False or Worthless Warranty Claim

Woman with broken car

A lawsuit claims that a New Jersey-based auto dealer that specializes in high-end used cars sold customers warranties that did not exist and pocketed the thousands of dollars customers paid for them.

The suit alleges that the firm and its employees pushed and sold the warranties to unsuspecting car buyers for years. Some customers claim they only learned the warranties were no good when they tried to use them after their vehicles developed problems.

Complaints about worthless or deceptive warranties are common.

Several laws can be violated,

1) New Jersey Consumer Fraud Act prohibiting deception, unconscionable practices, and fraud,

2. New Jersey Used Car Lemon Law,

3. Federal Magnuson Moss Act.

Call (973) 598-1980 for a Free Consultation on Your Warranty Claim

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February 19, 2018 0

Chrysler Water Leak, Repurchase of Vehicle Order in case handled by Law Office of Howard Gutman

State of New Jersey, Office of Administrative Law

INITIAL DECISION, OAL DKT. NO. CMA 9965-02
ROBERT A. GIGLIO,

Petitioner,
v.
DAIMLER CHRYSLER MOTOR CORPORATION,
Respondent.
________________________________
Howard A. Gutman, Esq. for petitioner

Beth Wallach, Esq., for respondent (Hardin, Kundla, McKeon, Poletta & Polifroni, attorneys)

BEFORE BARRY N. FRANK, ALJ:

Statement of the case and procedural history
Robert A. Giglio filed an application for the Lemon Law dispute resolution with the New Jersey Division of Consumer Affairs on or about November 25, 2002, seeking relief from the respondent under the provisions of the New Jersey Lemon Law, N.J.S.A. 56:12-29 to-49. Their application was accepted on December 3, 2002 and subsequently transferred to the Office of Administrative Law as a contested matter pursuant to N.J.S.A. 52:14B-1 to -15 and N.J.S.A. 52:14F-1 to -13. This matter was scheduled to be heard at the Newark location on April 4, 2003 and the hearing took place on that date. After the hearing took place on April 4, 2003, the record was closed.

Robert A. Giglio was the first to present testimony with regard to this matter. Mr. Giglio, the petitioner, testified that he purchased the vehicle in question, a 2001 Dodge Dakota, on August 25, 2001 and took delivery of the vehicle on that date. The total sales price of the vehicle was $27,208.05 and the vehicle was financed at the time of the purchase (see Exhibit P-1).

Petitioner testified that amongst the difficulties he has reported and attempted to have serviced at the dealership are the following: (1) vehicle surges forward when stopped due to erratic idle problem; (2) front passenger floor consistently fills with water due to leak problem; (3) the bed of the truck is misaligned; (4) there are paint defects on the body of the vehicle in question.

From the petitioner’s testimony, it appears the largest problem is that of the consistent water leakage. Petitioner testified that on numerous occasions he has brought the vehicle in for repairs for the water problem which takes place consistently on the passenger side of the vehicle. Petitioner testified that large puddles have formed on the right front passenger side of the vehicle which creates an inundated carpet and results in a smell due to the carpet soaking up this water.

Petitioner then proceeded to go through various work orders outlining and confirming the fact that he brought his vehicle in for repair. The first work order has to do with rough idling of the vehicle and indicates that the vehicle was serviced at the time (see Exhibit P-2). The next work order indicates that on November 12, 2001 the vehicle was brought in when it had 2,569 miles. This work order indicates that there are allegedly transmission problems, erratic stalling problems and, most significantly, front area water leak problem. This invoice indicates that the car was serviced and returned to petitioner.

Petitioner next testified that on January 8, 2002 he once again brought the vehicle in for repair when it had a total of 4,516 miles on it (see Exhibit P-4). This repair order indicates the vehicle was brought in for, among other things, water leaking on the front passenger floors. Among the other problems complained of was once again wet carpeting on the passenger side of the vehicle, an alleged water leak and paint issues.
Petitioner then testified with regard to another service that took place on February 8, 2002. The vehicle at this point in time had 5,218 miles (see Exhibit P-6). Once again, petitioner was complaining of smells from the carpeting on the passenger part of the car due to alleged water and other difficulties with the vehicle. The invoice seems to reflect that the vehicle was serviced and then returned.

Petitioner then testified to his last chance letter he sent to the manufacturer with regard to the variety of alleged defects (see Exhibit P-8). Petitioner testified with regard to continuing problems with the vehicle. Petitioner presented Exhibit P-9 which demonstrated the vehicle was brought back to the dealership on November 4, 2002 for the continual problem when it had 15,551 miles. On the second page of this invoice it indicates that the vehicle has been there three times and once again it appears the vehicle was serviced and returned to petitioner. Petitioner also testified to and brought into evidence Exhibit P-10 which shows that new carpeting was ordered for the vehicle in question as a result of what apparently was supposed to have been repaired, namely, the water leak in the front passenger portion of the vehicle itself.
Petitioner then emphasized that the water problem has never been fixed and to this date has not been fixed. n cross-examination, petitioner was examined with regard to the surging of the vehicle and the water problem and still maintained that all these problems were occurring to this date.

The next person to testify on behalf of petitioner was James Cookingham who was presented to the Court as an expert in automotive vehicle repair. No objections to this individual testifying as an expert was raised by respondent and he was admitted as an expert in automotive vehicle repair.

Mr. Cookingham testified that he examined the vehicle in question on or about January 3, 2003 and identified and presented to the Court his report with the results he found after examining the vehicle (see Exhibit P-12). Mr. Cookingham testified that he found the body and paint damage to be minimal and that he was not able to repeat nor could he confirm the alleged erratic idling of the vehicle or surging of the vehicle. Mr. Cookingham did testify, however, that he found and confirmed a significant amount of water in the right front passenger portion of the vehicle, that he believed there was a leak, that he believed the leak was not coming through the vehicle but rather was being caused by some kind of condensation or clogging problem with regard to the air conditioning system and that he believed this was the source of the problem in question.
Mr. Cookingham also testified that you could have a large amount of water caused by this condensation and that temperature was not necessarily a factor with regard to the workings of the air conditioner as it did operate during the winter when defrosters were in operation.

