Louisiana Car Dealership Laws: Licensing, Advertising, and Penalties

Louisiana car dealership laws are split between two state agencies and layered with federal rules. The Louisiana Motor Vehicle Commission (LMVC) licenses and polices new car dealers, while the Louisiana Used Motor Vehicle Commission (LUMVC) handles used dealers, dismantlers, salvage dealers, auction dealers, and salespeople.¹ A dealership selling both new and used vehicles has to satisfy both. On top of the state framework, federal rules govern odometer disclosure, used-car Buyers Guides, financing disclosures, and financing-related advertising, and consumers have a private right of action under the Louisiana Unfair Trade Practices Act for deceptive dealership conduct.

Who Regulates Which Dealer

The LMVC oversees new motor vehicle dealers and the franchise relationship between dealers and manufacturers. The LUMVC handles the used side of the industry, including used dealers, automotive dismantlers, parts recyclers, salvage dealers, auction dealers, and licensed salespeople.¹ The line matters because bond amounts, license fees, recordkeeping duties, and enforcement staff all differ between the two commissions.

Licensing, Bonds, and Fees

New Car Dealers

An LMVC applicant needs a permanent business location that complies with local zoning and a display area for vehicles. The surety bond is $20,000, which secures compliance with state law and consumer protection. Every applicant is background-checked, and felony convictions tied to motor vehicle sales or fraud disqualify the applicant. Applicants must also attend the LMVC’s pre-licensing seminar. The new car dealer license fee is $400, and the license is renewed annually with a compliance review.²

Used Car Dealers

Used dealers face a much higher bond, $50,000, but lower license fees: a maximum of $200 for the dealer license, $100 for each additional location beyond the principal office, and up to $25 per salesperson license.³ Used dealers must keep a register of every purchase and sale for at least three years, recording make, model, year, body style, VIN, odometer reading, and buyer and seller names and addresses. Commission staff and law enforcement can inspect those records during business hours.⁴

Sales Practices Dealers Must Follow

Louisiana law requires dealers to disclose material facts about a vehicle’s condition, history, and known defects, to provide a clear purchase agreement covering the total sale price, financing terms, and any additional fees, and to state and honor warranties in writing.

Odometer Disclosure

Federal law requires a written odometer disclosure at the time of sale for most vehicles. Vehicles over 16,000 pounds gross vehicle weight rating and non-self-propelled vehicles are exempt. Model year 2010 and earlier vehicles are exempt once they are at least 10 years old, and model year 2011 and later vehicles become exempt after 20 years.⁵ For non-exempt vehicles, a completed disclosure must accompany every title application.

FTC Buyers Guide

Any dealer selling a used vehicle must display the federal Buyers Guide on the vehicle before offering it for sale. The guide states whether the vehicle comes with a warranty or is sold “as is,” and if a warranty applies it must describe covered systems, duration, and the percentage of repair costs the dealer will pay. The Buyers Guide becomes part of the sales contract and overrides conflicting contract language, and dealers cannot make oral or written statements that contradict it.⁶

Deposits, Trade-Ins, and Financing Disclosures

Dealers must communicate whether a deposit is refundable and on what conditions, and must return it promptly when a deal falls through unless the buyer signed a clear forfeiture agreement. When the dealership arranges financing, the federal Truth in Lending Act requires written disclosure of the interest rate, finance charges over the life of the loan, the monthly payment, late fees, and any prepayment penalties before the buyer signs.⁷

Advertising Rules

LMVC advertising rules apply to print, broadcast, and digital promotions. The core price rule: any featured price for a new or used vehicle must be the full cash price available to any member of the buying public. The only charges a dealer may exclude from that advertised price are state and local taxes, license fees, title fees, notarial fees, convenience fees, and documentary fees.⁸ Words like “free,” “guaranteed,” or “certified” have to be backed by evidence and defined in the ad, with any limitations disclosed.

Federal rules add a trigger for financing ads. Once an ad mentions any of the following, the dealer must disclose the full financing terms:

The down payment amount or percentage
The number of payments or repayment period
The amount of any payment
The amount of any finance charge

When any of those appears, the ad must also disclose the full down payment, the complete repayment terms including any balloon payment, and the annual percentage rate. If the rate can increase after closing, the ad must say so.⁹ A “$199/month” headline without those disclosures is a federal violation.

