A 1310 — "Used Car Buyers' Bill of Rights"; prohibits certain "as is" sales of used motor vehicles.

          d.  d.    (1)  After the consumer exercises the right to cancel a contract under the contract cancellation option agreement, the dealer shall cancel the contract and provide the consumer with a full refund, including the appropriate portion of the sales tax or other fees paid, within three business days for a used motor vehicle purchased by cash, credit or debit card, or bank loan, or 10 business days for a used motor vehicle purchased by check.

          (2)  If the1[the consumer was not chargedcharged] a dealer accepts a used motor vehicle in lieu of the fee1 for the contract cancellation option agreement, the dealer shall return to the consumer, within three business days after the consumer exercises the right to cancel the contract, any1[any] the1 used motor vehicle the consumer conveyed to the dealer as a down payment or trade-in.  If the dealer sold or otherwise transferred title to the used motor vehicle that was conveyed as a down payment or trade-in, the full refund described in paragraph (1) of this subsection shall include the fair market value of the used motor vehicle left as a down payment or trade-in, or its value as stated in the contract, whichever is greater.

          (3)  If the consumer was charged for the contract cancellation option agreement, the dealer shall retain any motor vehicle the consumer conveyed to the dealer as a down payment or trade-in until the consumer exercises the right to cancel or the right to cancel expires.

If the consumer exercises the right to cancel the contract, the dealer shall return to the consumer, within three business days after which the consumer exercises the right to cancel the contract, any motor vehicle the consumer conveyed to the dealer as a down payment or trade-in.  If the dealer has inadvertently1[inadvertently]1 sold or otherwise transferred 1the1 title to the motor vehicle as1[as the result of a bona fide error,error,]1 despite taking reasonable procedures1[procedures to avoid that error, the inadvertentinadvertent] measures to prevent the1 sale or transfer of title 1, that action1 shall not be deemed a violation of this paragraph, and the full refund described in paragraph (1) of this subsection shall include the retail market value of the motor vehicle conveyed as a down payment or trade-in, or its value as stated in the contract, whichever is greater.

          e.  e.     If the dealer received a portion of the purchase price by credit card, or other third-party payer on the consumer’s account, the dealer may refund that portion of the purchase price to the credit card issuer or third-party payer for credit to the consumer’s account.

          f.   f.     Notwithstanding subsection a.

of this section, a dealer is not required to offer1: a contract cancellation option agreement if the consumer has exercised this right with the dealer during the immediately preceding 30 days.  A dealer shall not be required to give notice to a subsequent consumer that a used motor vehicle has been returned pursuant to this section.  This subsection does not abrogate or limit any disclosure obligation imposed pursuant to any other law.

          g.  (1)1 Thisoffer section does not affect or alter the legal rights, duties, obligations, or liabilities of the consumer, the dealer, or the dealer’s representatives, that would exist in the absence of a contract cancellation option agreement. agreement Theif consumer is the ownerconsumer ofhas aexercised usedthis motorright vehiclewith upon receipt of the vehicle from the dealer untilduring it is returned to the dealer1[immediately]1 pursuantpreceding to30 adays contract1[. cancellation option agreement.

     A h.  dealer Nothingshall innot thisbe sectionrequired isto] intended; to affect the ability of a consumer to rescind the contract or revoke acceptance under any other law.

 or      4.   (2)1  (Newgive section) notice A dealer shall include with any contract to leasea orsubsequent purchaseconsumer that a used motor vehicle ahas noticebeen withreturned apursuant headingto inthis atsection.  least     12-pointThis boldsubsection typedoes andnot theabrogate textor inlimit atany leastdisclosure 10-pointobligation boldimposed type,pursuant circumscribedto byany aother line,law. immediately above the contract signature line, that reads as follows:

     g.    This section does not affect or alter the legal rights, duties, obligations, or liabilities of the consumer, the dealer, or the dealer’s representatives, that would exist in the absence of a contract cancellation option agreement.  The consumer is the owner of a used motor vehicle upon receipt of the vehicle from the dealer until it is returned to the dealer pursuant to a contract cancellation option agreement.

     h.    Nothing in this section is intended to affect the ability of a consumer to rescind the contract or revoke acceptance under any other law.

