I hope that everyone is continuing to stay safe out there, and I wish everyone continued health and wellbeing. Over the many weeks of this COVID-19 pandemic, the Hotline has consistently received calls about driver’s licenses. Specifically, the questions tend to concern the delivery of vehicles and extensions to license expiration. Admittedly, not all news involving license extensions is new. However, the DMV recently updated an extension for those who are 70 years of age or older. As such, this seems like an opportune time to discuss these noncommercial driver’s license extensions issued by the DMV.
Most of these calls involving potentially expired licenses proceed with the same initial question: “Can I sell a vehicle to a customer who has an expired license?” Firstly, the question is a bit of a misconception because no California law directly prohibits the sale of a vehicle to an unlicensed driver or an individual with an expired license. A vehicle can legally be sold to anyone so long as that person is not an OFAC match and so long as the dealer comports with its Red Flags Policy. You can read more information about this in our article, “What’s Hot on the Hotline? Unlicensed Customers–The Stevie Wonder Principle Revisited.”
In actuality, perhaps the better question is: “Can I deliver a vehicle to a customer who has an expired driver’s license?” The general rule is that a dealer should never allow an unlicensed driver to drive a vehicle off the lot, as this can be construed as negligent entrustment. This includes a driver with an expired license. However, this global pandemic has brought some notable license extensions issued by the DMV:
- License holders 70 years old or above with a license that expired between March and December 2020 have received an automatic one-year extension from the original expiration date. The DMV recently updated this extension.
- License holders 69 years old or younger with a license that expired between March and July 2020 have an extension until July 31, 2020. Although this extension lasts until the end of this month, be on the lookout for potential updates due to the recent surge in COVID-19 cases in California and the corresponding new shutdown orders.
- These extensions are free and automatic, and drivers will not receive a new license or paper extension in the mail. Drivers can request online a free temporary paper extension through the DMV’s Virtual Field Office. However, the DMV indicates that a paper extension is not required to drive, although it can be used as proof of the extension.
So, what does this mean for your dealership? It means that you may currently be able to deliver a vehicle to someone with a license that appears expired on its face. I say “may” because there is no extension provided for a suspended license. Accordingly, it would be a good idea for dealers to also run a KSR on a customer’s license in this situation. Also, be sure to check with your lenders, as they tend to impose different obligations on dealers regarding identification and license requirements for customers. Before rolling a deal, you will want to check if it is acceptable to the lender to sell and deliver a vehicle to a customer with a license that appears expired on its face despite being subject to one of these extensions.
We know that these times are hard, and everyone everywhere has been affected by this global pandemic. We are all in this together, and this too shall pass. Hotline clients are invited to contact us at (800) 785-2880 (then press “4” for Hotline) or firstname.lastname@example.org. We are here to answer any questions you may have.