S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                   893

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                               (PREFILED)

                             January 5, 2011
                               ___________

Introduced  by M. of A. PHEFFER -- read once and referred to the Commit-
  tee on Consumer Affairs and 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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
              

                                                           LBD00803-01-1

A. 893                              2

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

A. 893                              3

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.