Expert Interview With Larry Purdy On Car Dealer Mistakes

car dealer mistakes


Larry Purdy, Chief of Investigations at the Oregon DMV Business Regulation Section, knows what it takes to be a successful car dealer. He also knows what it takes to be in violation of the law. Purdy shares his wealth of knowledge in this interview.


Crystal Ignatowski: Describe your background in this industry and what led you to become the Chief of Investigations at DMV Business Regulation Section. 


Larry Purdy: I spent about 20 years in law enforcement before realizing I wasn’t able to provide the level of help to people that I wanted to.  An opportunity to work for the Oregon DMV Business Regulation Section as a Dealer Investigator presented itself, which also allowed me to move closer to my family, so I jumped on it.  After five years as an Investigator, the Chief of Investigations position opened up and I applied.  After a competitive selection process, I was offered the position. 


Crystal Ignatowski: What are the biggest concerns and questions business owners are coming to you with today?


Larry Purdy: The majority of the business owners I deal with are good, honest people that are trying their best to do what’s right.  They want to be in compliance with all the laws, rules, and regulations that govern their businesses.  The most common questions I receive have to do with business owners and their employees asking for advice on how to handle an out-of-the-ordinary situation, or just verifying that they are doing what’s right. I’ve found that the vast majority of the business owners are just as interested in helping their customers as they are in making a profit.


Crystal Ignatowski: Where do you think vehicle dealers make the biggest missteps, from an investigative standpoint? 

  • Not hiring the right business manager/title clerk:  I know from experience as a hiring manager, that some of the best business decisions you can make are the personnel you hire.  If you hire the wrong people, they can ruin your business and your reputation.

  • Not providing proper education/training to the title clerk:  The requirements for processing title work seem to change with every legislative session.  Title clerks need to receive adequate training at the time they’re hired and continue to receive periodic update training throughout their career.

  • Growing the business too rapidly: Many dealers start out small, hoping to just make enough money to feed their family with.  As soon as they open their doors, they get bombarded with offers to help grow their business.  Before long the dealer that started with five cars on the lot that they paid for in cash, now has forty cars on the lot and owes tens of thousands of dollars in flooring loans.  The business expansion costs they incur eat up all of their profits and the business winds up going under.

  • Lying to their Dealer Investigator:  Keep in mind that the vast majority of the time, if a Dealer Investigator asks you a question, they already know the answer. 



Crystal Ignatowski: In an article I read online about you, it states ‘you help ensure that all licensed/unlicensed dealer/dismantler penalties and sanctions move through the required processes in a fair, equitable, and timely manner.’ Can you describe the process that a penalty or sanction goes through? 


Larry Purdy: When a Dealer Investigator conducts a complaint investigation or routine inspection and determines administrative action (civil penalty/sanction) is warranted, they issue a Correction Notice to the dealer/dismantler, write an investigative report requesting administrative action, and submit it to me for review.  After review, if I determine the requested administrative action is not warranted, the business receives nothing further. 


If I determine the requested administrative action is warranted, the report is submitted to the Oregon Dealer Advisory Committee (ODAC) for review/comment.  After ODAC review, a legal notice is mailed to the business and they are allowed 20 days from the date of the notice to request an administrative hearing.  If the business fails to make timely request for a hearing, the notice becomes a final order and the administrative action is imposed. 


If the business makes timely request for a hearing, we will generally invite the business owner to a meeting to attempt to reach an agreement to allow us to settle the matter and avoid an administrative hearing.  If we are unable to reach an agreement, the case is referred to the Oregon Administrative Hearings office for the scheduling of a hearing.  An Administrative Law Judge presides over the hearing and will make a ruling on the case.


In most cases where a hearing is requested, we are able to reach a settlement agreement with the business owner.  In determining a fair settlement, we consider:

  • The severity of the violation or its impact on the public
  • The number of similar or related violations
  • Whether a violation was willful or intentional
  • The prior history of administrative action
  • The number of violations compared to the volume of transactions
  • Any other applicable circumstances


Crystal Ignatowski: What are the most common penalties that you see car dealers face, and how can car dealers avoid these penalties? 

Larry Purdy: The most common violations involve how dealers handle money:

  • Dealers commonly collect DMV fees from customers in order to submit the customer’s title and registration application to DMV.  Unfortunately, many dealers forget that the collected fees belong to DMV, and instead of submitting them right away, they use the fees to pay other bills, figuring they will submit the title work closer to the deadline.  When the deadline approaches, they don’t have the money to submit with the application, so it gets put off and they don’t get it submitted on time.  The easiest solution is to submit the application and fees as soon as practicable after receiving them.

  • Failing to pay off lienholders is another one.  Dealers buy a car without the money on hand to pay it off, hoping that they will sell the car or another one quickly enough to get the money together to make the payoff.  Unfortunately, if it doesn’t work out and the lienholder doesn’t get paid off in time, it’s the owner of record whose credit gets hit.  The easiest solution is not to buy a car if you don’t have the money on hand to pay off the lienholder.


Crystal Ignatowski: What are the smartest decisions business owners can make to protect themselves and their business? 


Larry Purdy: Making wise hiring decisions is paramount to a business’ success.  Keeping staff aware of changes in the law and being sure to take advantage of on-going training opportunities is also important.  Staying in regular contact with consumers if there are issues with getting their paperwork processed is also strongly advised. Sending the required delay letters and making a few phone calls to the consumer may well avert a complaint to DMV or to your bond company.


Being an expert means you’re up to date on the newest legislation and trends in the field. What’s happening right now with business regulation for vehicle dealers? Any predictions on what we can expect in the coming year? 


We made it through the 2015 legislative session without any legislation that will have a major impact on DMV Business Regulation.  We are putting together informative articles addressing legislative changes, which will be published in our January 2016 “Dealer Details” newsletter edition. 


The 2015 Legislature did approve the requested $30.4 million dollars for the first phase of DMV’s Service Transformation Program (STP).  The Service Transformation Program (STP) will upgrade and replace obsolete systems and other technical infrastructure items, and will significantly improve DMV’s business processes. Execution of STP will involve a phased approach over 9-10 years. The approved funding will allow DMV to accomplish the first phase of deliverables which include:

  • Complete readiness planning activities
  • Procure Vehicle Title and Registration System
  • Launch online transaction center – DMV2U
  • Procure Point of Sale and Dealer Systems


Crystal Ignatowski: Where can dealers go to learn more about how to be compliant?


Larry Purdy: Dealers can find a significant amount of helpful information on the DMV website, including the dealer title and registration handbook at The dealer associations are a wealth of information and dealers can also contact their DMV investigator directly. 


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