General Business Law, section 198-b. Sale or Lease of Used Motor Vehicles
a. Definitions. As used in this section, the following words shall have the following
meanings:
1. "Consumer" means the purchaser, or lessee, other than for purposes of
resale, of a used motor vehicle primarily used for personal, family, or
household purposes and subject to a warranty, and the spouse or child of
the purchaser or the lessee if either such motor vehicle or the lease of
such motor vehicle is transferred to the spouse or child during the
duration of any warranty applicable to such motor vehicle, and any other
person entitled by the terms of such warranty to enforce the obligations of
the warranty;
2. "Used motor vehicle" means a motor vehicle, excluding motorcycles,
motor homes and off-road vehicles, which has been purchased, leased,
or transferred either after eighteen thousand miles of operation or two
years from the date of original delivery, whichever is earlier;
3. "Dealer" means any person or business which sells, offers for sale,
leases or offers for lease a used vehicle after selling, offering for sale,
leasing or offering for lease three or more used vehicles in the previous
twelve month period, but does not include:
(a) a bank or financial institution except in the case of a
lease of a used motor vehicle,
(b) a business selling a used vehicle to an employee of
that business,
(c) a regulated public utility which sells at public auction
vehicles used in the ordinary course of its operations,
provided that any advertisements of such sales
conspicuously disclose the "as is" nature of the sale,
(d) the sale of a leased vehicle to that vehicle's lessee, a
family member of the lessee, or an employee of the
lessee, or
(e) or the state, its agencies, bureaus, boards,
commissions and authorities, and all of the political
subdivisions of the state, including the agencies and
authorities of such subdivisions;
4. "Warranty" means any undertaking in connection with the sale or lease
by a dealer of a used motor vehicle to refund, repair, replace, maintain or
take other action with respect to such used motor vehicle and provided at
no extra charge beyond the price of the used motor vehicle;
5. "Service contract" means a contract in writing for any period of time or
any specific mileage to refund, repair, replace, maintain or take other
action with respect to a used motor vehicle and provided at an extra
charge beyond the price of the used motor vehicle or of the lease contract
for the used motor vehicle;
6. "Repair insurance" means a contract in writing for any period of time or
any specific mileage to refund, repair, replace, maintain or take other
action with respect to a used motor vehicle and which is regulated by the
insurance department.
b. Written Warranty required; terms.
1. No dealer shall sell or lease a used motor vehicle to a consumer
without giving the consumer a written warranty which shall at minimum
apply for the following terms:
(a) If the used motor vehicle has thirty-six thousand miles
or less, the warranty shall be at minimum ninety days or
four thousand miles, whichever comes first.
(b) If the used motor vehicle has more than thirty-six
thousand miles, but less than eighty thousand miles, the
warranty shall be at minimum sixty days or three thousand
miles, whichever comes first.
(c) If the used motor vehicle has eighty thousand miles or
more but no more than one hundred thousand miles, the
warranty shall be at a minimum thirty days or one
thousand miles, whichever comes first.
2. The written warranty shall require the dealer or his agent to repair or, at
the election of the dealer, reimburse the consumer for the reasonable
cost of repairing the failure of a covered part. Covered parts shall at least
include the following items:
(a) Engine. All lubricated parts, water pump, fuel pump,
manifolds, engine block, cylinder head, rotary engine
housings and flywheel.
(b) Transmission. The transmission case, internal parts,
and the torque converter.
(c) Drive axle. Front and rear drive axle housings and
internal parts, axle shafts, propeller shafts and universal
joints.
(d) Brakes. Master cylinder, vacuum assist booster, wheel
cylinders, hydraulic lines and fittings and disc brake
calipers.
(e) Radiator.
(f) Steering. The steering gear housing and all internal
parts, power steering pump, valve body, piston and rack.
(g) Alternator, generator, starter, ignition system excluding
the battery.
3. Such repair or reimbursement shall be made by the dealer
notwithstanding the fact that the warranty period has expired, provided
the consumer notifies the dealer of the failure of a covered part within the
specified warranty period.
