Establishes the automobile sales protection act

1 Co-sponsor

• Jeffrey D. Klein

BILL NUMBER:S5484B

Title of bill

An act to amend the personal property law, in relation to establishing the automobile sales protection act

Purpose

This bill will provide a three day cooling off period for used vehicle sales.

Summary of provisions

Section 1: Amends Article 12 and sections 500 and 551 of the personal property law, to change the number to article 13 and sections 600 and 601, respectively, and a new article 12 is added titled the "Automobile Sales Protection Act," with the following provisions:

§ 550: Auto purchasers may return a used vehicle at any time for any reason to a dealership within three days of driving the vehicle off the lot. Returning the vehicle will result in a full refund of the purchase price, cancellation of any financing, a return of the trade-in or the trade-in's fair market private sale value. The dealer must return the trade-in if it is still available. The cooling off period is cancelled immediately and the sale becomes final if the buyer either (1) damages the vehicle in any way, (2) materially alters or modifies the vehicle in any way, or (3) drives the vehicle more than 250 miles.

§ 551: The Commissioner of the Department of Motor Vehicles will establish and distribute a disclosure statement that informs purchasers of used motor vehicles of their right to a three day cooling off period. The dealer must distribute this form to the consumer, and both the consumer and dealer must sign it.

§ 552: Any prevailing plaintiff under this article is entitled to reasonable attorney's fees to be paid by the defendant.

Section 2: This act shall take effect on the sixtieth day after it shall have become a law; provided that, effective immediately, the commissioner of motor vehicles is authorized to take any actions necessary to implement the provisions of this act on its effective date are authorized and directed to be taken on or before such date.

Existing law

Under current law, no cooling off period exists for automobile purchases.

Justification

A cooling off period exists for many transactions, but not for motor vehicles. High-pressure sales environments at auto dealerships can result in consumers agreeing to sales and financing terms that they don't necessarily want and can regret upon finalizing a sale. Not having adequate time to review contracts and financing terms can

confuse consumers and also results in consumers agreeing to terms that aren't necessarily in their best interest.

Providing a cooling off period for new cars poses legitimate concerns, including the fact that the car loses thousands of dollars of value the moment it drives off the lot. The concern of value loss does not generally apply to used cars; providing a cooling off period allows the consumer to utilize the vehicle immediately, simultaneously deters fraud by bad actors, and allows consumers a reasonable timeframe to analyze their retail installment contract/loan and all the terms of the sale before finalizing their decision to purchase.

Legislative history

This is a new bill.

Fiscal implications

None.

Local fiscal implications

None.

Effective date

This act shall take effect on the sixtieth day after it shall have become a law; provided that, effective immediately, the commissioner of motor vehicle is authorized to take any actions necessary to implement the provisions of this act on its effective date are authorized and directed to be taken on or before such date.