SB 600 - Used Car Buyer's Protection Act - create

Georgia Senate - 1995/1996 Sessions

SB 600 - Used Car Buyer's Protection Act - create

Page Numbers - 1/ 2/ 3/ 4/ 5/ 6/ 7/ 8/ 9/ 10
Code Sections - 10-1-900/ 10-1-901/ 10-1-902/ 10-1-903/ 10-1-904/ 10-1-905/ 10-1-906/ 10-1-907/ 10-1-908/ 10-1-909/ 10-1-910/ 10-1-911/ 10-1-912/ 10-1-913
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1. James  35th

Senate Comm: C Aff / House Comm: / Senate Vote: Yeas Nays --------------------------------------------- Senate Action House --------------------------------------------- 1/23/96 Read 1st time --------------------------------------------- Code Sections amended:
SB 600 96 LC 19 2889 SENATE BILL 600 By: Senator James of the 35th A BILL TO BE ENTITLED AN ACT 1- 1 To amend Chapter 1 of Title 10 of the Official Code of 1- 2 Georgia Annotated, relating to selling and other trade 1- 3 practices, so as to create the "Used Car Buyer's Protection 1- 4 Act"; to provide for legislative findings; to provide for 1- 5 definitions; to require dealers to offer a written warranty 1- 6 on all used motor vehicles sold to consumers; to provide for 1- 7 the terms of such warranty; to provide for returns and 1- 8 refunds under certain conditions; to provide for affirmative 1- 9 defenses against claims; to provide for opportunity to make 1-10 repairs in order to conform to written warranties; to 1-11 provide for the extension of warranty or service contract 1-12 terms under certain conditions; to provide for exceptions; 1-13 to provide for consumer notice; to provide for informal 1-14 dispute settlement procedures; to provide for remedies for 1-15 violations; to provide for limitation of actions; to provide 1-16 for applicability; to provide for related matters; to 1-17 provide an effective date; to repeal conflicting laws; and 1-18 for other purposes. 1-19 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA: SECTION 1. 1-20 Chapter 1 of Title 10 of the Official Code of Georgia 1-21 Annotated, relating to selling and other trade practices, is 1-22 amended by adding at the end thereof a new Article 34 to 1-23 read as follows: "ARTICLE 34 1-24 10-1-900. (Index) 1-25 This article shall be known and may be cited as the 'Used 1-26 Car Buyer's Protection Act.' 1-27 10-1-901. (Index) 1-28 The General Assembly recognizes that the procurement of a 1-29 used motor vehicle is a major consumer purchase. It is 1-30 the intent of the General Assembly to provide certain 1-31 disclosure rights to consumers who purchase used motor S. B. 600 -1- (Index) LC 19 2889 2- 1 vehicles from dealers in this state. It is the intent of 2- 2 the General Assembly that consumers be made aware of their 2- 3 rights prior to the sale of a used motor vehicle so as to 2- 4 receive the basis of their bargain. 2- 5 10-1-902. (Index) 2- 6 As used in this article, the term: 2- 7 (1) 'Consumer' means the purchaser, other than for 2- 8 purposes of resale, of a used motor vehicle normally 2- 9 used for personal, family, or household purposes and 2-10 subject to a warranty, and the spouse or child of the 10-1-903 10-1-904 10-1-905 10-1-906 10-1-907 10-1-908 10-1-909 10-1-910 10-1-911 10-1-912 2-12 spouse or child during the duration of any warranty 2-13 applicable to such motor vehicle, and any other person 2-14 entitled by the terms of such warranty to enforce the 2-15 obligations of the warranty. 2-16 (2) 'Dealer' means any person or business which sells or 2-17 offers for sale a used motor vehicle after selling or 2-18 offering for sale three or more used vehicles in the 2-19 previous 12 month period but does not include a bank or 2-20 financial institution, a business selling a used vehicle 2-21 to an employee of that business, a regulated public 2-22 utility which sells at public auction vehicles used in 2-23 the ordinary course of its operations, provided that any 2-24 advertisements of such sales conspicuously disclose the 2-25 'as is' nature of the sale, a lessor selling a leased 2-26 vehicle to that vehicle's lessee, a family member of the 2-27 lessee, or an employee of the lessee, or the state, its 2-28 agencies, bureaus, boards, commissions, and authorities, 2-29 and any political subdivision of the state, including 2-30 the agencies and authorities of such subdivision. 