Dealer Fees and Sales Tax

Louisiana caps what a dealer can charge for paperwork. The statute allows a $35 documentation fee for services performed in documenting a motor vehicle credit transaction. Separately, a dealer may charge a combined fee covering credit investigation, compliance work, document preparation, and titling functions, with a base maximum of $425. Beginning January 1, 2026, that $425 cap adjusts annually based on the lesser of the change in the Consumer Price Index for All Urban Consumers or a 3% growth cap.¹⁰

The state sales tax on motor vehicles is 4.45%, and most parishes and municipalities add local taxes ranging from roughly 1.85% to 7%.¹¹ The effective rate depends on where the sale closes.

Temporary Tags and Title Transfer

A Louisiana dealer sale usually ends with a temporary registration plate. That plate expires when permanent plates arrive or 60 days after issuance, whichever comes first. If the title transfer is delayed or defective, the buyer can get one additional 60-day extension through the dealer, subject to Office of Motor Vehicles approval.¹²

Dealers must transmit temporary plate data to the commissioner electronically the same day, including make, model year, VIN, issue date, and dealer information, and retain records of all temporary plates for at least three years.¹² If permanent plates or title have not arrived before the temporary plate expires, contact the dealer to request the extension before the deadline passes.

Lemon Law and Buyer Remedies

Louisiana’s Lemon Law covers new motor vehicles used for personal, family, or household purposes that carry a manufacturer’s express warranty.¹³ If a defect substantially impairs the vehicle’s use, value, or safety and cannot be fixed, the buyer is entitled to a replacement vehicle or a refund. The law presumes the manufacturer has had a reasonable chance to repair when the same defect has been subject to repair four or more times, or when the vehicle has been out of service for a cumulative 45 or more calendar days for repairs.

The Lemon Law does not cover used vehicles. Repair orders and receipts are the evidence a Lemon Law claim rises or falls on, so buyers should hold onto every document from every service visit.

Penalties for Dealer Violations

Administrative Sanctions

Both commissions can fine, suspend, or revoke a dealer’s license. The LMVC fines dealers for rule violations, including deceptive sales practices.² Advertising violations follow a separate schedule that starts at $50 for a first offense and $100 for a second, with higher fines or additional sanctions for third or subsequent offenses.¹⁴ Suspension and revocation are reserved for repeated or serious misconduct. The LUMVC has parallel authority to inspect records, investigate complaints, and pull a used dealer’s license for serious or persistent violations.¹⁵

Consumer Lawsuits Under LUTPA

The Louisiana Unfair Trade Practices Act is the main consumer weapon against deceptive dealership conduct.¹⁶ A buyer who suffers an actual financial loss from a deceptive practice can sue for actual damages, reasonable attorney fees, and court costs. If the court finds the dealer kept using the deceptive practice after being put on notice by the Attorney General, the court must award treble damages.¹⁷

Timing is the trap. LUTPA claims carry a one-year prescriptive period running from the date of the transaction that caused the loss. Miss that window and the claim is gone regardless of how strong the underlying facts are.¹⁷

1
Louisiana Used Motor Vehicle Commission. Louisiana Used Motor Vehicle Commission – Home
2
Louisiana State Legislature. Louisiana Revised Statutes – Motor Vehicle Commission
3
Justia Law. Louisiana Revised Statutes Title 32 RS 32-791 – Application for License
4
Louisiana State Legislature. Louisiana Revised Statutes RS 32-805 – Requirement to Keep Records
5
eCFR. Title 49 Part 580 – Odometer Disclosure Requirements
6
eCFR. Title 16 Part 455 – Used Motor Vehicle Trade Regulation Rule
7
Consumer Financial Protection Bureau. What Is a Truth-in-Lending Disclosure for an Auto Loan
8
Cornell Law School. Louisiana Admin Code Title 46 Section V-719 – Dealer Price Advertising
9
eCFR. Title 12 Section 1026.24 – Advertising
10
Louisiana State Legislature. Louisiana Revised Statutes RS 6-969.18
11
Louisiana Department of Revenue. Motor Vehicle Sales Tax
12
Louisiana State Legislature. Louisiana Revised Statutes RS 47-519
13
Justia Law. Louisiana Revised Statutes Title 51 RS 51-1941 – Definitions
14
Cornell Law School. Louisiana Admin Code Title 46 Section III-1503 – Fines for Advertising Violations
15
Louisiana Used Motor Vehicle Commission. Rules and Regulations – Louisiana Used Motor Vehicle Commission
16
LMVC. Louisiana Consumer Protection Laws
17
Louisiana State Legislature. Louisiana Revised Statutes RS 51-1409 – Private Actions