This bill has been amended

Bill S6872-2011

Relates to the refund to a consumer of money from a used car dealer for failing to correct a malfunction or defect

Establishes when a used car dealer has to refund a consumer his or her money for failing to correct a malfunction or defect as required by the warranty.

Details

Actions

  • May 2, 2012: ADVANCED TO THIRD READING
  • May 1, 2012: 2ND REPORT CAL.
  • Apr 30, 2012: 1ST REPORT CAL.615
  • Apr 2, 2012: REFERRED TO CONSUMER PROTECTION

Meetings

Calendars

Votes

VOTE: COMMITTEE VOTE: - Consumer Protection - Apr 30, 2012
Ayes (8): Zeldin, Ball, Fuschillo, Marcellino, O'Mara, Adams, Hassell-Thompson, Huntley
Ayes W/R (1): Little
Nays (1): Squadron

Memo

BILL NUMBER:S6872

TITLE OF BILL: An act to amend the general business law, in relation to the refund to a consumer of money from a used car dealership for failing to correct a malfunction or defect

PURPOSE OR GENERAL IDEA OF BILL: To include within the Used Car Lemon Law a similar provision to one that exists within the New Car Lemon Law.

SUMMARY OF SPECIFIC PROVISIONS: This bill amends paragraph 1 and sub-paragraph f of paragraph 3 of subdivision c of Section 198-b of the General Business Law to establish a mileage credit for cars that qualify under the Used Car Lemon Law.

JUSTIFICATION: On December 14, 2006 the Court of Appeals issued a decision in the combined cases of In the Matter of General Motors Corporation v. James Warner and In the Matter of Daimler Chrysler corporation v. Eliot Spitzer. 7 N.Y.3d 653 that upheld the Attorney General's revised interpretation of the New Car Lemon Law. The Attorney General's new interpretation held that a consumer may be entitled to relief if, within the prescribed periods, four or more unsuccessful repair attempts were made or the vehicle was out of service for 30 days, notwithstanding that the condition complained of was subsequently repaired. Previously, a consumer would be eligible for a refund or replacement vehicle only when the purchaser could demonstrate that a defect still existed as of the date of arbitration. Similar provisions exist under the Used Car Lemon Law, except that only three or more repair attempts are required to qualify. A consumer has four years in which to bring an action under the Used Car Lemon law. At the oral arguments before the Court of Appeals, the issue was raised that a consumer could drive the car for significant period of time before filing an action, either because the car was repaired prior to the commencement of the action or because the defect which caused the car to qualify was not such that the car was unsafe or undriveable, thereby significantly altering the value of the vehicle once returned. The Attorney General's office indicated that the mileage credit formula in the New Car Lemon Law that reduces the amount which the consumer recoups upon return of the vehicle was a significant tool to prevent any attempted fraud. Such a mileage credit does not exist in the Used Car Lemon Law. This legislation would include in the Used Car Lemon Law this important anti-fraud measure that is necessary given the Court of Appeals decision.

PRIOR LEGISLATIVE HISTORY:

New Bill.

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: Immediately.