Respondent then put on its case. David Flisler testified on behalf of respondent. Mr. Flisler is District Manager with Daimler Chrysler and by stipulation it was agreed that he was considered to be an expert with regard to repair and servicing of this type of motor vehicle.

Mr. Flisler testified that he examined the vehicle on the date of the hearing and that he was unable to observe or cause to occur any engine surges or rough idling problems. Mr. Flisler did testify that he observed a large amount of water in the front passenger compartment, but that he found the water to be clean, that it was not stagnant, that it did not have an odor, and he did not believe that it occurred naturally. Mr. Flisler testified that in his opinion he believed that water had been externally placed there on this date and there was no way any leakage or even condensation from air conditioning system of the vehicle could have caused that large amount of water to be present. He stated that when he stepped on the carpeting in question the water that was squeezed out was clear and not discolored.

On cross-examination, Mr. Flisler reiterated his belief that a naturally occurring leak did not cause the problem in question but he could not explain all the various repair orders and treatment for the water problem that occurred at the various dealerships involved as they did not appear to spot anything other some kind of accidental occurrence of the water that was purported to be in the vehicle itself.

I found the petitioner’s witnesses’ testimony to be very credible. I fully believe Mr. Giglio’s testimony to be truthful, I found his expert’s testimony to be truthful and candid, and I found Ms. Giglio’s testimony with regard to the problems she had when she rode in the vehicle to be truthful as well. I found that all three of petitioner’s witnesses were entitled to tremendous credibility and I could not find any reason for disbelieving their testimony.

While I believed respondent’s witness’ testimony to be truthful, respondent’s witness was unable to back up his allegation that the water was put there by an outside source other than his opinion. He could not explain the previous treatments for the alleged water leaks which were presented on invoices by various, not only one, dealerships and, therefore, I was able to give very little weight to respondent’s expert’s testimony that he felt the water was placed there by an outside force. I did give tremendous credibility and weight to this expert’s testimony with regard to lack of any apparent problems with regard to the surging and minor impact of the paint defects.

Discussion

The New Jersey “Lemon Law” N.J.S.A. 56:12-29, et seq. provides relief for a consumer who purchases or leases a vehicle with a non-conformity which the dealer or manufacturer is unable to correct within the time frame set forth by the statute. A “non-conformity” is defined by N.J.S.A. 56:12-30 as a defect or condition which substantially impairs the use, value or safety of a motor vehicle.

The Lemon Law further obligates the manufacturer/dealer to make all required repairs once a consumer reports a non-conformity in the motor vehicle to said manufacturer/dealer during the first 18,000 miles of operation or during the period of two years subsequent to date of original delivery of the vehicle. N.J.S.A. 56:12-32 goes on to state that if said manufacturer/dealer is unable to repair or correct the non-conformity pertaining to said motor vehicle within a reasonable time frame, then the consumer is entitled to a refund as set forth in the statute.
The burden of establishing by a preponderance of the credible evidence that the alleged non-conformity in the vehicle is a defect or condition that substantially impairs the use, value or safety of the vehicle rests with the petitioner. See N.J.S.A. 56:12-30. It is clear that petitioner must prove same in order to succeed in a claim under the Lemon Law. See Anastasio v. Mitsubishi Motor Sales of America, Inc., OAL Docket CMA 2100-90 (April 23, 1990).

The mere statement by a petitioner that he was not happy with having to have brought this vehicle back seven times for problems with said vehicle is not necessarily sufficient to satisfy the Lemon Law. There must be additional objective factual findings and evaluations to bolster this particular feeling or opinion of the consumer that the vehicle falls within the Lemon Law statute and these claims must be factually demonstrated by the petitioner in a successful fashion. See Coppeto v. Acura Division of American Honda Motor Company, Inc., CMA 11149-98, Initial Decision (March 2, 1999), adopted by the Director (March 20, 1999).
Mr. Giglio’s testimony with regard to the water soaked nature of the front passenger compartment and the smell that he experienced there, together with his wife’s testimony confirming the smell and the testimony presented by their expert, Mr. Cookingham, and supporting documentation consisting of all the various repair invoices that they received from the dealer when the vehicle was brought back for this problem. I found Mr. Giglio’s and his wife’s testimony, together with the expert’s testimony, Mr. Cookingham, to be credible and I was convinced by a preponderance of the evidence presented by petitioner, his wife and his expert witness that the problem complained of in regard to the consistent water leakage in said vehicle still exists and to date has not been corrected. I found and gave very little credence to respondent’s expert’s explanation that it appears the water was externally placed in the vehicle, because other than that being respondent’s expert’s opinion, no corroborated proof was demonstrated, nothing was presented that would override consistent credible evidence presented by petitioner, his wife and their expert. Most convincing was the petitioner’s expert’s testimony coupled with all the various invoices which consistently show clearly a water problem in the front passenger portion of this vehicle, with the replacement of what appeared to have been soggy carpet and as was testified to clearly no resolution of the problem in question. As a result, I FIND that petitioner’s testimony, by a preponderance of the credible evidence, fully demonstrated the problem with regard to the water leakage and odors and mold that it creates at the front passenger portion of the vehicle still exist to this date, and that same has not been corrected in accordance with the parameters of the Lemon Law.
The testimony indicated that the vehicle was purchased, inclusive of finance charges, taxes and license fees, for a total of $27,208.05. Petitioner expended $50 in filing his Lemon Law Complaint. The mileage on the vehicle at the attempt of the first repair pertaining to the water problem was 4,150 miles. I am satisfied that these numbers relect the actual and correct figures regarding the vehicle in question.

Subsequent to the hearing, this Court received certificate of services from petitioner’s counsel, Howard A. Gutman, Esq. I have reviewed the certification of services which contains not only the time expended by the petitioner’s counsel but fees charged by the expert who made an appearance at the hearing as well, together with costs, and find the hourly amount charged together with the time expended on the file to be within normal parameters for a case of this type.

Therefore, in addition to the above-referenced figures, I FIND the petitioner’s counsel’s fees and expert’s costs totaling $2,821 conform with normal parameters for a case of this type and I FIND said counsel fees and expert’s costs on the detailed invoice dated April 9, 2003 to be acceptable.

