What's happening
This bill requires manufacturers to compensate auto dealers for losses when used vehicles are unsellable due to safety recalls.
Why it matters
Protects local auto dealers from financial losses. when they are unable to sell used vehicles due to mandatory safety recalls, by requiring manufacturers to compensate them for each month the car remains unsellable.
Provides a clear formula for compensation. dealers receive 1.75% of the vehicle's average trade-in value for every 30 days (or part thereof) that they cannot sell or repair the recalled vehicle, which helps standardize payments and offers predictable support.
Prevents retaliation by manufacturers. against dealers who file claims for this compensation, which helps ensure dealers can assert their rights without fear of losing incentives, inventory, or facing other punitive actions.
Ensures manufacturers cover the cost of recall repairs and replacement parts. at the dealer's standard retail rates, which encourages timely and complete repairs for consumer safety and protects dealers from absorbing recall-related expenses.
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Who cares
Headline styles
Protect Used Car Buyers
Plain English, a few words. Used as the page title.
Sponsors
Senator · Senate District 14
No co-sponsors yet.
History
- Referred to consumer protection
- Print number 5365a
- Amend and recommit to consumer protection
- Referred to consumer protection
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Protect Used Car Buyers
In Assembly Committee · Consumer Affairs And Protection · Sponsor Stacey Pheffer Amato
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5365--A
2019-2020 Regular Sessions
IN SENATE
April 29, 2019
Introduced by Sen. COMRIE -- read twice and ordered printed, and when printed to be committed to the Committee on Consumer Protection -committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
AN ACT to amend the general business law, in relation to safety recalls on used motor vehicles
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The general business law is amended by adding a new section 198-d to read as follows:
§ 198-d. Used motor vehicles; recalls. (a) For the purpose of this section, the following terms shall have the following meanings:
(1) "dealer" shall have the same meaning as paragraph a of subdivision one of section four hundred fifteen of the vehicle and traffic law.
(2) "used motor vehicle" shall have the same meaning as paragraph i of subdivision one of section four hundred fifteen of the vehicle and traffic law.
(3) "stop drive order" shall mean a notification issued under 49 USC section 30118 which includes precautionary advice to stop driving a motor vehicle (including the vehicle identification number for such vehicle).
(b) Where a franchisor or manufacturer, as defined by section four hundred sixty-two of the vehicle and traffic law, directly or indirectly subjects any dealer to any financial or other penalties or otherwise penalizes or prevents a dealer from selling or leasing any used motor vehicle subject to recall, including where any such restrictions are imposed by the manufacturer, either through the issuance of a "stop sell" or any other communication that prevents or penalizes a dealer from offering a vehicle for sale, or federal, state, or local law or regulation:
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03742-03-9
S. 5365--A 2
(1) the franchisor or manufacturer shall, where parts or a remedy are not reasonably available and a policy described in this subdivision is in effect, following fifteen days notice from a dealer that they are in possession of a vehicle subject to the provisions of this section provide to said dealer a payment of one and seventy-five hundredths percent of the value of the used motor vehicle as determined by the average "trade-in" value for a similar used vehicle as indicated in a widely disseminated, publicly available, independent used motor vehicle guide for the year, make, model, and mileage of the used motor vehicle in the possession of the dealer for every thirty days, or portion of thirty days, the dealer is unable to sell, offer to sell, or repair such vehicle due to the inability to satisfy any recall issued for such vehicle or due to a communication described in the opening paragraph of this subdivision received from the manufacturer regarding the sale of such vehicle; and
(2) all reimbursement claims made by a dealer pursuant to this subdivision shall be subject to the procedure established under subdivisions two through seven of section four hundred sixty-five of the vehicle and traffic law.
(c) The manufacturer or franchisor may not retaliate against a dealer who has submitted a claim for reimbursement under this section or who was otherwise compensated for a vehicle subject to a recall. For the purposes of this subdivision, retaliation shall include, but shall not be limited to, reducing the amount of compensation otherwise owed to a dealer, whether through a chargeback, removal from an incentive program, reducing the amount owed under an incentive program, or any other means, imposing additional requirements, withholding inventory, reducing allocation, requiring any facility upgrade, or otherwise surcharging or penalizing the dealer. A dealer may not, however, receive compensation for the same vehicle under recall under this section, as well as under another manufacturer program designed to mitigate dealer costs for the holding of vehicles under recall, unless otherwise entitled to such compensation, and such compensation is equal to or greater than that provided under paragraph one of subdivision (b) of this section.
(d) The manufacturer or franchisor shall pay for any repairs performed by the dealer to remedy any recall, pursuant to the provisions of section four hundred sixty-five of the vehicle and traffic law. Any replacement part provided for a recall repair shall be paid at the existing retail reimbursement rate in existence at the time the repair is performed.
§ 2. This act shall take effect immediately, provided, however, that subdivision (b) of section one hundred ninety-eight-d of the general business law, as added by section one of this act, shall take effect on the sixtieth day after this act shall have become a law.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the general business law, in relation to safety recalls on used motor vehicles
Purpose or general idea of bill
This bill will amend the general business law, in order to establish a new set of standards between franchisors, manufacturers and dealers with respect to used motor vehicles that have open recalls for which parts or a remedy are not immediately available.
Summary of specific provisions
Section 1 of the bill sets definitions of "Dealer," "Used motor vehicle" and "stop drive order." Further, language provides for procedures between manufacturers and dealers when there is a recall, including reimbursement, repair, and storage, and prohibits retaliation relating to issues surrounding recalls.
Section 2 sets the effective date.
Justification
Recalled vehicles are one of the biggest issues affecting the motor vehicle industry. Nearly every make and model has suffered a recall at some point, many of which are not immediately fixable and have a major impact on consumers, dealers, distributors and manufacturers. Federal law provides for a system of dealing with recalls on new motor vehicles sold by franchised dealers, but no such system exists for used vehicles.
This bill would establish certain relationships between franchisors, manufacturers and dealers with respect to used motor vehicles that have open recalls for which parts or a remedy are not immediately available.
Dealers who are presently stuck with vehicle stock that contains automo- biles with open recalls that present unsolvable defects should have some mechanism to be reimbursed or compensated by those entities responsible for the defect that warranted the recall.
Prior legislative history
2017-18: A8268C.
Fiscal implications
None.
Effective date
Immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.