The Importance of Spanish-Language Documents in Dealership F&I
Providing translated copies of vehicle installment agreements is a best practice to sidestep legal issues
We are often asked about the use of vehicle installment agreements translated into Spanish for those customers who negotiated the deal, or most of the transaction, in Spanish. The question generally revolves around whether the use of translated Spanish-language documents is a legal requirement.
For most states, there is no regulation requiring customers to be provided a copy of the contract they sign in the language it was negotiated. There are exceptions such as California, Texas, and Nevada, to name a few. And there are other states like Illinois that require a disclosure to be signed by the customer when the agreement is negotiated in a language other than English.
Absent specific state regulation, there are several reasons to provide a Spanish copy of the contract in those situations where the deal is negotiated primarily in Spanish. Do any of the following scenarios sound familiar?
- The deal was negotiated entirely in Spanish with the customer, and all the documents signed for the car purchased are in English; or
- A customer relied on the salesperson to orally communicate in Spanish what he was signing; or
- Most of the salespeople at the dealerships speak Spanish, and half the dealerships’ sales are conducted in Spanish. All contracts, however, are presented in English.
Each of these scenarios occurred in states where there was no statute or regulation requiring the dealership to provide a Spanish translation of the vehicle installment agreement to the customer. Yet in each instance, the dealership was found liable for unfair and deceptive practices either by a state attorney general or court.
The customers’ complaints were bolstered by the fact that the written terms of an agreement negotiated in Spanish were presented in English only, and explained to the customer by the same dealership personnel who negotiated the deal. This factor, coupled with claims of nondisclosure, make it easy to side with the consumer.
Although the Consumer Financial Protection Bureau (CFPB) has discussed issues concerning non-English speaking consumers in the consumer finance market, the agency has issued no guidance or rule on the same.
The Federal Trade Commission requires the Used Car Buyers Guide to be posted on the vehicle in Spanish before you negotiate a used car transaction in Spanish. The Spanish-speaking customer must also be provided a copy of the Spanish Buyers Guide. No other federal regulation requires the use of translated documents.
The issue in most jurisdictions boils down to best practices and protecting the dealership. Absent any claims of unfair dealing, a vehicle transaction negotiated in Spanish, then reduced to writing in English, creates a question of whether a contract has even been formed. In several cases, courts have set aside contracts, finding there was no “meeting of the minds.”
In other words, the buyer understood the terms one way in Spanish, which did not mesh with the English contract. This is a situation that would have been easily avoided had the customer been able to review a Spanish translation.
Vehicle installment agreements are available in Spanish. If you are not sure where to get them, check with your vendor as most, if not all, have Spanish forms. Then use them—particularly if you advertise in Spanish or serve the Spanish-speaking community.
The only difference in your process will be to provide a Spanish copy of the vehicle installment agreement the customer is being asked to sign for their review. The English agreement will remain the document signed by the customer, with the translated copy strictly for the customer’s use and understanding.
David R. Missimer, firstname.lastname@example.org, is general counsel for Automotive Compliance Consultants Inc. He spent 28 years in private practice as a litigator representing lenders, auto dealers, and numerous other entities and individuals. He has worked with dealership compliance issues since 2003 as co-founder of Automotive Compliance Consultants. He is a member of the National Association of Dealer Counsel, American Financial Services Association, and National Automotive Finance Association.