Text

STATE OF NEW YORK ________________________________________________________________________ 6872 IN SENATE April 2, 2012 ___________
Introduced by Sen. ZELDIN -- read twice and ordered printed, and when printed to be committed to the Committee on Consumer Protection AN ACT to amend the general business law, in relation to the refund to a consumer of money from a used car dealership for failing to correct a malfunction or defect THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraph 1 of subdivision c of section 198-b of the gener- al business law, as amended by chapter 444 of the laws of 1989, is amended to read as follows: 1. If the dealer or his agent fails to correct a malfunction or defect as required by the warranty specified in this section which substantial- ly impairs the value of the used motor vehicle to the consumer after a reasonable period of time, the dealer shall accept return of the used motor vehicle from the consumer and refund to the consumer the full purchase price, or in the case of a lease contract all payments made under the contract, including sales or compensating use tax, less AN AMOUNT EQUAL TO TWENTY-FIVE CENTS PER MILE FOR EACH MILE IN EXCESS OF THE MILEAGE APPLICABLE TO THE VEHICLE CONTAINED IN SUBDIVISION B OF THIS SECTION THAT THE VEHICLE HAS BEEN DRIVEN SINCE THE CONSUMER PURCHASED OR LEASED THE VEHICLE FROM THE DEALER, AND LESS a reasonable allowance for any damage not attributable to normal wear or usage, and adjustment for any modifications which either increase or decrease the market value of the vehicle or of the lease contract, and in the case of a lease contract, shall cancel all further payments due from the consumer under the lease contract. In determining the purchase price to be refunded or in determining all payments made under a lease contract to be refunded, the purchase price, or all payments made under a lease contract, shall be deemed equal to the sum of the actual cash difference paid for the used motor vehicle, or for the lease contract, plus, if the dealer elects to not return any vehicles traded-in by the consumer, the whole- sale value of any such traded-in vehicles as listed in the National Auto Dealers Association Used Car Guide, or such other guide as may be speci- fied in regulations promulgated by the commissioner of motor vehicles, as adjusted for mileage, improvements, and any major physical or mechan- ical defects in the traded-in vehicle at the time of trade-in. The deal- er selling or leasing the used motor vehicle shall deliver to the
consumer a written notice including conspicuous language indicating that if the consumer should be entitled to a refund pursuant to this section, the value of any vehicle traded-in by the consumer, if the dealer elects to not return it to the consumer, for purposes of determining the amount of such refund will be determined by reference to the National Auto Dealers Association Used Car Guide wholesale value, or such other guide as may be approved by the commissioner of motor vehicles, as adjusted for mileage, improvements, and any major physical or mechanical defects, rather than the value listed in the sales contract. Refunds shall be made to the consumer and lienholder, if any, as their interests may appear on the records of ownership kept by the department of motor vehi- cles. If the amount to be refunded to the lienholder will be insuffi- cient to discharge the lien, the dealer shall notify the consumer in writing by registered or certified mail that the consumer has thirty days to pay the lienholder the amount which, together with the amount to be refunded by the dealer, will be sufficient to discharge the lien. The notice to the consumer shall contain conspicuous language warning the consumer that failure to pay such funds to the lienholder within thirty days will terminate the dealer's obligation to provide a refund. If the consumer fails to make such payment within thirty days, the dealer shall have no further responsibility to provide a refund under this section. Alternatively, the dealer may elect to offer to replace the used motor vehicle with a comparably priced vehicle, with such adjustment in price as the parties may agree to. The consumer shall not be obligated to accept a replacement vehicle, but may instead elect to receive the refund provided under this section. It shall be an affirmative defense to any claim under this section that: (a) The malfunction or defect does not substantially impair such value; or (b) The malfunction or defect is the result of abuse, neglect or unreasonable modifications or alterations of the used motor vehicle. S 2. Subparagraphs 5 and 6 of paragraph 1 of subdivision f of section 198-b of the general business law, as separately amended by chapters 444 and 609 of the laws of 1989, are amended to read as follows: 5. If the same problem cannot be repaired after three or more attempts, you are entitled to return the car and receive a refund of your purchase price or of all payments made under your lease contract, and of sales tax and fees, minus AN AMOUNT EQUAL TO TWENTY-FIVE CENTS PER MILE FOR EACH MILE IN EXCESS OF THE MILEAGE APPLICABLE TO THE VEHI- CLE CONTAINED ABOVE THAT THE VEHICLE HAS BEEN DRIVEN SINCE THE CONSUMER PURCHASED OR LEASED THE VEHICLE FROM THE DEALER, AND LESS a reasonable allowance for any damage not attributable to normal usage or wear, and, in the case of a lease contract, a cancellation of all further payments you are otherwise required to make under the lease contract. 6. If your car is out of service to repair a problem for a total of fifteen days or more during the warranty period you are entitled to return the car and receive a refund of your purchase price or of all payments made under your lease contract, and of sales tax and fees, minus AN AMOUNT EQUAL TO TWENTY-FIVE CENTS PER MILE FOR EACH MILE IN EXCESS OF THE MILEAGE APPLICABLE TO THE VEHICLE CONTAINED ABOVE THAT THE VEHICLE HAS BEEN DRIVEN SINCE THE CONSUMER PURCHASED OR LEASED THE VEHI- CLE FROM THE DEALER, AND LESS a reasonable allowance for any damage not attributable to normal usage or wear, and, in the case of a lease contract, a cancellation of all further payments you are otherwise required to make under the lease contract. S 3. This act shall take effect immediately.

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