The Transportation Security Admin., car-rental agencies and bars require valid IDs. So should dealers.
You can’t clear airport security by showing an expired driver’s license. You can’t rent a car with an expired driver’s license.
So you can perhaps understand my disbelief when a dealership sales manager insists that you don’t need a driver’s license to buy a car.
Let me share a few war stories from dealers who chose to look the other way when the customer did not have a valid U.S. government-issued ID or the dealership simply forgot to verify identity.
Michigan has a repeat-offender law that disqualifies anyone convicted of multiple DUIs from registering a vehicle. A dealer across the state line sold a car to a Michigan resident, obtained a copy of an expired driver’s license and did not check the Michigan Secretary of State website to confirm that the customer was not a repeat offender, which she was.
The dealer was not able to register the financed vehicle, thereby violating the dealer-lender agreement and had to pay off the loan.
Good luck getting into a bar with an expired driver’s license.
A dealer in the Southwest accepted a Mexican Matricula card for a Hispanic customer in lieu of a valid U.S. government-issued ID on a financed deal. The lender ultimately repossessed the vehicle and the recovery department discovered that the customer had purchased his social security number in 1995. Now the dealer is being asked to repurchase the loan.
My guess is that a police officer would write you a ticket if you were pulled over and presented an expired driver’s license.
There are many reasons why someone does not have a current driver’s license. Most of them are bad:
- Honest oversight.
- Couldn’t pass the written or driving test on renewal.
- Has a current driver’s license from another state.
- Identity theft.
- Not eligible for insurance.
- Not eligible due to crime-related reasons.
Just because some states do not require a current driver’s license in order to register and title a vehicle, there are other requirements on car dealers that suggest you should have a legible, current form of government-issued ID on every deal.
The most common form of identification is a driver’s license, but a state ID card and passport are acceptable.
The federal Patriot Act requires that you verify the identity of anyone you are doing business with.
The Office of Foreign Assets Control requires you to check its list of suspected terrorists, drug dealers and money launderers to ensure your customer is not on the list.
The federal Red-Flags Rule requires you to confirm you are not selling a vehicle to an identity thief. Your written Red-Flags policy should specify that.
On financed deals, even though the lender may not require a form of ID to fund the deal, it usually reserves the right under your dealer-lender agreement to check your files at any time to confirm that you verified identity.
The Transportation Security Admin., car-rental agencies and bars require valid IDs. So should all dealers.
Gil Van Over is the President of gvo3 & Associates, a nationally recognized compliance consulting firm that specializes in F&I, Sales, Safeguards and Red Flags compliance. Visit gvo3’s website at www.gvo3.com.