4. The written warranty may contain additional language excluding
coverage:
(a) for a failure of a covered part caused by a lack of
customary maintenance;
(b) for a failure of a covered part caused by collision,
abuse, negligence, theft, vandalism, fire or other casualty
and damage from the environment (windstorm, lightning,
road hazards, etc.);
(c) if the odometer has been stopped or altered such that
the vehicle's actual mileage cannot be readily determined
or if any covered part has been altered such that a
covered part was thereby caused to fail;
(d) for maintenance services and the parts used in
connection with such services such as seals, gaskets, oil
or grease unless required in connection with the repair of
a covered part;
(e) for a motor tuneup:
(f) for a failure resulting from racing or other competition;
(g) for a failure caused by towing a trailer or another
vehicle unless the used motor vehicle is equipped for this
as recommended by the manufacturer;
(h) if the used motor vehicle is used to carry passengers
for hire;
(i) if the used motor vehicle is rented to someone other
than the consumer as defined in paragraph one of
subdivision a of this section;
(j) for repair of valves and/or rings to correct low
compression and/or oil consumption which are considered
normal wear;
(k) to the extent otherwise permitted by law, for property
damage arising or allegedly arising out of the failure of a
covered part; and
(l) to the extent otherwise permitted by law, for loss of the
use of the used motor vehicle, loss of time, inconvenience,
commercial loss or consequential damages.
c. Failure to honor warranty.
1. If the dealer or his agent fails to correct a malfunction or defect as
required by the warranty specified in this section which substantially
impairs the value of the used motor vehicle to the consumer after a
reasonable period of time, the dealer shall accept return of the used
motor vehicle from the consumer and refund to the consumer the full
purchase price, or in the case of a lease contract all payments made
under the contract, including sales or compensating use tax, less a
reasonable allowance for any damage not attributable to normal wear or
usage, and adjustment for any modifications which either increase or
decrease the market value of the vehicle or of the lease contract, and in
the case of a lease contract, shall cancel all further payments due from
the consumer under the lease contract. In determining the purchase price
to be refunded or in determining all payments made under a lease
contract to be refunded, the purchase price, or all payments made under
a lease contract, shall be deemed equaI to the sum of the actual cash
difference paid for the used motor vehicle, or for the lease contract, plus,
if the dealer elects to not return any vehicles traded-in by the consumer,
the wholesale value of any such traded-in vehicles as listed in the
National Auto Dealers Association Used Car Guide, or such other guide
as may be specified in regulations promulgated by the commissioner of
motor vehicles, as adjusted for mileage, improvements, and any major
physical or mechanical defects in the traded-in vehicle at the time of
trade-in. The dealer selling or leasing the used motor vehicle shall
deliver to the consumer a written notice including conspicuous language
indicating that if the consumer should be entitled to a refund pursuant to
this section, the value of any vehicle traded-in by the consumer, if the
dealer elects to not return it to the consumer, for purposes of determining
the amount of such refund will be determined by reference to the National
Auto Dealers Association Used Car Guide wholesale value, or such other
guide as may be approved by the commissioner of motor vehicles, as
adjusted for mileage improvements, and any major physical or
mechanical defects, rather than the value listed in the sales contract.
Refunds shall be made to the consumer and lienholder, if any, as their
interests may appear on the records of ownership kept by the department
of motor vehicles. If the amount to be refunded to the lienholder will be
insufficient to discharge the lien, the dealer shall notify the consumer in
writing by registered or certified mail that the consumer has thirty days to
pay the lienholder the amount which, together with the amount to be
refunded by the dealer, will be sufficient to discharge the lien. The notice
to the consumer shall contain conspicuous language warning the
consumer that failure to pay such funds to the lienholder within thirty days
will terminate the dealer's obligation to provide a refund. If the consumer
fails to make such payment within thirty days, the dealer shall have no
further responsibility to provide a refund under this section. Alternatively,
the dealer may elect to offer to replace the used motor vehicle with a
comparably priced vehicle, with such adjustment in price as the parties
may agree to. The consumer shall not be obligated to accept a
replacement vehicle, but may instead elect to receive the refund provided
under this section. It shall be an affirmative defense to any claim under
this section that:
(a) The malfunction or defect does not substantially impair
such value; or
(b) The malfunction or defect is the result of abuse, neglect
or unreasonable modifications or alterations of the used
motor vehicle.
2. It shall be presumed that a dealer has had a reasonable opportunity to
correct a malfunction or defect in a used motor vehicle, if:
(a) The same malfunction or defect has been subject to
repair three or more times by the selling or leasing dealer
or his agent within the warranty period, but such
malfunction or defect continues to exist; or
(b) The vehicle is out of service by reason of repair or
malfunction or defect for a cumulative total of fifteen or
more days during the warranty period. Said period shall
not include days when the dealer is unable to complete
the repair because of the unavailability of necessary repair
parts. The dealer shall be required to exercise due
diligence in attempting to obtain necessary repair parts.
