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Thread: "Turnkey" road legality question

  1. #1
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    "Turnkey" road legality question

    Ok so this may be a stupid question. I know that in order to sell a completed drivable car in the U.S. the manufacturer has to get the car through all the legal mumbo jumbo/crash testing stuff in order to market the car to the public... requiring tons of funding. I see kit car companies advertising their cars as kits therefore bypassing the legal requirements and leaving it up to the individual owner to get the car registered as a kit. The question is.... when kit car makers advertise their "turnkey" packages how is it that they are able to avoid all the requirements that a certified car manufacturer is held to? I mean they are essentially selling a completed car at that point...not a "kit"


  2. #2

    Re: "Turnkey" road legality question

    I'm not sure of all of the legalities involved but a turnkey kit is usually (but not always) built on a donor that was already a production car that had already "passed". Turnkeys on Custom Frames etc can sometimes qualify as "home built", Constructed Vehicles etc depending on state.

    Also, Many kit car, replica, custom builders are not actually considered "automobile manufactures" like Ford , GM for example.

    It's funny how many "lines of work" have what appear to be loopholes. I'm a PA Licensed Real Estate Broker and we do Commercial Land Development. Although we are not stock brokers (well, one partner is), when we obtain financing for a project through investments, we must comply (and rightly so) with the Security and Exchange Commission (S.E.C) Regulations when we offer an investment to an investor. We may not "solicit" investors by cold calling, internet sites, infomercials etc. We must seek Qualified Investors kind of through a "roundabout way".

    A CPA with a client who is interested in investing in a new Shopping Center for example may pass our name along and the investor can contact us. We then can provide him with SEC approved documents about the project. Or, we could make direct contact with him after, what amounts to an "introduction" from the CPA. It prevents people from predatory types of behavior.

    However, when we build the exact same project as a TIC or Tennants in Common. (a different form of ownership for the buyer of the shopping center or mall for example), we have a "more relaxed" set of rules to follow and the tax implications are less for the investor. A win - win for both of us but an "open door" for a sleazy developer to possibly scam a less knowledgeable investor. :-[

    (way more than you wanted to know I'm sure but I was just trying to make a comparison..... probably a confusing one...)

    A re-body (depending on state) can run into some other "issues",. I'm in PA and now we have to apply for a SCV title (Specially Constructed Vehicle). After the car is finished, it need to be inspected by an Approved Inspection Station (Usually a body shop not the average gas station that does inspections currently in PA).

    It's not a huge hassle but it's extra work,. Some states do not have this regulation. My Ferrari 308 replica was registered, titled and inspected as a 1986 Fiero for quite a number of years with no problems since it was completed.

    One other thing. Turnkeys will usually not meet production "numbers" like a daily driver. For example, it's doubtful that D&R produced 121,000 Lambo turnkeys in a model year.

    Special cars that are limited production (built by a factory) in the past had different regulations in the past.

    I'm sure they have plenty of regulations that "could apply" to someone "pumping out" a moderate number of turnkey cars but I think the logistics of trying to police that would be a bit tough. On the other side of the coin, if Ford or GM decided to put out a 2700lb fiberglass bodied "supercar" and was planning to make 3000 or 6000 of them, they would have to meet the requirements of building a new platform.

    Much like GM rushed out the new GTO. They couldn't even mod the hood without "having to then meet new design standards, emission, safety etc. While the first GTO came out "under the Grand Prix platform" with a flat hood, they made the change (as well as other changes) on the following model years.

    There is so much to the regulations of producing a new design , it's mind boggling. Way too much to even remember. I think a limited production car made in lower quantities can "sneak through" a bit easier.

    I'm sure other will chime in with more "rules and regs".
    Previous Builds: AF - 308 Replica w/ V8 & GM F-body Testarossa Replica
    Current Toys: 308 V8 Project #2, 91 V-12 Jaguar XJ-S Coupe. 1983 Hurst\Olds, 1979 Trans/AM - 468CID Bracket Car.

  3. #3
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    Re: "Turnkey" road legality question

    Thanks for the response I wonder what the requirements are to be considered a small manufacturer in the eyes of the Government? I mean if you are a "boutique" manufacturer that builds say 1 hundred units per year can they hold you to the same standard as a GM for instance? I know Saleen had to file for an exemption to sell his S7 cars without airbag restraints so I assume there is no separate standard for manufacturers of cars whether you sell 100 or 100,000 vehicles.....