Findings and Order

Based upon the above referenced factors and the testimony described above, I FIND that petitioner has demonstrated by a preponderance of the credible evidence that the vehicle in question has serious defects with regard to water leakage that consistently takes place in the front passenger compartment of the vehicle and that this affects the use, value or safety of the motor vehicle itself. I. I FIND that petitioner has given respondent every opportunity required under the Lemon Law to repair the defects complained of, that a last chance letter was forwarded to respondent in accordance with the Lemon Law and

I further FIND that the expectation of petitioner with regard to the use, operation and safety of the vehicle has not been met and has been seriously affected by the fact that respondent has failed to repair the defects complained of in an appropriate and timely fashion and indeed has failed to repair these defects at all. Further, as a result of the problems complained of by petitioner, I FIND that the value of the vehicle is more than likely to be severely affected and diminished as a result of anyone seeking to purchase said vehicle. I therefore CONCLUDE the vehicle in question is a lemon as defined by the Lemon Law statute and pursuant to N.J.S.A. 56:12-32A, the manufacturer shall be directed to give to the petitioner all remedies as set forth in said statute in terms of costs, expenses, fees, sales taxes, license and registration fees, and reasonable attorney’s fees and expert witness fees, minus an appropriate allowance for vehicle use as set forth in the statute.

The following monies are due as reimbursement to petitioner and so ORDERED that petitioner be reimbursed accordingly. The total purchase price of the vehicle involved is $27,208.05. Subtracted from this figure should be a total of $1,129.13, representing the total mileage of 4,150 miles at the time the water problem was first reported and brought into a servicing dealership divided by 100,000. Therefore, it is further ORDERED that respondent provide petitioner with a separate check in the amount of $2,821 to cover the cost of petitioner’s attorney’s fees, expert’s fees and costs. Adding this total to the $26,128.92, petitioner is entitled to total reimbursement of $28,949.92. This total should be paid either to petitioner or the appropriate portion paid to the entity that has financed the vehicle.
It is hereby ORDERED that respondent pay the petitioner the sum as calculated above and in the manner as set forth above.

(portions of the decision not relevant to the final outcome have been abridged).

January 19, 2018 0

State Filed Claims Against New Jersey Used Car Dealership

Frustrating Phone Conversation — I looked at the papers and it’s not what you told me.

Attorney General Christopher Porrino and the New Jersey Division of Consumer Affairs announced that the state is seeking restitution and civil penalties from a Newark used car dealer alleged to have violated the state Consumer Fraud Act and a number of state regulations concerning the sale of motor vehicles.

According to a Complaint filed in Superior Court, Essex County, the dealership located in Newark, New Jersey, allegedly engaged in a host of “unconscionable and deceptive business practices,” including “bait and switch” schemes where the business advertised vehicles at low prices and then refused to sell the cars at the advertised prices.

The complaint details claims alleging violations of the Consumer Fraud Act, the Regulations Governing Motor Vehicle Advertising Practices, the Regulations Governing Automotive Sales Practices, the Used Car Lemon Law and/or the Used Car Lemon Law Regulations. The complaint alleges the dealership:

misrepresented the price of used motor vehicles, failed to include required statements about consumer costs, failed to include the actual odometer reading of motor vehicles in advertisements and failed to disclose prior damage to a vehicle that required substantial repair and body work.

People who purchased a defective used car may be entitled to compensation or other recourse. Call us at the Law Office of Howard Gutman, (973) 598-1980, for a free consultation on your New Jersey used car claim.

Man in home office on telephone using computer smiling

January 10, 2018 0

New Jersey Lemon Law Decision: Barte v. Kia

car-1751750_960_720

Description of Case: The consumer experienced problems with stalling and the manufacturer disputed the claim arguing that a problem had not been shown. After a trial, the consumer won and a full repurchase was ordered.

STATE OF NEW JERSEY
OFFICE OF ADMINISTRATIVE LAW
INITIAL DECISION
OAL DKT. NO. CMA07702-00
DARWIN and MARIA BARTE,
Petitioner,
v.
KIA MOTORS OF AMERICA, INC.,
Respondent.
___________________________________
Howard Gutman, Esq., for petitioners
Brian McLvaine, Esq., for respondent
(Cabaniss, Conroy & McDonald, LLP)
Record Closed: December 17, 2000 Decided: December 26, 2000
BEFORE R. JACKSON DWYER, ALJ:
STATEMENT OF THE CASE AND PROCEDURAL HISTORY

Petitioners, Darwin and Marie Barte, on February 6, 1999 accepted delivery of a purchased 1998 Kia Sportage, veRespondent, Kia Motors of America, Inc.,
seeks to dismiss petitioners’ complaint based on its affirmative defense that petitioners’ vehicle does not stall when it comes to a stop or if it does the complaint does not rise to the level of a substantial nonconformity.

This matter was transmitted to the Office of Administrative Law (OAL) from the Division of Consumer Affairs on August 29, 2000 for hearing pursuant to the Lemon Law, N.J.S.A. 56:13-39 to -49. A hearing was held on December 6, 2000, at the Office of Administrative Law, 185 Washington Street, Newark, New Jersey. The administrative law judge (ALJ) closed the record on December 17, 2000 after he received counsel’s affidavit of services.

It was stipulated that James Cookingham is an expert in automobile repair and diagnosis. Cookingham testified that he inspected petitioners’ 1998 Kia Sportage on September 27, 2000 at petitioners’ home in Jersey City. After Cookingham checked the vehicle’s statistics, he noticed that the malfunction indicator-check engine light remained on. Cookingham heard a knocking noise coming from the motor lasting about five minutes.
Cookingham used his snap on diagnostic hand scanner to retrieve codes that were logged in the vehicle’s computer. Cookingham stated that, if a check engine light is on, it means there is a parameter or parameters detected by the on board diagnostic system that has gone outside (its) design limits.

