversely affects the dealer’s rights, obligations, investment or return on investment, without giving sixty (60) days advance written notice of the proposed amendment or modification to the dealer.
(b) Nothing in this subsection shall prevent a manufacturer or distributor from:
(i) Participating in fleet sales or leasing with a fleet customer that has a designation as such by the manufacturer or distributor as long as such sales or leases are conducted with the involvement of a dealer of the same line make;
(ii) Authorizing or assisting a fleet customer that has a designation as such by the manufacturer or distributor to perform warranty service on vehicles owned or operated by such fleet customers;
(iii) Offering, providing, and applying the terms of an employee pricing or similar program with participating dealers;
(iv) Negotiating binding terms of sale relating to the sale or lease of a vehicle to a bona fide employee or relative of such manufacturer or distributor;
(v) Negotiating binding terms of sale relating to the sale or lease of a vehicle to a bona fide employee or relative of a franchised dealer under an employee pricing program or similar program;
(vi) Negotiating binding terms of sale relating to the sale or lease of a vehicle in connection with a vehicle replacement or buyback;
(vii) Purchasing from a consumer a vehicle in connection with a vehicle replacement or buyback;
(viii) Maintaining a website or other electronic or digital means of communication if the final selling or leasing price of the new vehicle is determined by eligible dealers; or
(ix) Setting or advertising a manufacturer’s suggested retail price or lease example pricing based on a manufacturer’s suggested retail price, special financing, or lease offers.
(9)(a) Within the sixty (60) day notice period provided for in subsection (8)(a)(vi) of this section, the dealer may pursue remedies under section 49-1617, Idaho Code, and file with the department and serve upon the respondent a petition to determine whether good cause exists for permitting the proposed modification. Multiple complaints pertaining to the same proposed modification may be consolidated for hearing. The proposed modification may not take effect pending the determination of any protest filed by a dealer. In making a determination of whether there is good cause for permitting a proposed modification of a dealer sales and service agreement, including but not limited to a dealer’s relevant market area, the burden of proof shall be on the manufacturer or distributor, except that the burden of proof with regard to the factor set forth in subparagraph (iii) of this paragraph shall be on the dealer. The department shall consider any relevant factor, including:
(i) The reasons for the proposed modification;
(ii) Whether the proposed modification is applied to or affects all motor vehicle dealers in a nondiscriminatory manner;
(iii) The degree to which the proposed modification will have a substantial and adverse effect on the motor vehicle dealer’s rights, investment, or return on investment; and
(iv) Whether the proposed modification is in the public interest.
(b) With respect to a proposed modification of a dealer’s relevant market area the department shall also consider:
(i) The traffic patterns between consumers and the same line-make franchised dealers of the affected manufacturer or distributor who are located within the market;
(ii) The pattern of new vehicle sales and registrations of the affected manufacturer or distributor within various portions of the relevant market area and within the market as a whole;
(iii) The growth or decline in population, density of population, and new car registrations in the market;
(iv) The presence or absence of natural geographical obstacles or boundaries;
(v) The proximity of census tracts or other geographic units used by the affected manufacturer or distributor in determining the same line-make dealers’ respective relevant market area; and
(vi) The reasonableness of the change or proposed change to the dealer’s relevant market area, considering the benefits and harm to the petitioning dealer, other same line-make dealers, and the manufacturer or distributor.
(10) It shall be unlawful for any manufacturer or distributor to implement a program or policy that coerces or requires the franchisee to install direct current fast charging stations for public access or use or any similar public-facing infrastructure relating to charging, fueling, or powering a vehicle. For purposes of this section, the term "coerce" means the use of force or threats to compel a dealer to take a specific action. "Coerce" includes threatening to withhold vehicles or parts from a franchisee or charging a franchisee a higher price for vehicles or parts on the basis of the franchisee refusing, declining, or failing to perform a specific behavior. Provided, however, that nothing contained in this subsection shall be deemed to prohibit or prevent a manufacturer or distributor from requiring a franchisee to purchase special tools or equipment, install reasonable charging infrastructure, stock reasonable quantities of certain parts, or participate in training, reasonable sales and service programs, or policies that are reasonably necessary for such franchisee to sell or service any model or series of vehicles.

Legislative History

[49-1613, added 1988, ch. 265, sec. 386, p. 769; am. 1991, ch. 272, sec. 14, p. 703; am. 1994, ch. 317, sec. 1, p. 1015; am. 2005, ch. 144, sec. 1, p. 451; am. 2011, ch. 327, sec. 3, p. 954; am. 2023, ch. 68, sec. 2, p. 231; am. 2024, ch. 213, sec. 2, p. 751; am. 2025, ch. 211, sec. 19, p. 985.]