     1i.    The provisions of this section shall not apply to sales of motorcycles, as defined by R.S.39:1-1, or off-road vehicles as defined by section 32 of P.L.2009, c.275, (C.39:3C-32).1        4.    (New section)  A dealer shall include with any contract to lease or purchase a used motor vehicle a notice with a heading in at least 12-point bold type and the text in at least 10-point bold type, circumscribed by a line, immediately above the contract signature line, that reads as follows:

and      j.     To [fail to provide a clear written explanation, prior to sale, of what is meant by the term "as is," if the] sell or offer for sale to a consumer a used motor vehicle [is sold] "as is [.]," unless:unless 1the used motor vehicle has been1 :

     (1)   the1[the used motor vehicle which has beenbeen]1 declared a total loss by an insurance company, or reported as a total loss in a National Motor Vehicle Title Information System history report, and with1[with respect to which the consumer, at or prior to the time of sale, has been advised in writing that the used motor vehicle has been declared a total loss;loss] this information is reported to the consumer in writing at or prior to the time of sale1;

or      (2)   the1[the used motor vehicle which has beenbeen]1 issued a salvage certificate of title in accordance with the provisions of P.L.1983, c.323 (C.39:10-31 et seq.), or reported as a salvage vehicle in a National Motor Vehicle Title Information System history report, and with1[with respect to which the consumer, at or prior to the time of sale, has been advised in writing that the used motor vehicle is a salvage vehicle.vehicle] this information is reported to the consumer in writing at or prior to the time of sale1 .

          10.  The provisions of sections 3, 4, and 5 of P.L.1995, c.373 (C.56:8-69 through C.56:8-71) shall not apply to:to 1a used motor vehicle1:

          a.  a.     any1[any used motor vehiclevehicle]1 sold for less than $3,000;

          b.  b.    any1[any used motor vehiclevehicle]1 over seven or1[or moremore]1 model years old;

          c.  c.     any1[any used motor vehicle which has beenbeen]1 declared a total loss by an insurance company, or reported as a total loss in a National Motor Vehicle Title Information System history report, and with1[with respect to which the consumer, at or prior to the time of sale, has been advisedadvised] reported to the consumer1 in writing that the used motor vehicle has been declared a total loss [by an insurance company];

          d.  d.    any1[any used motor vehicle which has beenbeen]1 issued a salvage certificate of title in accordance with the provisions of P.L.1983, c.323 (C.39:10-31 et seq.), or reported as a salvage vehicle in a National Motor Vehicle Title Information System history report, and with1[with respect to which the consumer, at or prior to the time of sale, has been advisedadvised] reported to the consumer1 in writing that the used motor vehicle is a salvage vehicle;

or,           e.  e.     any1[any used motor vehiclevehicle]1 with more than [100,000] 125,000 miles.

    STATEMENT         This bill, designated the “Used Car Buyers’ Bill of Rights,” prohibits “as is” sales of used motor vehicles to consumers, requires dealers to offer contract cancellation option agreements for certain used vehicles, and establishes additional requirements for dealers selling used vehicles.  The bill does not apply to transactions between private parties or the sale of used motorcycles, motor homes, or off-road vehicles.

     The bill makes it an unlawful practice under the consumer fraud act for a dealer to sell to a consumer a used vehicle deemed to be “certified” or any other similar descriptive term that implies the vehicle complies with the terms of a used motor vehicle certification program if:

the dealer knows or should know that the odometer is inaccurate;

the dealer knows or should know that the vehicle was reacquired by a manufacturer or dealer pursuant to state or federal warranty laws;

the title to the vehicle is inscribed with the notation “flood,” “junk,” “Lemon Law Buyback,” “manufacturer repurchase,” “nonrepairable,” “salvage,” or another similar title designation;

the vehicle sustained damage in an impact, fire, or flood which substantially impairs its use or safety;

the dealer knows or should know that the vehicle sustained frame damage which, after repair prior to sale, substantially impairs the use or safety of the vehicle;

prior to sale, the dealer fails to provide a consumer with a completed inspection report indicating all the components were inspected;

the dealer disclaims any warranties of merchantability on the vehicle;

or the term “certified,” or any other similar descriptive term, is used in a manner that is untrue or misleading.