Provided, however, that if a vehicle has been out of
service for a cumulative total of forty-five days, even if a
portion of that time is attributable to the unavailability of
replacement parts, the consumer shall be entitled to the
replacement or refund remedies provided in this section.
3. The term of any warranty, service contract or repair insurance shall be
extended by any time period during which the used motor vehicle is in
the possession of the dealer or his duly authorized agent for the purpose
of repairing the used motor vehicle under the terms and obligations of
said warranty, service contract or repair insurance.
4. The term of any warranty, service contract or repair insurance, and the
fifteen day out-of-service period, shall be extended by any time during
which repair services are not available to the consumer because of a
war, invasion or strike, fire, flood or other natural disaster.
d. Waiver void.
1. Any agreement entered into by a consumer for the purchase or lease
of a used motor vehicle which waives, limits or disclaims the rights set
forth in this article shall be void as contrary to public policy. Further, if a
dealer fails to give the written warranty required by this article, the dealer
nevertheless shall be deemed to have given said warranty as a matter of
law.
2. Nothing in this section shall in any way limit the rights or remedies
which are otherwise available to a consumer under any other law.
3. Notwithstanding paragraph one of this subdivision, this article shall not
apply to used motor vehicles sold for, or in the case of a lease where the
value of the used motor vehicle as agreed to by the consumer and the
dealer which vehicle is the subject of the contract is, less than one
thousand five hundred dollars, or to used motor vehicles with over one
hundred thousand miles at the time of sale or lease if said mileage is
indicated in writing at the time of sale or lease. Further, this article shall
not apply to the sale or lease of historical motor vehicles as defined in
section four hundred one of the vehicle and traffic law.
e. Time of delivery, location of warranty and notice. The written warranty provided for in
subdivision b of this section and the written notice provided for in subdivision c of this
section shall be delivered to the consumer at or before the time the consumer signs the
sales or lease contract for the used motor vehicle. The warranty and the notice may be
set forth on one sheet or on separate sheets. They may be separate from, attached to, or
a part of the sales or lease contract. If they are part of the sales or lease contract, they
shall be separated from the other contract provisions and each headed by a
conspicuous title.
f. Arbitration and enforcement.
1. If a dealer has established or participates in an informal dispute
settlement procedure which complies in all respects with the provisions of
part seven hundred three of title sixteen of the code of federal regulations
the provisions of this article concerning refunds or replacement shall not
apply to any consumer who has not first resorted to such procedure.
Dealers utilizing informal dispute settlement procedures pursuant to this
subdivision shall insure that arbitrators participating in such informal
dispute settlement procedures are familiar with the provisions of this
section and shall provide to arbitrators and consumers who seek
arbitration a copy of the provisions of this section together with the
following notice in conspicuous ten point bold face type:
USED CAR LEMON LAW BILL OF RIGHTS
1.If you purchase a used car for more than one thousand five
hundred dollars, or lease a used car where you and the dealer
have agreed that the car's value is more than one thousand five
hundred dollars, from anyone selling or leasing three or more
used cars a year, you must be given a written warranty.
2.If your used car has 18,000 miles or less, you may be protected by
the new car lemon law.
3.(a) If your used car has more than 18,000 miles and up to and
including 36,000 miles, a warranty must be provided for at least
90 days or 4,000 miles, whichever comes first.
(b) If your used car has more than 36,000 miles but less than
80,000 miles, a warranty must be provided for at least 60 days or
3,000 miles, whichever comes first.
(c) If your used car has 80,000 miles or more but no more than
100,000 miles, a warranty must be provided for at least 30 days or
1,000 miles, whichever comes first. Cars with over 100,000 miles
are not covered.
4.If your engine, transmission, drive axle, brakes, radiator, steering,
alternator, generator, starter, or ignition system (excluding the
battery) are defective, the dealer or his agent must repair or, if he
so chooses, reimburse you for the reasonable cost of repair.
5.If the same problem cannot be repaired after three or more
attempts, you are entitled to return the car and receive a refund of
your purchase price or of all payments made under your lease
contract, and of sales tax and fees, minus a reasonable allowance
for any damage not attributable to normal usage or wear, and, in
the case of a lease contract, a cancellation of all further payments
you are otherwise required to make under the lease contract.
