Use of Dealer Full Use Plates (DLR) on Service Loaners
*CLARIFYING NOTE: If you read this in Open Road on Jan. 21, the article was mis-titled. DLR Plates on loaners ARE appropriate and the best method of plating - as you will read below.
Over the past several weeks I have gotten phone calls regarding the appropriate plates to use on a fleet of service loaners and also how to turn that service loaner fleet into a rental fleet if a dealer was preparing to take money for use of the vehicle.
By definition, a service loaner means that there is no compensation being provided to the dealer for use of the vehicle – by the consumer OR by the manufacturer through a warranty reimbursement claim. If you are being compensated for use – even by a third party (OEM) – what you’re providing is not a loaner, it’s a rental. The difference is significant when it comes to plating a vehicle.
Some dealers throughout the state (many independents, but some franchised too) have been using dealer demonstration plates on their loaners. This is not appropriate and will make the plate subject to confiscation by a local police department. Rule 48, Section 2.8 holds a Demo plate may be displayed in a vehicle operated by a potential buyer during normal business hours when a dealership employee is with the buyer; or outside of normal business hours only if the dealer provides a letter authorizing the prospective buyer to use the vehicle, including all of the prospective buyer’s pertinent information (plate number, dates, vehicle make and model, VIN, etc.).
We have been notified by both law enforcement and the Department of Motor Vehicles that this will become an enforcement priority in the coming months.
For a service loaner, DMV recommends using Full Use Dealer (DLR) plates for the vehicle being loaned without compensation. Subsection C of Section 2.8 requires only that the vehicle bearing the plate must be offered for sale, and that the plate must be displayed on the vehicle along with documents demonstrating dealer ownership.
Finally, for those dealers being compensated by either the manufacturer or customer for use of the vehicle, these vehicles must be registered to the dealership and “hard plated”. This will, of course, cause the car to come off its Manufacturer’s Statement of Origin (MSO) and will prevent it from being sold as a new vehicle in the future, even if it is used as a service rental for less than 1500 miles.
The full text of Rule 48 can be found at the regulatory website, www.coloradocarlaw.com. Any questions can be directed to firstname.lastname@example.org.