What is prohibited concerning dealer funds?

The correct answer is that commingling dealer funds is prohibited. Commingling refers to mixing dealer funds with personal funds or other types of unrelated funds. This practice can lead to a lack of transparency and accountability, making it difficult to track transactions and the financial health of the dealership. It is essential for dealers to maintain clear separation between their business finances and personal finances to ensure compliance with regulations and proper management of the business's financial resources.

Maintaining distinct accounts for dealer operations helps protect both the dealer and the consumers and fosters trust in business practices. Clear record-keeping is also vital for audits and when addressing any potential disputes. By refraining from commingling, dealers enhance their credibility and ensure their operations meet regulatory standards, ultimately contributing to a more robust and compliant business model.