(625 ILCS 5/5-101.1)
Sec. 5-101.1. Motor vehicle financing affiliates; licensing.
(a) In this State no business shall engage in the business of a motor vehicle financing affiliate without a license to do so in writing from the Secretary of State.
(b) An application for a motor vehicle financing affiliate's license must be filed with the Secretary of State, duly verified by oath, on a form prescribed by the Secretary of State and shall contain all of the following:
(1) The name and type of business organization of the
applicant and the applicant's established place of business and any additional places of business in this State.
(2) The name and address of the licensed new or used
vehicle dealer to which the applicant will be selling, transferring, or assigning new or used motor vehicles pursuant to a written contract. If more than one dealer is on the application, the applicant shall state in writing the basis of common ownership among the dealers.
(3) A list of the business organization's officers,
directors, members, and shareholders having a 10% or greater ownership interest in the business, providing the residential address for each person listed.
(4) If selling, transferring, or assigning new motor
vehicles, the make or makes of new vehicles that it will sell, assign, or otherwise transfer to the contracting new motor vehicle dealer listed on the application pursuant to paragraph (2).
(5) The name of each manufacturer or franchised
distributor, if any, of new vehicles with whom the applicant has contracted for the sale of new vehicles and a signed statement from each manufacturer or franchised distributor acknowledging the contract.
(6) A statement that the applicant has been approved
for registration under the Retailers' Occupation Tax Act by the Department of Revenue. This requirement does not apply to a motor vehicle financing affiliate that is already licensed with the Secretary of State and is applying for a renewal of its license.
(7) A statement that the applicant has complied with
the appropriate liability insurance requirement and a Certificate of Insurance that shall not expire before December 31 of the year for which the license was issued or renewed with a minimum liability coverage of $100,000 for the bodily injury or death of any person, $300,000 for the bodily injury or death of 2 or more persons in any one accident, and $50,000 for damage to property. The expiration of the insurance policy shall not terminate the liability under the policy arising during the period for which the policy was filed. Trailer and mobile home dealers are exempt from the requirements of this paragraph. A motor vehicle financing affiliate is exempt from the requirements of this paragraph if it is covered by the insurance policy of the new or used dealer listed on the application pursuant to paragraph (2).
(8) A license fee of $1,000 for the applicant's
established place of business and $250 for each additional place of business, if any, to which the application pertains. However, if the application is made after June 15 of any year, the license fee shall be $500 for the applicant's established place of business and $125 for each additional place of business, if any, to which the application pertains. These license fees shall be returnable only in the event that the application is denied by the Secretary of State.
(9) A statement incorporating the requirements of
paragraphs 8 and 9 of subsection (b) of Section 5-101.
(10) Any other information concerning the business of
the applicant as the Secretary of State may prescribe.
(11) A statement that the applicant understands
Chapter 1 through Chapter 5 of this Code.
(c) Any change which renders no longer accurate any information contained in any application for a motor vehicle financing affiliate's license shall be amended within 30 days after the occurrence of the change on a form prescribed by the Secretary of State, accompanied by an amendatory fee of $2.
(d) If a new vehicle dealer is not listed on the application, pursuant to paragraph (2) of subsection (b), the motor vehicle financing affiliate shall not receive, possess, or transfer any new vehicle. If a new motor vehicle dealer is listed on the application, pursuant to paragraph (2) of subsection (b), the new motor vehicle dealer can only receive those new cars it is permitted to receive under its franchise agreement. If both a new and used motor vehicle dealer are listed on the application, pursuant to paragraph (2) of subsection (b), only the new motor vehicle dealer may receive new motor vehicles. If a used motor vehicle is listed on the application, pursuant to paragraph (2) of subsection (b), the used motor vehicle dealer shall not receive any new motor vehicles.
(e) The applicant and dealer provided pursuant to paragraph (2) of subsection (b) must be business organizations registered to conduct business in Illinois. Three-fourths of the dealer's board of directors must be members of the motor vehicle financing affiliate's board of directors, if applicable.
(f) Unless otherwise provided in this Chapter 5, no business organization registered to do business in Illinois shall be licensed as a motor vehicle financing affiliate unless:
(1) The motor vehicle financing affiliate shall only
sell, transfer, or assign motor vehicles to the licensed new or used dealer listed on the application pursuant to paragraph (2) of subsection (b).
