Parameters for At-Home Vehicle Delivery By Dealers Codified in North Carolina

In September 2021, North Carolina became the first state to amend its dealer statute to expressly permit at-home vehicle delivery in connection with the sale of new and used cars. The amendment clarifies that dealers can deliver vehicles purchased or leased by a customer to the customer’s home or place of business without running afoul of the statute’s general prohibition against the “display” of a vehicle for sale at any location other than the dealership, which was previously codified at N.C. Gen. Stat. § 20-292. This statutory amendment, though perhaps not earth-shattering, reflects an effort to give dealers comfort that they can respond to consumer demand for an on-line vehicle purchase experience without running afoul of state dealer laws, and confirms that traditional OEMs and dealers can respond to changing auto retailing competition from companies like Vroom.com, a tech-based online used car retailer that portrays the traditional consumer experience as “Dealership Pain.”

The general prohibition against displaying vehicles other than at the dealer’s authorized location continues to exist as a new subsection (a) of N.C. Gen. Stat. § 20-292. A new subsection (b) of that provision, however, says that nothing contained in Section 20-292 or any other provision of the North Carolina dealer statute shall be deemed to restrict a dealer from delivering a vehicle purchased by a customer to that customer’s home or place of business. N.C. Gen. Stat. § 20-292(b) clarifies that dealers, in addition to delivering vehicles to customer homes or places of business, can present to customers for execution at those locations “forms and other documents relating to vehicle purchase, lease, titling, registration, financing, insurance, and other products and services,” so long as those “forms and other documents” have been fully completed by the dealer and agreed-to by the parties prior to presentation and no additional negotiations or modifications to the contents of the documents are made.

The amendment to North Carolina’s dealer statute is similar to guidance issued by California’s Department of Motor Vehicles (DMV) in mid-2020 in response to the COVID-19 pandemic. That guidance—which by its express terms was only intended to clarify “the requirements for online vehicle sales and off-site delivery of a vehicle to a purchaser during this outbreak period”—requires that “[a]ll terms of the transaction must be agreed upon prior to the delivery of the vehicle at an off-site location”; that “[n]egotiations may not be conducted at the purchaser’s delivery location”; and that “[a]ll contracts must be signed by the dealership before delivery of the vehicle at the off-site location.” The California DMV has not rescinded that guidance in the intervening 18 months, and given the passage of time, it would be difficult for the California DMV to issue contrary regulations once the COVID-19 pandemic has passed.