     The bill requires that a dealer offer a consumer a contract cancellation option agreement that allows the consumer to return the used motor vehicle, without cause, if the used motor vehicle has a purchase price of less than $40,000.  The contract cancellation option agreement gives the consumer the right to cancel the contract and obtain a refund.  The bill sets forth the information to be contained in any contract cancellation option agreement, including the deadline for exercising the cancellation option and returning the vehicle to the dealer, the maximum mileage the vehicle may be driven, which could not be less than 250 miles, and any restocking fee.  A dealer would be required to apply toward the restocking fee the price paid by the consumer for the contract cancellation option agreement.  A dealer also is required to give notice at its business location and in the contract for the used motor vehicle that there is no cancellation period, sometimes referred to as a “cooling-off” period, unless a consumer obtains a contract cancellation option.  Under the bill, the requirement that a dealer offer a contract cancellation option to a consumer does not apply to total loss or salvage vehicles.       The bill provides that the fee for the contract cancellation option agreement is not to exceed the following:

(1) $75 for a used motor vehicle with a cash price of $5,000 or less;

(2) $150 for a used motor vehicle with a cash price of between $5,000.01 and $10,000;

(3) $250 for a used motor vehicle with a cash price of between $10,000.01 and $30,000;

or (4) one percent of the purchase price for a used motor vehicle with a cash price of $30,000.01 to $40,000.

     Under the bill, after a consumer exercises the right to cancel a contract under the agreement, no later than three business days for a used motor vehicle purchased by cash, credit or debit card, or bank loan, or 10 business days for a used motor vehicle purchased by check, the dealer is required to cancel the contract and provide the consumer with a refund, including the appropriate portion of the sales tax or other fees paid.  In addition, within three business days, a dealer would be required to return to the consumer any used vehicle the consumer conveyed to the dealer as a down payment or trade-in.  If the dealer sold or otherwise transferred title to that used vehicle, the refund would include the fair market value of that used vehicle or its value as stated in the contract, whichever is greater.

     Currently, P.L.1995, c.373 (C.56:8-67 et seq.) sets forth minimum warranty requirements when a dealer sells to a consumer a used vehicle.  Under current law, in the event that a used motor vehicle is sold “as is,” it is an unlawful practice for a dealer to fail to provide a clear written explanation, prior to sale, of what is meant by the term “as is.”  The bill amends current law to make it an unlawful practice under the consumer fraud act for a dealer to sell a consumer a used vehicle “as is,” i.e., without any warranty.  The bill eliminates the existing ability of a dealer to sell a consumer a used vehicle “as is” as a result of negotiating a lower price in exchange for waiving the dealer’s obligation to provide a warranty.  The bill revises the mileage requirements under the dealer’s required written warranty.  If the motor vehicle has less than 40,000 miles, the warranty would be 90 days or 3,750 miles, whichever comes first.  If the motor vehicle has 40,000 miles or more, but less than 80,000 miles, the warranty would be 60 days or 2,500 miles, whichever comes first.  If the used motor vehicle has 80,000 miles or more, but less than 125,000 miles, the warranty would be 30 days or 1,250 miles, whichever comes first.  If the used motor vehicle has 125,000 miles or more, a consumer would be entitled to any implied warranties created by law.       Under the bill, a dealer may sell a used motor vehicle “as is” and is not required to provide a written warranty to a consumer if the used motor vehicle has been issued a salvage certificate of title by the New Jersey Motor Vehicle Commission or declared a total loss by an insurance company, of if the used motor vehicle has been reported as a salvage vehicle or as a total loss in a National Motor Vehicle Title Information System history report.

     An unlawful practice under the consumer fraud act is punishable by a monetary penalty of not more than $10,000 for a first offense and not more than $20,000 for any subsequent offense.  Additionally, violations may result in cease and desist orders issued by the Attorney General, the assessment of punitive damages, and the awarding of treble damages and costs to the injured party.