Cookingham opined that if a check engine light remains on, it will affect the vehicle’s value because it indicates to a purchaser that a repair is needed. A code from a check engine light gives a mechanic only a clue what is wrong with the vehicle. Cookingham stated that his snap on diagnostic tool is designed to abstract on board codes, and he retrieved code P0101 which indicated that the fuel system was getting too much or too little air. That problem could cause petitioners’ vehicle to stall. Moreover, the on board freeze frame turned on at 1394
rpms at a speed of 22 miles, a coolant temperature of 194 degrees Fahrenheit and an engine load percentage of 4.7. Cookingham stated that petitioners’ complaint was consistent with his finding that the check engine light was on and with the code that his snap on tool retrieved when he inspected the vehicle.

Analysis and Conclusions of Law

N.J.S.A. 56:12-31 obligates manufacturers and dealers to make all necessary repairs if a consumer reports a nonconformity to the manufacturer or its dealer during the first 18,000 miles of operation or during the period of two years following the date of original delivery[.]. The statute defines nonconformity to mean a defect or condition which substantially impairs the use, value or safety of a motor vehicle. N.J.S.A. 56:12-
30. In a commercial context, substantial impairment of the value of an automobile is broadly construed to apply to a nonconformity which shakes the buyer’s confidence in the goods. GMAC v. Jankowitz, 216 N.J. Super. 313, 339 (App. Div. 1987). Once the purchasers’ faith has been shaken, the vehicle loses not only its real value in their eyes, but becomes an instrument whose integrity is substantially impaired and whose operation is fraught with apprehension. Zabriskie Chevrolet, at 458.

I CONCLUDE that the stalling and loss of power is a nonconformity which substantially impairs the use, safety or value of petitioners’ vehicle. It is obvious that a vehicle which stalls suddenly, either coming to a stop or in the middle of traffic, poses a threat to the safety of its occupants as well as other drivers on the highway.

It is ORDERED that Kia Motors of America, Inc. reimburse petitioners in the total amount the parties stipulated in the Lemon Law refund computation (J-2), namely $27,093.95.
It is FURTHER ORDERED that petitioners’ counsel be awarded a fee of $2,793.00 for 15.1 hours of work work at the rate of $185 per hour.

CALL (973) 598-1980 FOR A Free Consultation on your Lemon Law Claim

December 31, 2017 0

New Jersey Used Car Lemon Law Statute and Regulations

The New Jersey Used Car lemon law protects used car purchasers. Many of the regulations can help in court proceedings. Many times claims involving the lemon law will be combined with those involving used car fraud.

New Jersey Used Car Lemon Law Statute and Regulations

56:8-67. Definitions relative to sale and warranty of certain used vehicles

As used in this act:

“As is” means a used motor vehicle sold by a dealer to a consumer without any warranty, either express or implied, and with the consumer being solely responsible for the cost of any repairs to that motor vehicle.

“Consumer” means the purchaser or prospective purchaser, other than for the purpose of resale, of a used motor vehicle normally used for personal, family or household purposes.

“Covered item” means and includes the following components of a used motor vehicle: Engine – all internal lubricated parts, timing chains, gears and cover, timing belt, pulleys and cover, oil pump and gears, water pump, valve covers, oil pan, manifolds, flywheel, harmonic balancer, engine mounts, seals and gaskets, and turbo-charger housing; however, housing, engine block and cylinder heads are covered items only if damaged by the failure of an internal lubricated part. Transmission Automatic/Transfer Case – all internal lubricated parts, torque converter, vacuum modulator, transmission mounts, seals and gaskets. Transmission Manual/Transfer Case – all internal lubricated parts, transmission mounts, seals and gaskets, but excluding a manual clutch, pressure plate, throw-out bearings, clutch master or slave cylinders. Front-Wheel Drive – all internal lubricated parts, axle shafts, constant velocity joints, front hub bearings, seals and gaskets, Rear-Wheel Drive – all internal lubricated parts, propeller shafts, supports and U-joints, axle shafts and bearings, seals and gaskets.

“Dealer” means any person or business which sells or offers for sale a used motor vehicle after selling or offering for sale three or more used motor vehicles in the previous 12-month period.

“Deduction for personal use” means the mileage allowance set by the federal Internal Revenue Service for business usage of a motor vehicle in effect on the date a used motor vehicle is repurchased by a dealer in accordance with section 5 of this act, multiplied by the total number of miles a used motor vehicle is driven by a consumer from the date of purchase of that vehicle until the time of its repurchase.

“Director” means the Director of the Division of Consumer Affairs in the Department of Law and Public Safety.

“Excessive wear and tear” means wear or damage to a used motor vehicle beyond that expected to be incurred in normal circumstances.

“Material defect” means a malfunction of a used motor vehicle, subject to a warranty, which substantially impairs its use, value or safety.

“Repair insurance” means a contract in writing to refund, repair, replace, maintain or take other action with respect to a used motor vehicle for any period of time or any specified mileage and provided at an extra charge beyond the price of the used motor vehicle.

“Service contract” means a contract in writing to refund, repair, replace, maintain or take other action with respect to a used motor vehicle for any period of time or any specific mileage or provided at an extra charge beyond the price of the used motor vehicle.

“Used motor vehicle” means a passenger motor vehicle, excluding motorcycles, motor homes and off-road vehicles, title to, or possession of which has been transferred from the person who first acquired it from the manufacturer or dealer, and so used as to become what is commonly known as “secondhand,” within the ordinary meaning thereof but does not mean a passenger motor vehicle, subject to a motor vehicle lease agreement which was in effect for more than 90 days , which is sold by the lessor to the lessee, or to a family member or employee of the lessee upon the termination of the lease agreement.

“Warranty” means any undertaking, in writing and in connection with the sale by a dealer of a used motor vehicle, to refund, repair, replace, maintain or take other action with respect to the used motor vehicle, and which is provided at no extra charge beyond the price of the used motor vehicle.

56:8-67.1 Sale of used passenger motor vehicle, upon termination of lease agreement

A lessor who is a dealer and who sells or offers for sale a used passenger motor vehicle, subject to a motor vehicle lease agreement which was in effect for more than 90 days, to a consumer who is not the lessee, or a family member or employee of the lessee upon the termination of the lease agreement, shall be subject to the provisions of P.L.1995, c.373 (C.56:8-67 et seq.) including the bonding requirement of section 11 of that act (C.56:8-77).