2-31 (3) 'Manufacturer' means any person engaged in the 2-32 business of constructing or assembling new motor 2-33 vehicles or engaged in the business of importing new 2-34 motor vehicles into the United States for the purpose of 2-35 selling or distributing new motor vehicles to new motor 2-36 vehicle dealers. 2-37 (4) 'Service contract' means a contract in writing for 2-38 any period of time or any specific mileage to refund, 2-39 repair, replace, maintain, or take other action with 2-40 respect to a used motor vehicle and provided at an extra 2-41 charge beyond the price of the used motor vehicle. S. B. 600 -2- (Index) LC 19 2889 3- 1 (5) 'Used motor vehicle' means a motor vehicle, 3- 2 excluding motorcycles, motor homes, and off-road 3- 3 vehicles, which has been driven more than the limited 3- 4 use necessary in moving or road testing a new vehicle 3- 5 prior to delivery. 3- 6 (6) 'Warranty' means any undertaking in writing, 3- 7 excluding a service contract, in connection with the 3- 8 sale by a dealer of a used motor vehicle to refund, 3- 9 repair, replace, maintain, or take other action with 3-10 respect to a used motor vehicle and provided at no extra 3-11 charge beyond the purchase price. 3-12 10-1-903. (Index) 3-13 (a) No dealer shall sell a used motor vehicle to a 3-14 consumer without giving the consumer a written warranty 3-15 which shall at a minimum apply for the following terms: 3-16 (1) If the used motor vehicle has 36,000 miles or less, 3-17 the warranty shall be at minimum 60 days or 3,000 miles, 3-18 whichever comes first; or 3-19 (2) If the used motor vehicle has more than 36,000 3-20 miles, the warranty shall be at minimum 30 days or 1,000 3-21 miles, whichever comes first. 3-22 (b) The written warranty shall require the dealer or the 3-23 dealer's agent to repair or, at the election of the 3-24 dealer, reimburse the consumer for the reasonable cost of 3-25 repairing the failure of a covered part. Covered parts 3-26 shall at least include the following items: 3-27 (1) Engine, including all lubricated parts, water pump, 3-28 fuel pump, manifolds, engine block, cylinder head, 3-29 rotary engine housings, and flywheel; 3-30 (2) Transmission, including the transmission case, 3-31 internal parts, and the torque converter; 3-32 (3) Drive axle, including front and rear drive axle 3-33 housings and internal parts, axle shafts, propeller 3-34 shafts, and universal joints; 3-35 (4) Brakes, including master cylinder, vacuum assist 3-36 booster, wheel cylinders, hydraulic lines and fittings, 3-37 and disc brake calipers; 3-38 (5) Radiator; S. B. 600 -3- (Index) LC 19 2889 4- 1 (6) Steering, including the steering gear housing and 4- 2 all internal parts, power steering pump, valve body, 4- 3 piston, and rack; and 4- 4 (7) Alternator, generator, starter, and ignition system, 4- 5 excluding the battery. 4- 6 (c) Such repair or reimbursement shall be made by the 4- 7 dealer notwithstanding the fact that the warranty period 4- 8 has expired, provided that the consumer notifies the 4- 9 dealer of the failure of a covered part within the 4-10 specified warranty period. 4-11 (d) The written warranty may contain additional language 4-12 excluding coverage: 4-13 (1) For a failure of a covered part caused by a lack of 4-14 customer maintenance; 4-15 (2) For a failure of a covered part caused by collision, 4-16 abuse, negligence, theft, vandalism, fire or other 4-17 casualty, and damage from the environment, including 4-18 windstorm, lightning, and road hazards; 4-19 (3) If the odometer has been stopped or altered such 4-20 that the vehicle's actual mileage cannot be readily 4-21 determined or if any covered part has been altered such 4-22 that a covered part was thereby caused to fail; 4-23 (4) For maintenance services and the parts used in 4-24 connection with such services such as seals, gaskets, 4-25 oil, or grease unless required in connection with the 4-26 repair of a covered part; 4-27 (5) For a motor tune-up; 4-28 (6) For a failure resulting from racing or other 4-29 competition; 4-30 (7) For a failure caused by towing a trailer or another 4-31 vehicle unless the used motor vehicle is equipped for 4-32 this as recommended by the manufacturer; 4-33 (8) If