(2) The motor vehicle financing affiliate sells,
transfers, or assigns to the new motor vehicle dealer listed on the application, if any, only those new motor vehicles the motor vehicle financing affiliate has received under the contract set forth in paragraph (5) of subsection (b).
(3) Any new vehicle dealer listed pursuant to
paragraph (2) of subsection (b) has a franchise agreement that permits the dealer to receive motor vehicles from the motor vehicle franchise affiliate.
(4) The new or used motor vehicle dealer listed on
the application pursuant to paragraph (2) of subsection (b) has one established place of business or supplemental places of business as referenced in subsection (g).
(g) The Secretary of State shall, within a reasonable time after receipt, examine an application submitted pursuant to this Section and, unless it is determined that the application does not conform with the requirements of this Section or that grounds exist for a denial of the application under Section 5-501, grant the applicant a motor vehicle financing affiliate license in writing for the applicant's established place of business and a supplemental license in writing for each additional place of business in a form prescribed by the Secretary, which shall include all of the following:
(1) The name of the business licensed;
(2) The name and address of its officers, directors,
or members, as applicable;
(3) In the case of an original license, the
established place of business of the licensee; and
(4) If applicable, the make or makes of new vehicles
which the licensee is licensed to sell to the new motor vehicle dealer listed on the application pursuant to paragraph (2) of subsection (b).
(h) The appropriate instrument evidencing the license or a certified copy, provided by the Secretary of State, shall be kept posted conspicuously in the established place of business of the licensee.
(i) Except as provided in subsection (h), all motor vehicle financing affiliate's licenses granted under this Section shall expired by operation of law on December 31 of the calendar year for which they are granted, unless revoked or canceled at an earlier date pursuant to Section 5-501.
(j) A motor vehicle financing affiliate's license may be renewed upon application and payment of the required fee. However, when an application for renewal of a motor vehicle financing affiliate's license is made during the month of December, the effective license shall remain in force until the application is granted or denied by the Secretary of State.
(k) The contract a motor vehicle financing affiliate has with a manufacturer or franchised distributor, as provided in paragraph (5) of subsection (b), shall only permit the applicant to sell, transfer, or assign new motor vehicles to the new motor vehicle dealer listed on the application pursuant to paragraph (2) of subsection (b). The contract shall specifically prohibit the motor vehicle financing affiliate from selling motor vehicles at retail. This contract shall not be considered the granting of a franchise as defined in Section 2 of the Motor Vehicle Franchise Act.
(l) When purchasing of a motor vehicle by a new or used motor vehicle dealer, all persons licensed as a motor vehicle financing affiliate are required to furnish all of the following:
(1) For a new vehicle, a manufacturer's statement of
origin properly assigned to the purchasing dealer. For a used vehicle, a certificate of title properly assigned to the purchasing dealer.
(2) A statement verified under oath that all
identifying numbers on the vehicle agree with those on the certificate of title or manufacturer's statement of origin.
(3) A bill of sale properly executed on behalf of the
purchasing dealer.
(4) A copy of the Uniform Invoice-transaction report
pursuant to Section 5-402.
(5) In the case of a rebuilt vehicle, a copy of the
Disclosure of Rebuilt Vehicle Status pursuant to Section 5-104.3.
(6) In the case of a vehicle for which a warranty has
been reinstated, a copy of the warranty.
(m) The motor vehicle financing affiliate shall use the established and supplemental place or places of business the new or used vehicle dealer listed on the application pursuant to paragraph (2) of subsection (b) as its established and supplemental place or places of business.
(n) The motor vehicle financing affiliate shall keep all books and records required by this Code with the books and records of the new or used vehicle dealer listed on the application pursuant to paragraph (2) of subsection (b). The motor vehicle financing affiliate may use the books and records of the new or used motor vehicle dealer listed on the application pursuant to paragraph (2) of subsection (b).
(o) Under no circumstances shall a motor vehicle financing affiliate sell, transfer, or assign a new vehicle to any place of business of a new motor vehicle dealer, unless that place of business is licensed under this Chapter to sell, assign, or otherwise transfer the make of the new motor vehicle transferred.
(p) All moneys received by the Secretary of State as license fees under this Section shall be deposited into the Motor Vehicle Review Board Fund and shall be used to administer the Motor Vehicle Review Board under the Motor Vehicle Franchise Act.
(q) Except as otherwise provided in this Section, a motor vehicle financing affiliate shall comply with all provisions of this Code.
(Source: P.A. 91-415, eff. 1-1-00.)
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Last modified: February 18, 2015