56:8-68.Unlawful practices

It shall be an unlawful practice for a dealer:

To misrepresent the mechanical condition of a used motor vehicle;b. To fail to disclose, prior to sale, any material defect in the mechanical condition of the used motor vehicle which is known to the dealer;

To represent that a used motor vehicle, or any component thereof, is free from material defects in mechanical condition at the time of sale, unless the dealer has a reasonable basis for this representation at the time it is made;

To fail to disclose, prior to sale, the existence and terms of any written warranty, service contract or repair insurance currently in effect on a used motor vehicle provided by a person other than the dealer, and subject to transfer to a consumer, if known to the dealer;

To misrepresent the terms of any written warranty, service contract or repair insurance currently in effect on a used motor vehicle provided by a person other than the dealer, and subject to transfer to a consumer;

To fail to disclose, prior to sale, the existence and terms of any written warranty, service contract or repair insurance offered by the dealer in connection with the sale of a used motor vehicle;

To misrepresent the terms of any warranty, service contract or repair insurance offered by the dealer in connection with the sale of a used motor vehicle;

To represent, prior to sale, that a used motor vehicle is sold with a warranty, service contract or repair insurance when the vehicle is sold without any warranty, service contract or repair insurance;

To fail to disclose, prior to sale, that a used motor vehicle is sold without any warranty, service contract, or repair insurance; and

To fail to provide a clear written explanation, prior to sale, of what is meant by the term “as is,” if the used motor vehicle is sold “as is.”

L.1995,c.373,s.2.

56:8-69.Written warranty required; minimum durations

It shall be an unlawful practice for a dealer to sell a used motor vehicle to a consumer without giving the consumer a written warranty which shall at least have the following minimum durations:

If the used motor vehicle has 24,000 miles or less, the warranty shall be, at a minimum, 90 days or 3,000 miles, whichever comes first;b. If the used motor vehicle has more than 24,000 miles but less than 60,000 miles, the warranty shall be, at a minimum, 60 days or 2,000 miles, whichever comes first; or

If the used motor vehicle has 60,000 miles or more, the warranty shall be, at a minimum, 30 days or 1,000 miles, whichever comes first, except that a consumer may waive his right to a warranty as provided under section 7 of this act.

56:8-70.Written warranty; requirements of dealer

The written warranty shall require the dealer, upon failure or malfunction of a covered item during the term of the warranty, to correct the malfunction or defect, provided the used motor vehicle is delivered to the dealer, at his regular place of business, and subject to a deductible amount of $50 to be paid by the consumer for each repair of a covered item. This written warranty shall exclude repairs covered by any manufacturer’s warranty, or recall program, as well as repairs of a covered item required because of collision, abuse, or the consumer’s failure to properly maintain such used motor vehicle in accordance with the manufacturer’s recommended maintenance schedule, or from damage of a covered item caused as a result of any commercial use of the used motor vehicle, or operation of such vehicle without proper lubrication or coolant, or as a result of any misuse, negligence or alteration of such vehicle by someone other than the dealer.

56:8-71.Dealer’s failure to correct defect

a. If, within the periods specified in section 3 of this act, the dealer or his agent fails to correct a material defect of the used motor vehicle, after a reasonable opportunity to repair the used motor vehicle, the dealer shall repurchase the used motor vehicle and refund to the consumer the full purchase price, excluding all sales taxes, title and registration fees, or any similar governmental charges, and less a reasonable allowance for excessive wear and tear and less a deduction for personal use of such vehicle. Refunds shall be made to the consumer and lienholder, if any, as their interests appear on the records of ownership kept by the Director of the Division of Motor Vehicles.

It shall be an affirmative defense to any claim under this section that:

(1)The alleged material defect does not substantially impair the use, value or safety of the used motor vehicle; or(2)The material defect is the result of abuse, neglect or unauthorized modification or alteration of the used motor vehicle by anyone other than the dealer or his agent.

It shall be presumed that a dealer has a reasonable opportunity to correct or repair a material defect in a used motor vehicle, if:

(1)The same material defect has been subject to repair three or more times by the dealer or his agent within the warranty period, but the material defect continues to exist; or(2)The used motor vehicle is out of service by reason of waiting for the dealer to begin or complete repair of the material defect for a cumulative total of 20 or more days during the warranty period.

56:8-72.Term of warranty extended for repairs

The term of any written warranty offered by a dealer in connection with the sale of a used motor vehicle shall be extended by any time period during which the used motor vehicle is waiting for the dealer or his agent to begin or complete repairs of a material defect of the used motor vehicle.

56:8-73.Waiver of dealer’s obligation to provide warranty

Notwithstanding any provision of this act to the contrary, a consumer, as a result of a price negotiation for the purchase of a used motor vehicle with over 60,000 miles, may elect to waive the dealer’s obligation to provide a warranty on the used motor vehicle. The waiver shall be in writing and separately stated in the agreement of retail sale or in an attachment thereto and separately signed by the consumer. The waiver shall state the dealer’s obligation to provide a warranty on used motor vehicles offered for sale, as set forth in sections 3 and 4 of this act. The waiver shall indicate that the consumer, having negotiated the purchase price of the used motor vehicle and obtained a price adjustment, is electing to waive the dealer’s obligation to provide a warranty on the used motor vehicle and is buying the used motor vehicle “as is.”

56:8-74.Warranty given as a matter of law

If a dealer fails to give a written warranty required by this act, the dealer nevertheless shall be deemed to have given the warranty as a matter of law, unless a waiver has been signed by the consumer in accordance with section 7 of this act.

56:8-75.Remedies, rights preserved

Nothing in this act shall in any way limit the rights or remedies which are otherwise available to a consumer under any other law.

56:8-76.Nonapplicability of act

The provisions of sections 3, 4, and 5 shall not apply to: any used motor vehicle sold for less than $3,000; any used motor vehicle over seven or more model years old; any used motor vehicle which has been declared a total loss by an insurance company and 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 by an insurance company; or, any used motor vehicle with more than 100,000 miles.