the used motor vehicle is used to carry 4-34 passengers for hire; 4-35 (9) If the used motor vehicle is rented to someone else; 4-36 (10) For repair of valves or rings, or both, to correct 4-37 low compression or oil consumption, or both, which are 4-38 considered normal wear; S. B. 600 -4- (Index) LC 19 2889 5- 1 (11) To the extent otherwise permitted by law, for 5- 2 property damage arising or allegedly arising out of the 5- 3 failure of a covered part; and 5- 4 (12) To the extent otherwise permitted by law, for loss 5- 5 of the use of the used motor vehicle, loss of time, 5- 6 inconvenience, commercial loss, or consequential 5- 7 damages. 5- 8 10-1-904. (Index) 5- 9 (a) If the dealer or the dealer's agent fails to correct a 5-10 malfunction or defect as required by the warranty 5-11 specified in Code Section 10-1-903 which substantially 5-12 impairs the value of the used motor vehicle to the 5-13 consumer after a reasonable period of time, the dealer 5-14 shall accept return of the used motor vehicle from the 5-15 consumer and refund to the consumer the full purchase 5-16 price including sales tax, less a reasonable allowance for 5-17 any damage not attributable to normal wear or usage, and 5-18 adjustment for any modifications which either increase or 5-19 decrease the market value of the vehicle. In determining 5-20 the purchase price to be refunded, the purchase price 5-21 shall be deemed equal to the sum of the actual cash 5-22 difference paid for the used motor vehicle plus, if the 5-23 dealer elects not to return any vehicle traded in by the 5-24 consumer, the wholesale value of any such traded-in 5-25 vehicles as listed in the National Auto Dealers 5-26 Association Used Car Guide, or such other guide as may be 5-27 specified in regulations promulgated by the state revenue 5-28 commissioner, as adjusted for mileage, improvements, and 5-29 any major physical or mechanical defects in the traded-in 5-30 vehicle at the time of trade-in. The dealer selling the 5-31 used motor vehicle shall deliver to the consumer a written 5-32 notice including conspicuous language indicating that if 5-33 the consumer should be entitled to a refund pursuant to 5-34 this Code section, the value of any vehicle traded in by 5-35 the consumer, if the dealer elects not to return it to the 5-36 consumer, for purposes of determining the amount of such 5-37 refund will be determined by reference to the National 5-38 Auto Dealers Association Used Car Guide wholesale value, 5-39 or such other guide as may be approved by the state 5-40 revenue commissioner, as adjusted for mileage, 5-41 improvements, and any major physical or mechanical 5-42 defects, rather than the value listed in the sales 5-43 contract. Refunds shall be made to the consumer and 5-44 lienholder, if any, as their interests may appear on the S. B. 600 -5- (Index) LC 19 2889 6- 1 records of ownership kept by the department of motor 6- 2 vehicles. If the amount to be refunded to the lienholder 6- 3 will be insufficient to discharge the lien, the dealer 6- 4 shall notify the consumer in writing by registered or 6- 5 certified mail that the consumer has 30 days to pay the 6- 6 lienholder the amount which, together with the amount to 6- 7 be refunded by the dealer, will be sufficient to discharge 6- 8 the lien. The notice to the consumer shall contain 6- 9 conspicuous language warning the consumer that failure to 6-10 pay such funds to the lienholder within 30 days will 6-11 terminate the dealer's obligation to provide a refund. If 6-12 the consumer fails to make such payment within 30 days, 6-13 the dealer shall have no further responsibility to provide 6-14 a refund under this Code section. Alternatively, the 6-15 dealer may elect to offer to replace the used motor 6-16 vehicle with a comparably priced vehicle, with such 6-17 adjustment in price as the parties may agree to. The 6-18 consumer shall not be obligated to accept a replacement 6-19 vehicle but may instead elect to receive the refund 6-20 provided under this Code section. It shall be an 6-21 affirmative defense to any claim under this subsection 6-22 that: 6-23 (1) The malfunction or defect does not substantially 6-24 impair such value; or 6-25 (2) The malfunction or defect is the result of abuse, 6-26 neglect, or unreasonable modifications or alterations of 6-27 the used motor vehicle. 