S T A T E O F N E W Y O R K
________________________________________________________________________
4911
2009-2010 Regular Sessions
I N A S S E M B L Y
February 6, 2009
___________
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
elects to not return any vehicles traded-in by the consumer, the whole-
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08612-01-9
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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
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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.