56:8-77.Bond to assure compliance

To assure compliance with the requirements of this act, a dealer shall provide a bond in favor of the State of New Jersey in the amount of $10,000, executed by a surety company authorized to transact business in the State of New Jersey by the Department of Insurance and to be conditioned on the faithful performance of the provisions of this act. This bond shall be for the term of 12 months and shall be renewed at each expiration for a similar period. The Director of the Division of Motor Vehicles shall not issue a dealer’s license and shall not renew a license of any dealer who has not furnished proof of the existence of the bond required by this act.

56:8-78.Rules, regulations

The Director shall adopt rules and regulations pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.) to effectuate the purposes of this act.

56:8-79.Consumer awareness program required

The director shall implement a consumer awareness program which shall advise consumers of the requirements, protections and benefits provided by this act, within 120 days following enactment of this act.

56:8-80.Administrative fee established

The director may establish an administrative fee, to be paid by the consumer, in order to implement the provisions of this act, which fee shall be fixed at a level not to exceed the cost for the administration and enforcement of this act.

13:45A-26F.1 Purpose and scope

(a) The purpose of this subchapter is to implement N.J.S.A. 56:8-67 et seq., commonly known as the Used Car Lemon Law. The subchapter specifies which used motor vehicles are subject to the Act; the purchaser’s as well as the dealer’s obligations under the Act; the warranties which the dealer must provide; the conditions which must be met before a purchaser may waive a warranty; and the dealer’s bonding and reporting requirements. In addition, the subchapter establishes a dispute resolution program within the Division of Consumer Affairs in conjunction with the Office of Administrative Law.

(b) This subchapter applies to:

Dealers (as defined in N.J.A.C. 13:45A-26F.2), who sell used motor vehicles in the State of New Jersey; and
All consumers (as defined in N.J.A.C. 13:45A-26F.2), of used motor vehicles in the State of New Jersey.

13:45A-26F.2 Definitions

As used in this subchapter, the following words shall have the following meanings:

“Consumer” means the purchaser or prospective purchaser, other than for the purpose of resale, of a used motor vehicle normally used for personal, family or household purposes.

“Covered item” means and includes the following components of a used motor vehicle: Engine–all internal lubricated parts, timing chains, gears and cover, timing belt, pulleys and cover, oil pump and gears, water pump, valve covers, oil pan, manifolds, flywheel, harmonic balancer, engine mounts, seals and gaskets, and turbo-charger housing; however, housing, engine block and cylinder heads are covered items only if damaged by the failure of an internal lubricated part. Transmission Automatic/Transfer Case–all internal lubricated parts, torque converter, vacuum modulator, transmission mounts, seals and gaskets. Transmission Manual/Transfer Case–all internal lubricated parts, transmission mounts, seals and gaskets, but excluding a manual clutch, pressure plate, throw-out bearings, clutch master or slave cylinders. Front-Wheel Drive–all internal lubricated parts, axle shafts, constant velocity joints, front hub bearings, seals and gaskets. Rear-Wheel Drive–all internal lubricated parts, propeller shafts, supports and U-joints, axle shafts and bearings, seals and gaskets.

“Dealer” means any person or business which sells, or offers for sale, a used motor vehicle after selling or offering for sale three or more used motor vehicles in the previous 12-month period.

“Deduction for personal use” means the mileage allowance set by the Federal Internal Revenue Service for business usage of a motor vehicle in effect on the date a used motor vehicle is repurchased by a dealer in accordance with N.J.S.A. 56:8-71, multiplied by the total number of miles a used motor vehicle is driven by a consumer from the date of purchase of that vehicle until the time of its repurchase.

“Director” means the Director of Consumer Affairs in the Department of Law and Public Safety.

“Excessive wear and tear” means wear or damage to a used motor vehicle beyond that expected to be incurred in normalcircumstances.

“Material defect” means a malfunction of a used motor vehicle, subject to a warranty, which substantially impairs its use, value or safety.

“Model year” means the calendar year beginning January 1 and ending December 31 of the year listed on the motor vehicle’s title or certificate of ownership and vehicle identification number.

“Sale” means the transfer of title of a used motor vehicle from the owner- seller to the purchaser-consumer and does not include those transactions in which the owner-seller has obtained title to, or is granted the right to sell, a used motor vehicle by operation of law (for example, pursuant to N.J.S.A. 2C:64-7 or 54:49-13a), or in which the seller is a public entity or governmental unit.

“Used motor vehicle” means a passenger motor vehicle, excluding motorcycles, motor homes and off-road vehicles, title to, or possession of which has been transferred from the person who first acquired it from the manufacturer or dealer, and so used as to become what is commonly known as “secondhand,” within the ordinary meaning thereof but does not mean a passenger motor vehicle, subject to a motor vehicle lease agreement which was in effect for more than 90 days, which is sold by the lessor to the lessee, or to a family member or employee of the lessee upon the termination of the lease agreement.

13:45A-26F.3 Dealer warranty; form; scope; purchaser’s obligations

(a) Upon the sale of a used motor vehicle in the State of New Jersey, the dealer shall furnish the consumer with a written warranty which meets the requirements of (c) below, unless:

The purchase price of the used motor vehicle is less than $3,000;
The used motor vehicle is eight or more model years old;

The used motor vehicle has been declared a total loss by an insurance company and the consumer has been notified in writing of that fact at, or prior to, sale;

The used motor vehicle has more than 60,000 miles and the consumer elects to waive the warranty in writing pursuant to N.J.A.C. 13:45A-26F.4; or

The used motor vehicle has more than 100,000 miles.

(b) The written warranty shall be in the same format, and contain all of the information in, the “Used Motor Vehicle Limited Warranty” form which is appended hereto as Appendix A, incorporated herein by reference, and have at least the following minimum durations:

If the used motor vehicle has 24,000 miles or less, the warranty shall be, at a minimum, 90 days or 3,000 miles, whichever comes first;
If the used motor vehicle has more than 24,000 miles but less than 60,000 miles, the warranty shall be, at a minimum, 60 days or 2,000 miles, whichever comes first; or

If the used motor vehicle has 60,000 miles or more, the warranty shall be, at a minimum, 30 days or 1,000 miles, whichever comes first, unless the consumer elects to waive this warranty pursuant to the terms of N.J.A.C. 13:45A-26F.4.

