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

BILL NUMBER:S6872B

Title of bill

An act to amend the general business law and the executive 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 subparagraph 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

This act shall take effect on the ninetieth day with provisions.