  4. #4

    Re: "Turnkey" road legality question

    That's a great question.

    I'm sure there are some guidelines about that. Even without those guidelines, there are plenty of other issues that can arise as well.

    For example. If I produce 25 Lambo Replicas and the steering racks I use fail and 2 people crash and get killed. You can imagine the insurance that you would need to be able to begin even a small "production" like that. I think overall that the Liability in something like that could be huge. I think producing as little as just a few cars or even 1 for that matter would be a huge undertaking. It just seem to be a lot of red tape and I think that it's all for good reason.

    I'd love to find out more about it. I have no plans to build anything other than my own toys though.

    I'm sure there is a lot to it. Much more than I've thought about that's for sure.
    Previous Builds: AF - 308 Replica w/ V8 & GM F-body Testarossa Replica
    Current Toys: 308 V8 Project #2, 91 V-12 Jaguar XJ-S Coupe. 1983 Hurst\Olds, 1979 Trans/AM - 468CID Bracket Car.

  5. #5
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    Re: "Turnkey" road legality question

    Wellllll, here I go again, I appologize up front for sticking my nose where it does not belong sometimes. I have been working on a custom design and I thought I owed it to myself to look at marketing and selling a complete vehicle, maybe 6-10/year. I hired my attorney to look into it because I was once told that I could build a limited number of fully built cars and not fall under the normal BS. As it turns out, the letter of the law is such if you produce one car, completely built, you must meet all of the NHTSA and EPA standards for the date the car was built. Now with that said, a lot of companies still do it. The most popular way is for company x sell the "kit" to company y (same company owners) and the purchaser commisions company y to build the "kit." Both of these "companies" sometimes even occupy the same building. We always got around it with street rods because most states did not require registration and titles until the 1950's. This makes it very easy to get a title and registration for an old/old looking car. I also know that some "turnkeyers" tell you to just go back to your homestate and follow through with the process as if you built the car. To my knowledge the Saleen S7 is built in a non-traditional way. It is not NHTSA/EPA tested and approved from what I understand.

  6. #6

    Re: "Turnkey" road legality question



    Hey Bartman,

    Get your nose out of here! Just kidding

    Great info. I think you are right on the mark. The legalities of something like producing cars really has to be huge.
    Previous Builds: AF - 308 Replica w/ V8 & GM F-body Testarossa Replica
    Current Toys: 308 V8 Project #2, 91 V-12 Jaguar XJ-S Coupe. 1983 Hurst\Olds, 1979 Trans/AM - 468CID Bracket Car.

  7. #7
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    Re: "Turnkey" road legality question

    A small aside but the UK has a category called SVA (single vehicle approval), which under the rules mean you can construct up to 500 vehicles of a single type. the basics of the rules are contruction and use, covers such things as lights in the correct place , seatbelts and passenger /pedestrian protection (minimum radii on surfaces).
    Unfortunately USA is so large and has so many small but greatly differing rules from state to state, that an SVA type scenario is a utopian goal.

    which probably explains why there are more products being developed in the Uk than in USA

  8. #8
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    Re: "Turnkey" road legality question

    Yeah here in the US it is easier to title and register a homemade plane than a homemade car, go figure. I have a customer who is a US senator. I explained this to him, he wanted to know why it was so easy to register a plane, not why is it so hard to title a homebuilt car. I wander just how bad capital hill is sometimes. I think they surround themselves with assistants and pages to keep from getting lost, or have someone to tell them when to eat and go to the bathroom.

  9. #9
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    Re: "Turnkey" road legality question

    Oh, I have not gotten off my soapbox yet. The reason it is so hard here in the US. Nothing is ever anyones fault. You drive your car 80 mph into a tree and get killed, the NHTSA thinks it should require all cars built after a certain date to engineer something to prevent that from happening. Am I the only one who sees a problem with that?

  10. #10
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    Re: "Turnkey" road legality question

    but its a self generating trifecta, the insurance companies penalise manufactures that do not have "passive safety", which in turn gets focus from the legislators, which in turn drives the oems to include More and more passive safety to get those wonderful 5 star crash ratings!!. remember when 1 air bag was considered all you would ever need!


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