Record Retention Regulations Explained

/ March 29, 2019/ Uncategorized/ 0 comments

Every auto dealer in the US has the legal obligation to retain records of important documents. Not keeping a record of important documents can lead to a hefty fine. The problem is that there are different regulations by different federal bodies regarding data retention.

In this post, we will explain the record retention regulations for auto dealers set by different federal agencies in the US. Understanding the regulations is important to avoid having to pay penalties due to not conforming to the required rules.

Record Retention Rules: An Overview

Auto dealers in the US should create a data retention policy regarding sales, loans, leases, and other important documents. In addition, federal laws and regulations mandate that the record retention rules for auto dealers should include email, memos, and contracts. Different departments have set specific regulations for retention of the records. Here is a brief overview of the data retention rules by different federal agencies in the US.

Environment Protection Agency (EPA)

The US Environment Protection Agency (EPA) has set specific regulations for record keeping. The agency requires that auto dealers keep a record of handling of all hazardous waste including car oil. Auto dealers should record waste shipment list, reports, and results. The records should be kept for up to three years. Some auto dealers build underground storage tanks (USTs) to store oil. They need to keep a record of documents pertaining to the USTs. Documents related to UST design, installation, and repair should be kept for up to five years as per EPA regulations.

Department of Transportation

Auto dealers also need to meet the requirements of the US Department of Transportation (DoT). As per the DoT regulations, auto dealers have to retain a record of odometer mileage for up to five years. In addition, auto dealers must keep a record of names and contact details of companies from which tires were purchased for up to three years. They also need to retain documents related to airbag switch installation indefinitely. Dealers must keep a record of safety compliance reviews indefinitely as well. Here is a brief overview of these and other documents that must be retained as per the directive of the US DoT.

Table 1: The US DoT’s requirement for data retention duration for auto dealers

DOCUMENTS

DURATION

ODOMETER MILEAGE 5 years
NAME AND ADDRESS OF TIRE SUPPLIER 3 years
AIRBAG SWITCH INSTALLATION Indefinitely
SAFETY COMPLIANCE REVIEWS Indefinitely
BRAKE INSPECTOR REVIEW 1 Year
CAR INSPECTION AND MAINTENANCE 14 months (6 months after a car is sold)
EMPLOYEE DRUG TESTING 5 years if positive; 1 Year if negative


Federal Trade Commission

The Federal Trade Commission (FTC) also requires auto dealers to retain certain documents. They need to retain disclosure statements for up to two years. Also, the dealers need to keep credit application records for up to 25 months.

The documents related to sales of cars including warranty and service contracts, sales guides, sales contract should be kept indefinitely. The record of sales of auto parts should be kept for up to six years.

Apart from the above departments, there are special federal regulations for data retention. All auto dealers should keep records of employees such as time cards, compensation records, and others for up to three years. They also need to keep inventory records for about two years.

Consider investing in a cloud storage solution to keep the cost of storage down. An auto dealer cloud storage solution will make it easy to comply with the above regulations.

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