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Clarification for Dealers Regarding Wisconsin DOT Forms Due November 1, 2020

Although the Wisconsin Department of Transportation (“WDOT”) has been pressing dealers to file forms showing proof of bond or insurance coverage on rented or leased vehicles by November 1, 2020, this requirement does not apply to many dealers.  WDOT has clarified that, even if the dealer is initially named as the lessor in the lease agreement, it does not need to file any form with WDOT showing proof of bond or insurance coverage, if it assigns the lease to a lender and titles the leased vehicle in the lender’s name, rather than its own, which is how consumer lease transactions are typically handled. 

Dealers who engage in other forms of vehicle leasing or rentals will still need to comply with the bond or insurance requirement under section 344.51 of the Wisconsin statutes. For example, if a dealer charges its service customers for use of a vehicle while the customer’s vehicle is being serviced, this will be considered a rental for compensation and trigger the need for compliance.  However, if you allow service customers to use loaner vehicles without charging them for such use, this will not trigger the need to comply.

If compliance is required, the bond or liability coverage must specifically provide all of the following: (a) $25,000 for bodily injury or death to or of one person in one accident; (b) $50,000 for bodily injury or death of two or more persons; and (c) $10,000 for property damage in any one accident.  Dealers may already have this type of insurance coverage through their garage liability insurer and should contact their provider to confirm or to determine if such coverage is available at a lower cost than posting a bond. Dealers who maintain this coverage through their insurer, rather than through a bond, must submit MV2519 Lessor Liability Policy of Insurance Certification Form. Dealers who instead maintain a separate bond to cover liability on rented vehicles or leased vehicles titled in their name must submit MV2509 Lessor Bond Form

To submit either form, the dealer can email it to EMVPARTNER@dot.wi.gov or mail it to the following address:

Wisconsin Division of Motor Vehicles
Dealer and Agent Section
ATTN: Apps Department
4822 Madison Yards Way
Madison WI 53705

A dealer who fails to maintain the required bond or liability insurance for applicable leased or rented vehicles will be directly responsible for damages caused by the negligent operation of the leased or rented vehicle up to the specified coverage amounts. WDOT could also require a non-complying dealer to forfeit up to $200 or take other administrative action. Dealers required to submit either the MV2519 Form or MV2509 Form are advised to do so as close to November 1, 2020 as possible.

The information provided is for general informational purposes only. This post is not updated to account for changes in the law and should not be considered tax or legal advice. This article is not intended to create an attorney-client relationship. You should consult with legal and/or financial advisors for legal and tax advice tailored to your specific circumstances.

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