(c) The written warranty shall require the dealer, during the term of the warranty, to correct the failure or malfunction of a covered item as defined in N.J.A.C. 13:45A-26F.2, provided the used motor vehicle is delivered to the dealer, at the dealer’s regular place of business and subject to a deductible amount of $50.00 to be paid by the consumer for each repair of a covered item. This written warranty shall exclude repairs covered by any manufacturer’s warranty or recall program, as well as repairs of a covered item required because of collision, abuse, or the consumer’s failure to properly maintain such used motor vehicle in accordance with the manufacturer’s recommended maintenance schedule, or from damage of a covered item caused as a result of any commercial use of the used motor vehicle, or operation of such vehicle without proper lubrication or coolant, or as a result of any misuse, negligence or alteration of such vehicle by someone other than the dealer.

(d) The warranty periods in (b) above shall be extended by any time period during which the used motor vehicle is waiting for the dealer or his agent to begin or complete repairs of a material defect of the used motor vehicle.

(e) If the dealer fails to provide the consumer with a written warranty required by N.J.S.A. 56:8-69, the dealer nevertheless shall be deemed to have given the warranty as a matter of law, unless a waiver has been signed by the consumer in accordance with N.J.S.A. 56:8-73 and N.J.A.C. 13:45A- 26F.4.

13:45A-26F.4 Waiver of warranty

(a) A consumer, as a result of a price negotiation for the purchase of a used motor vehicle with over 60,000 miles, may elect to waive the dealer’s obligation to provide a warranty on the used motor vehicle provided that:

The waiver is in writing;
The waiver shall be in the same format and contain all of the information in the “‘As Is’ Disclosure” form and the “Waiver of New Jersey Used Motor Vehicle Limited Warranty” form which are appended hereto as Appendices B and C, respectively, incorporated herein by reference; and

The waiver and disclosure forms are signed separate and apart from the contract of sale.

13:45A-26F.5 Bond requirement

To assure compliance with the requirements of N.J.S.A. 56:8-77 et seq., a dealer shall provide a bond in favor of the State of New Jersey in the amount of $10,000, executed by a surety company authorized to transact business in the State of New Jersey by the Department of Banking and Insurance and to be conditioned on the faithful performance of the provisions of N.J.S.A. 56:8- 77 et seq. This bond shall be for the term of 12 months and shall be renewed at each expiration for a similar period. The Director of the Division of Motor Vehicles shall not issue a dealer’s license and shall not renew a license of any dealer who has not furnished proof of the existence of such bond.

13:45A-26F.6 Administrative fee

(a) At the time of sale a dealer shall collect an administrative fee of $0.50 from each consumer who purchases a used motor vehicle in the State of New Jersey which transaction is subject to the Act and this subchapter, including a consumer who elects to waive the warranty pursuant to N.J.A.C. 13:45A-26F.4.

(b) On the 15th of every January, April, July and October, a dealer shall mail to the Used Car Lemon Law Unit, the following:

A check or money order made payable to the “New Jersey Division of Consumer Affairs,” in an amount equal to the total sum of administrative fees collected during the preceding three-month period; and
Documentation of each used motor vehicle subject to the Act and this subchapter which was sold by the dealer during the preceding three-month period.

13:45A-26F.7 Procedures regarding repair of material defect

(a) When a consumer believes that a used motor vehicle does not conform to an applicable warranty the consumer shall:

Notify the dealer of a material defect; and
Make the used motor vehicle available for repair by delivering the motor vehicle to the dealer at the dealer’s regular place of business before the appropriate warranty period expires.

(b) If, within the terms of the warranty applicable to the used motor vehicle, the same material defect has been subject to repair three or more times by the dealer or the dealer’s agent and the material defect continues to exist, or the used motor vehicle has been out of service a cumulative total of 20 or more days during the warranty period because the dealer has yet to begin or complete repair of the material defect, and the dealer fails to refund the full purchase price of the used motor vehicle excluding all sales taxes, title and registration fees, or any similar governmental charges and less a reasonable allowance for excessive wear and tear and less a deduction for personal use of the motor vehicle, then the consumer may seek resolution:

Through the Division of Consumer Affairs dispute resolution program in conjunction with the Office of Administrative Law;
Through the Division of Consumer Affairs alternative dispute resolution procedure in which both parties agree to participate in informal settlement discussions with an independent third party who works to assist the participants in reaching a mutually satisfactory settlement;

By filing an action in the Superior Court of New Jersey. Any party to an action asserting a claim, counterclaim or defense based upon violations of the Used Car Lemon Law shall mail a copy of the initial or responsive pleading containing the claim, counterclaim or defense to the Director and to the Used Car Lemon Law Unit within 10 days after filing the pleading with the court;

Through the dealer’s informal dispute resolution procedures pursuant to N.J.A.C. 13:45A-26F.16, if available.

(c) A consumer who selects options (b)2 or 4 above and who fails to achieve a satisfactory result may seek resolution from among the remaining options.

13:45A-26F.8 Used Car Lemon Law Unit; duties; address

(a) There is established within the Division of Consumer Affairs a section which shall process Used Car Lemon Law matters, to be known as the Used Car Lemon Law (UCLL) Unit which shall:

Upon request, provide consumers with a brochure setting forth:

Information regarding a consumer’s rights and remedies under the relevant law; and
The procedures to be followed in order to participate in the various dispute resolution systems;

Review and process applications received for dispute resolution;
Compile a roster of motor vehicle dealers who sell used motor vehicles in New Jersey; and

Perform such other duties as the Director may from time to time assign.

(b) All correspondence to the Division of Consumer Affairs regarding Used Car Lemon Law matters shall be directed to the attention of the UCLL Unit as follows:

Division of Consumer Affairs

Used Car Lemon Law Unit

PO Box 45026

124 Halsey Street

Newark, New Jersey 07101-5026

13:45A-26F.9 Procedures for resolving a complaint

(a) To be eligible to have a dispute resolved in one of the forums set forth in N.J.A.C. 13:45A-26F.7, a consumer shall provide the following items to the UCLL Unit by certified mail, return receipt requested:

A completed application for dispute resolution (see N.J.A.C. 13:45A- 26F.10) which can be obtained form the UCLL Unit or the dealer; and
Photocopies of all relevant supporting documentation.

