Laws Protecting Consumers in Use Car Cases

 

 

 

businessman signing a contract

 businessman signing a contract

Here is an overview of the laws that protect consumers in used car sales.   New Jersey and New York have used car lemon laws, but they have certain limitations.  There are mileage limitations and the New Jersey used car lemon law does not provide for attorneys fee to the plaintiff.  While the New Jersey new car lemon law provides for a mileage offset from date of first repair, the used car lemon law deduction encompasses the entire  Besides the lemon law, other laws can protect the consumer.

If the dealer fails to honor the warranty, the consumer may file a claim for breach of warranty.  If the vehicle was misrepresented, claims for consumer fraud are possible.  The used car lemon law allows the consumer to file in the lemon law unit or in court.  Since the lemon law unit handles only lemon law claims, it is usually preferable to file a used car lemon law claims with other claims in court.   Other laws such as the consumer fraud act or the Magnuson-Moss Act provide for counsel fees.   We excerpt the New Jersey used car lemon law below.          

I. NEW JERSEY USED CAR LEMON LAW STATUTE

The New Jersey Used Car Lemon law requires certain minimum warranties and prohibits some common deceptive practices.

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:

a. 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
c. 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.

C. Disclosure of Body Damage

Broken car

N.J.A.C. 13:45A-26A.7 entitled unlawful advertising practices makes unlawful:

“The failure to disclose that the motor vehicle had been previously damages and that substantial repair  or body work had been performed on it when such prior repair or body work is know or should have been known by the advertiser; for the purposes of this subsection, “substantial repair or body work” shall mean repair or body work having a retail value of $1,000 or more.”;

It is unclear whether the regulation applies to unadvertised vehicles. Cases in other states have dealt with failure to disclose body damage, though we see no New Jersey case on this issue.

D. Other Prohibited Advertising Practices.

1. The use of any type, size, location, lighting, illustration, graphic depiction or color so as to obscure or make misleading any material fact.

2. The setting forth of an advertised price which has been calculated by deducting a down payment, trade-in allowance, or any deductions other than a manufacturer’s rebate….

5. The failure to state the applicable time period of any special offer, in at least 10-point type immediately adjacent tot he special offer, unless the special offer is a manufacturer’s program.

13 The use of such terms or phrases as lowest prices, lower prices than anyone else or our lowest prices of the year or similar terms or phrases if such claim cannot be substantiated by the advertiser.

II. FEDERAL ODOMETER LAW 

The federal odometer statute states, “A person transferring ownership of a motor vehicle shall give the (buyer) the following written disclosure:

a) Disclosure of the cumulative mileage registered on the vehicle, or
b) disclosure that the mileage is unknown.  49 U.S.C. 32705

Federal regulations dictate a specific form and a certification.  Some auction houses do not provide an odometer statement or do not provide the odometer certification as the federal regulations require.  Note that when confronted with any discrepancies, these facilities almost always deny liability.  

III. FEDERAL WINDOW STICKER RULE

Federal law requires a window sticker indicating whether the car is sold as is or with a warranty.  16 Code Federal Regulations (CFR) 455 tells a dealer:

A) “Before you offer a used vehicle for sale to a consumer, you must prepare, fill in as applicable and display on that vehicle a “Buyers Guide” as required by this Rule. (1) The Buyers Guide shall be displayed prominently and conspicuously in any location on a vehicle and in such a fashion that both sides are readily readable…  (2) The capitalization, punctuation and wording of all items, headings, and text on the form must be exactly as required by this Rule. The entire form must be printed in 100% black ink on a white stock no smaller than 11 inches high by 7\1/4\ inches wide…

III.  OTHER FTC REGULATIONS  

FTC regulations provide:  

 “It is a deceptive act or practice for any used vehicle dealer… (1) To misrepresent the mechanical condition of a used vehicle; (2) To misrepresent the terms of any warranty offered in connection with the sale of a used vehicle; and (3) To represent that a used vehicle is sold with a warranty when the vehicle is sold without any warranty…  {or to] fail to make available, prior to sale, the terms of any written warranty offered in connection with the sale of a used vehicle.    16 CFR 455 

Sec. 455.4 “Contrary statements. You may not make any statements, oral or written, or take other actions which alter or contradict the disclosures required by Secs. 455.2 and 455.3. You may negotiate over warranty coverage, as provided in Sec. 455.2(b) of this part, as long as the final warranty terms are identified in the contract of sale and summarized on the copy of the window form you give to the buyer.”

Sec. 455.5 “Spanish language sales. If you conduct a sale in Spanish, the window form required by Sec. 455.2 and the contract disclosures required by Sec. 455.3 must be in that language.”

    1. Remedies for Window Sticker Violations

Failure to place the window sticker on the vehicle is a deceptive practice and under New Jersey law as well as some other states, the consumer may sue for additional damages.  The consumer may also attempt to cancel the deal.  

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