6-28 (b) It shall be presumed that a dealer has had a 6-29 reasonable opportunity to correct a malfunction or defect 6-30 in a used motor vehicle if: 6-31 (1) The same malfunction or defect has been subject to 6-32 repair three or more times by the selling dealer or the 6-33 dealer's agent within the warranty period, but such 6-34 malfunction or defect continues to exist; or 6-35 (2) The vehicle is out of service by reason of repair or 6-36 malfunction or defect for a cumulative total of 15 or 6-37 more days during the warranty period. Said period shall 6-38 not include days when the dealer is unable to complete 6-39 the repair because of the unavailability of necessary 6-40 repair parts. The dealer shall be required to exercise 6-41 due diligence in attempting to obtain necessary repair 6-42 parts; provided, however, that if a vehicle has been out 6-43 of service for a cumulative total of 45 days, even if a S. B. 600 -6- (Index) LC 19 2889 7- 1 portion of that time is attributable to the 7- 2 unavailability of replacement parts, the consumer shall 7- 3 be entitled to the replacement or refund remedies 7- 4 provided in this Code section. 7- 5 10-1-905. (Index) 7- 6 (a) The term of any warranty or service contract shall be 7- 7 extended by any time period during which the used motor 7- 8 vehicle is in the possession of the dealer or the dealer's 7- 9 duly authorized agent for the purpose of repairing the 7-10 used motor vehicle under the terms and obligations of said 7-11 warranty or service contract. 7-12 (b) The term of any warranty or service contract and the 7-13 15 day out-of-service period shall be extended by any time 7-14 during which repair services are not available to the 7-15 consumer because of a war, invasion, strike, fire, flood, 7-16 or other natural disaster. 7-17 10-1-906. (Index) 7-18 Any agreement entered into by a consumer for the purchase 7-19 of a used motor vehicle which waives, limits, or disclaims 7-20 the rights set forth in this article shall be void as 7-21 contrary to public policy. Further, if a dealer fails to 7-22 give the written warranty required by this article, the 7-23 dealer nevertheless shall be deemed to have given said 7-24 warranty as a matter of law. 7-25 10-1-907. (Index) 7-26 This article shall not apply to used motor vehicles sold 7-27 for less than $1,500.00 or to used motor vehicles with 7-28 over 100,000 miles at the time of sale if said mileage is 7-29 indicated in writing at the time of sale. Further, this 7-30 article shall not apply to the sale of antique or hobby or 7-31 special interest vehicles as defined in Code Section 7-32 40-2-77. 7-33 10-1-908. (Index) 7-34 (a) The written warranty provided for in Code Section 7-35 10-1-903 and the written notice provided for in subsection 7-36 (b) of this Code section shall be delivered to the 7-37 consumer at or before the time the consumer signs the 7-38 sales contract for the used motor vehicle. The warranty 7-39 and the notice may be set forth on one sheet or on 7-40 separate sheets. They may be separate from, attached to, 7-41 or a part of the sales contract. If they are part of the S. B. 600 -7- (Index) LC 19 2889 8- 1 sales contract, they shall be separated from the other 8- 2 contract provisions and each headed by a conspicuous 8- 3 title. 8- 4 (b) If a dealer has established or participates in an 8- 5 informal dispute settlement procedure which complies in 8- 6 all respects with the provisions of Part 703 Title 16 of 8- 7 the Code of Federal Regulations, the provisions of this 8- 8 article concerning refunds or replacement shall not apply 8- 9 to any consumer who has not first resorted to such 8-10 procedure. Dealers utilizing informal dispute settlement 8-11 procedures pursuant to this subsection shall ensure that 8-12 arbitrators participating in such informal dispute 8-13 settlement procedures are familiar with the provisions of 8-14 this article and shall provide to arbitrators and 8-15 consumers who seek arbitration a copy of the provisions of 8-16 this article together with the following notice in 8-17 conspicuous ten point boldface type: 8-18 'USED CAR LEMON LAW BILL OF RIGHTS 8-19 (1) If you purchase a used car for more than $1,500.00 8-20 from anyone selling three or more used cars a year, you 8-21 must be given a written warranty. 