13:45A-26F.10 Application for dispute resolution

(a) The application for dispute resolution shall contain the following:

The name, address and telephone number of the consumer and lien-holder, if any;
The date the used motor vehicle was purchased by the consumer from the dealer;

The number of miles the motor vehicle had been driven prior to the date of purchase;

A written account of the events resulting in the dispute, including description(s) of the claimed material defect(s) and a chronology of the repair attempts;

A photocopy of proof of payment of the $50.00 deductible by the consumer to the dealer for each repair of a covered item required by N.J.S.A. 56:8- 70;

Photocopies of the statements of repair given to the consumer by the dealer or the dealer’s agent, each time the used motor vehicle was examined or repaired; and

Photocopies of the agreement of sale, the written warranty and any other documents related to the dispute.

(b) The application shall also contain a statement to the effect:

That the consumer believes that the used motor vehicle’s use, value, or safety is substantially impaired by the defect(s)complained of;
That the material defect(s) complained of is(are) not the result of abuse, neglect or unauthorized modification or alteration of the used motor vehicle by anyone other than the dealer or its agent;

That within the applicable warranty period:

The consumer gave the dealer or its agent at least three opportunities to repair the material defect, and the material defect continues to exist; or
The used motor vehicle has been out of service by reason of waiting for the dealer to begin or complete repair of the defective covered item for a cumulative total of 20 or more days since the date of purchase of the used motor vehicle by the consumer, and the material defect continues to exist; and

Whether the consumer wishes to participate in:

The Division of Consumer Affairs’ UCLL dispute resolution program in conjunction with the Office of Administrative Law; or
The Division of Consumer Affairs’ alternative dispute resolution procedure.

13:45A-26F.11 Processing of applications

(a) An application which has been submitted shall be reviewed by the UCLL Unit for completeness and compliance with the Used Car Lemon Law and this subchapter.

An incomplete application shall be returned to the consumer for completion.
An application which does not comply with this subchapter and the Used Car Lemon Law shall be rejected and the UCLL Unit shall notify the consumer of the reason for the rejection without making any determination as to whether the claimed defect is substantiated by the evidence or whether the defect substantially impairs the use, value or safety of the used motor vehicle.

An application which is accepted shall be date stamped to indicate acceptance and shall be directed to the Division’s UCLL program or the Division’s alternate dispute resolution procedure.

13:45A-26F.12 Notification of scheduling of hearings

(a) By February 11, 1999, used motor vehicle dealers in New Jersey shall forward to the Division of Consumer Affairs, UCLL Unit, the name, address, telephone and telefax number of the person designated by the dealer to receive notices under the dispute resolution process. It shall be the duty of the dealer to update this information, as necessary.

(b) Upon acceptance of an application, the UCLL Unit shall send a notice by certified mail, return receipt requested, to the consumer and the dealer’s designee.

(c) The UCLL Unit shall promptly thereafter refer an accepted application for dispute resolution to the Office of Administrative Law (OAL) or the Division’s alternative dispute resolution procedure. The matter shall be conducted as a contested case by the OAL in accordance with the Administrative Procedure Act, N.J.S.A. 52:14B-1 et seq., the Uniform Administrative Procedure Rules, N.J.A.C. 1:1.

(d) Notice of the date, time and location of the hearing shall be mailed by OAL to both parties.

(e) Simultaneously with the notice of acceptance of the application, the UCLL Unit shall send a copy of the application materials to the dealer or the dealer’s designee. Within 10 days of receipt of the notice of acceptance of the consumer’s application for dispute resolution, the dealer shall mail by certified mail, return receipt requested, to the consumer at his or her address and to the Clerk of the Office of Administrative Law at 185 Washington Street, Newark, New Jersey 07102, a response to each of the statements set forth in the consumer application. The response shall also state whether the dealer objects to a proceeding on the papers if requested by the consumer.

(f) Applications for adjournments or rescheduling of the hearing shall be made in accordance with N.J.A.C. 1:1-9.6.

13:45A-26F.13 Final decision

(a) The Director shall mail notification of the rejected, modified or adopted decision to both parties, the lien-holder, if any,and the OAL.

(b) In instances in which the matter is resolved in favor of the consumer, the dealer shall advise the Director as to its compliance with the final decision no later than 10 days following the date stated for completion of all awarded remedies.

13:45A-26F.14 Computation of refund

(a) The refund claimed by a consumer pursuant to N.J.S.A. 56:8-71 of the Used Car Lemon Law, whether through a dealer’s informaldispute resolution process, the Division’s alternate dispute resolution procedure or the Division’s UCLL dispute resolution program, shall include:

The total purchase price of the used motor vehicle excluding:

All sale taxes;
Title and registration fees or any similar governmental charges;

iii. A reasonable allowance for excessive wear and tear if any; and

A deduction for personal use (as that term is defined at N.J.A.C. 13:45A-26F.2) of the used motor vehicle by the consumer.

13:45A-26F.15 Appeals

A dealer or consumer may appeal a final decision to the Appellate Division of the Superior Court no later than 45 days after the date of the final decision. A copy of the notice of appeal must also be filed with the Director.

13:45A-26F.16 Dealer’s informal dispute resolution procedures

(a) Dealers who establish or participate in an informal dispute settlement procedure shall by March 3, 1999:

Advise the UCLL Unit of the existence of its informal dispute resolution procedure; and
Send the UCLL Unit an outline of the steps that a consumer must take in order to participate in the dealer’s informal dispute resolution procedure; the information shall include all necessary addresses and phone numbers.

13:45A-26F.17 Index of disputes

(a) The Division of Consumer Affairs shall maintain an index of all used motor vehicle disputes by make, model, dealer and such other information as the Director requires, and shall compile and maintain statistics indicating the record of dealer compliance with any judgments or settlements.

(b) The index and statistical record of compliance shall be made available to the public on February 1, 2000 and every six months thereafter.

13:45A-26F.18 Violations

Without limiting the prosecution of any other practices which may be unlawful under the Consumer Fraud Act, N.J.S.A. 56:8-1 et seq., any violation of the provisions of this subchapter shall be subject to the sanctions contained in the Consumer Fraud Act.

May 31, 2015 0

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