6.If your car is out of service to repair a problem for a total of fifteen
days or more during the warranty period you are entitled to return
the car and receive a refund of your purchase price or of all
payments made under your lease contract, and of sales tax and
fees, minus a reasonable allowance for any damage not
attributable to normal usage or wear, and, in the case of a lease
contract, a cancellation of all further payments you are otherwise
required to make under the lease contract.
7.A dealer may put into the written warranty certain provisions
which will prohibit your recovery under certain conditions;
however, the dealer may not cause you to waive any rights under
this law.
8.A dealer may refuse to refund your purchase price, or the
payments made under your lease contract, if the problem does
not substantially impair the value of your car, or if the problem is
caused by abuse, neglect, or unreasonable modification.
9.If a dealer has established an arbitration procedure, the dealer
may refuse to refund your purchase price until you first resort to
the procedure. If the dealer does not have an arbitration
procedure, you may resort to any remedy provided by law and
may be entitled to your attorney's fees if you prevail.
10.As an alternative to the arbitration procedure made available
through the dealer you may instead choose to submit your claim
to an independent arbitrator, approved by the attorney general.
You may have to pay a fee for such an arbitration. Contact your
local consumer office or attorney general's office to find out how to
arrange for independent arbitration.
11.If any dealer refuses to honor your rights or you are not satisfied
by the informal dispute settlement procedure, complain to the
New York State Attorney General, Executive Office, Capitol,
Albany, N.Y. 12224.
2. A dealer shall have up to thirty days from the date of notice by the
consumer that the arbitrator's decision has been accepted to comply with
the terms of such decision. Provided, however, that nothing contained in
this subdivision shall impose any liability on a dealer where a delay
beyond the thirty day period is attributable to a consumer who has
requested a particular replacement vehicle or otherwise made
compliance impossible within said period.
3. Upon the payment of a prescribed filing fee, a consumer shall have the
option of submitting any dispute arising under this section to an alternate
arbitration mechanism established pursuant to regulations promulgated
hereunder by the attorney general. Upon application of the consumer
and payment of the filing fee, the dealer shall submit to such alternate
arbitration.
Such alternate arbitration shall be conducted by a professional arbitrator
or arbitration firm appointed by or under regulations established by the
attorney general. Such mechanism shall ensure the personal objectivity
of its arbitrators and the right of each party to present its case, to be in
attendance during any presentation made by the other party and to rebut
or refute such presentation. In all other respects, such alternate
arbitration mechanism shall be governed by article seventy-five of the
civil practice law and rules.
The notice required by paragraph one of this subdivision, entitled Used
Car Lemon Law Bill of Rights, shall be provided to arbitrators and
consumers who seek arbitration under the subdivision.
A dealer shall have thirty days from the date of mailing of a copy of the
arbitrator's decision to such a dealer to comply with the terms of such
decision. Failure to comply within the thirty day period shall entitle the
consumer to recover, in addition to any other recovery to which he may
be entitled, a fee of twenty-five dollars for each business day beyond
thirty days up to five hundred dollars; provided however, that nothing in
this subdivision shall impose any liability on a dealer where a delay
beyond the thirty day period is attributable to a consumer who has
requested a particular replacement vehicle or otherwise made
compliance impossible within said period.
4. In no event shall a consumer who has resorted to an informal dispute
settlement procedure be precluded from seeking the rights or remedies
available by law.
5. In an action brought to enforce the provisions of this article, the court
may award reasonable attorney's fees to a prevailing plaintiff or to a
consumer who prevails in any judicial action or proceeding arising out of
an arbitration proceeding held pursuant to paragraph three of this
subdivision. In the event a prevailing plaintiff is required to retain the
services of an attorney to enforce the collection of an award granted
pursuant to this section, the court may assess against the dealer
reasonable attorney's fees for services rendered to enforce collection of
said award.
6. Any action brought pursuant to this article shall be commenced within
four years of the date of original delivery of the used motor vehicle to the
consumer.
g. Notice of consumer rights. At the time of purchase or lease of a used motor vehicle
from a dealer in this state, the dealer shall provide to the consumer a notice, printed in
not less than eight point bold face type, entitled "Used Car Lemon Law Bill of Rights".
The text of such notice shall be identical with the notice required by paragraph one of
subdivision f of this section.