8-22 (2) If you used car has 36,000 miles or less, the 8-23 warranty must extend for at least 60 days or 3,000 8-24 miles, whichever comes first. 8-25 (3) If you used car has more than 36,000 miles, the 8-26 warranty must extend for at least 30 days or 1,000 8-27 miles, whichever comes first. Cars with over 100,000 8-28 miles are not covered. 8-29 (4) If your engine, transmission, drive axle, brakes, 8-30 radiator, steering, alternator, generator, starter, or 8-31 ignition system, excluding the battery, are defective, 8-32 the seller or the seller's agent must repair or, if he 8-33 or she so chooses, reimburse you for the reasonable cost 8-34 of repair. 8-35 (5) If the same problem cannot be repaired after three 8-36 or more attempts, you are entitled to return the car and 8-37 receive a refund of your purchase price, sales tax, and 8-38 fees, minus a reasonable allowance for any damage not 8-39 attributable to normal usage or wear. 8-40 (6) If your car is out of service to repair a problem 8-41 for a total of 15 days or more during the warranty 8-42 period, you are entitled to return the car and receive a S. B. 600 -8- (Index) LC 19 2889 9- 1 refund of your purchase price, sales tax, and fees, 9- 2 minus a reasonable allowance for any damage not 9- 3 attributable to normal usage or wear. 9- 4 (7) A seller may put into the written warranty certain 9- 5 provisions which will prohibit your recovery under 9- 6 certain conditions; however, the seller may not cause 9- 7 you to waive any rights under this law. 9- 8 (8) A seller may refuse to refund your purchase price if 9- 9 the problem does not substantially impair the value of 9-10 your car, or if the problem is caused by abuse, neglect, 9-11 or unreasonable modification. 9-12 (9) If a seller has established an arbitration 9-13 procedure, the seller may refuse to refund your purchase 9-14 price until you first resort to the procedure. If the 9-15 seller does not have an arbitration procedure, you may 9-16 resort to any remedy provided by law and may be entitled 9-17 to your attorney's fees if you prevail.' 9-18 10-1-909. (Index) 9-19 A dealer shall have up to 30 days from the date of notice 9-20 by the consumer that the arbitrator's decision has been 9-21 accepted to comply with the terms of such decision; 9-22 provided, however, that nothing contained in this Code 9-23 section shall impose any liability on a dealer where a 9-24 delay beyond the 30 day period is attributable to a 9-25 consumer who has requested a particular replacement 9-26 vehicle or otherwise made compliance impossible within 9-27 said period. 9-28 10-1-910. (Index) 9-29 In no event shall a consumer who has resorted to an 9-30 informal dispute settlement procedure be precluded from 9-31 seeking the rights or remedies available by law. 9-32 10-1-911. (Index) 9-33 Nothing in this article shall in any way limit the rights 9-34 or remedies which are otherwise available to a consumer 9-35 under any other law. 9-36 10-1-912. (Index) 9-37 (a) In an action brought to enforce the provisions of this 9-38 article, the court may award reasonable attorney's fees to 9-39 a prevailing plaintiff. S. B. 600 -9- (Index) LC 19 2889 10- 1 (b) Any action brought pursuant to this article shall be 10- 2 commenced within four years of the date of original 10- 3 delivery of the used motor vehicle to the consumer. 10- 4 10-1-913. (Index) 10- 5 A violation of this article shall constitute an unfair and 10- 6 deceptive act or practice and a consumer transaction under 10- 7 Part 2 of Article 15 of this chapter. All public and 10- 8 private remedies provided under Part 2 of Article 15 of 10- 9 this chapter shall be available to enforce this article, 10-10 subject to the affirmative defenses provided in subsection 10-11 (a) of Code Section 10-1-904." SECTION 2. 10-12 This Act shall become effective October 1, 1996, and shall 10-13 apply to all used motor vehicles sold on or after such date. SECTION 3. 10-14 All laws and parts of laws in conflict with this Act are 10-15 repealed. S. B. 600 -10- (Index)

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