What Dealers Should Know About Vehicle Inspection Standards and Required Disclosures Before Selling a Used Vehicle in Wisconsin

Paul R. Norman , Patrick L. Breen | 06.12.23

Before offering a vehicle for sale, Wisconsin dealers must be sure to act in accordance with key provisions of Wisconsin law that govern the sale of used vehicles. First, dealers must ensure that the dealer’s motor vehicle technicians are performing proper vehicle and record inspections under Wisconsin’s reasonable standard of care as codified in Wisconsin DOT rules. Second, after the inspections, dealers must display the Wisconsin Buyers Guide with all required disclosures in the vehicle. Failure to abide by these requirements may lead to civil litigation that could result in significant financial costs to the dealer. A dealer who does not make the required disclosures may be obligated to compensate a buyer for any financial damages the buyer has suffered, including the buyer’s legal fees. Failure to act in accordance with Wisconsin law may even result in suspension or revocation of a dealer’s license. Thus, dealers must take care to avoid these costly penalties.

1. Dealers Must Perform Vehicle Inspections and Record Inspections with Reasonable Care

Dealers must perform a vehicle inspection with reasonable care before offering a used vehicle for sale. To comply with Wisconsin’s reasonable care standard for vehicle inspections, an inspector (usually a technician) must: (1) inspect the interior and exterior of the vehicle; (2) perform an under-vehicle and under-hood inspection of the vehicle; and (3) perform a test drive of the vehicle. Disassembling the vehicle is typically not required to comply with the reasonable care standard for inspections. But if the inspection uncovers an issue that requires further diagnostic steps, some disassembly may be necessary to ensure the vehicle does not have conditions that need to be disclosed and complies with the minimum equipment standards for used vehicles.

Dealers must also perform a record inspection on a used vehicle. The reasonable care standard for record inspection requires dealers to compile: (1) information about the vehicle from the manufacturer, including auction notices; (2) available documentation and disclosures from previous owners; and (3) the dealer’s own vehicle inspection and repair records. A dealer does not need to contact previous owners to obtain records, unless it is apparent there is conflicting or otherwise questionable information about the vehicle’s history. While the rules do not require that a dealer purchase and review a commercially available vehicle history, such as a CarFax report, on a used vehicle, it is not uncommon for a dealer to be sued for having failed to disclose something in the vehicle’s history that is reflected on such a report. Checking and disclosing past history information available on vehicle history reports may save a lot of grief and expense later on.

2. Dealers Must Display the Wisconsin Buyers Guide with the Completed Required Disclosures Before Offering a Used Vehicle for Sale

After completing the inspections, dealers must disclose the material history of the vehicle and the findings from the inspections on the Wisconsin Buyers Guide. Declaring that a used vehicle is being sold ​“as-is” will not shield a dealer from liability in Wisconsin if the Buyers Guide does not contain required disclosures of conditions that can be ascertained with reasonable care.[1] Dealers must overtly display all necessary disclosures on the Wisconsin Buyers Guide so that it is readable from outside the vehicle.

The disclosures on the Wisconsin Buyers Guide must include material information from the title, including any title brands. Dealers must also disclose material information about the vehicle’s general condition, such as any significant mechanical, electrical, or electronic defects. Importantly, any apparent damage or evidence of repair to the vehicle must be disclosed as well. 

3. Noncompliance Could Result in Litigation and Statutory Penalties

Before dealers may offer a used vehicle for sale, Wisconsin law requires dealers to: (1) perform a vehicle and record inspection with reasonable care; and (2) disclose the findings from those inspections, along with other required disclosures, on the Wisconsin Buyers Guide. Dealers must ensure their sales practices comply with these requirements to avoid costly financial penalties that could result from civil litigation. A dealer who fails to make these required disclosures may be obligated to compensate a buyer for any financial damages the buyer has suffered, including the buyer’s legal fees. Repeated or serious violations may even result in the suspension or revocation of a dealer’s sales license. It is important that dealers ensure their employees understand and abide by the Wisconsin laws governing pre-sale disclosures for used vehicles.