HOUSE BILL 317

51st legislature - STATE OF NEW MEXICO - first session, 2013

INTRODUCED BY

Patricia A. Lundstrom

AN ACT

RELATING TO USED MOTOR VEHICLES; AMENDING THE MOTOR VEHICLE QUALITY ASSURANCE ACT; PROVIDING FOR AN EXPRESS WARRANTY FOR USED MOTOR VEHICLES; PROVIDING REMEDIES AND PENALTIES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. Section 57-16A-1 NMSA 1978 (being Laws 1985, Chapter 220, Section 1) is amended to read:

     "57-16A-1. SHORT TITLE.--[This act] Chapter 57, Article 16A NMSA 1978 may be cited as the "Motor Vehicle Quality Assurance Act"."

     SECTION 2. A new section of the Motor Vehicle Quality Assurance Act is enacted to read:

     "[NEW MATERIAL] EXPRESS WARRANTY--DURATION--REMEDIES.--

          A. No used motor vehicle dealer shall sell or lease a used motor vehicle to a consumer without giving the buyer or lessee an express written warranty explained in the buyer's or lessee's preferred language, that shall have a minimum duration of at least thirty days from the date of delivery of a used motor vehicle or when the odometer has registered one thousand miles from the odometer reading shown on the sales or lease contract, whichever is earlier. In calculating time pursuant to this subsection, a day on which the express written warranty is breached and all subsequent days in which the used motor vehicle fails to conform with the express written warranty are excluded. In calculating distance pursuant to this subsection, the miles driven to obtain or in connection with the repair, servicing or testing of the used motor vehicle that fails to conform with the express written warranty are excluded.

          B. The written warranty required in Subsection A of this section shall provide that if the buyer or lessee notifies the used motor vehicle dealer that the used motor vehicle does not conform to the written warranty, then by no later than 5:00 p.m. on the next business day after the day on which the buyer or lessee provides such notification to the dealer, the dealer shall notify the buyer or lessee that the dealer will:

                (1) repair the used motor vehicle to conform with the written warranty;

                (2) reimburse the buyer or lessee for the cost of repairs; or

                (3) cancel the sale or lease contract and provide the buyer or lessee with a full refund, less a reasonable amount for any damage sustained by the used motor vehicle after the sale or lease, excepting damage caused by any nonconformity with the written warranty.

          C. The written warranty required in Subsection A of this section shall provide that if the used motor vehicle dealer chooses to repair the used motor vehicle pursuant to Paragraph (1) of Subsection B of this section, the dealer shall pay one hundred percent of the cost of labor and parts for any repairs pursuant to that warranty and shall not charge the buyer or lessee for the cost of:

                (1) vehicle towing;

                (2) repairs;

                (3) inspecting the used motor vehicle;

                (4) tearing down the engine, transmission or other part of the used motor vehicle; or

                (5) a deductible.

          D. If the used motor vehicle dealer makes two unsuccessful attempts to repair the used motor vehicle pursuant to Paragraph (1) of Subsection B of this section, the dealer shall then cancel the sale or lease pursuant to Subsection E of this section.

          E. Rather than repairing the used motor vehicle pursuant to Paragraph (1) of Subsection B of this section or reimbursing the buyer or lessee for the cost of repairs pursuant to Paragraph (2) of Subsection B of this section, the used motor vehicle dealer or its agent may cancel the sale or lease and refund to the buyer or lessee all money paid pursuant to the sales contract or lease, less a reasonable amount for any damage sustained by the used motor vehicle after the sale or lease, excepting damage caused by any nonconformity with the written warranty required in Subsection A of this section. If the dealer cancels the sale or lease:

                (1) the dealer shall give written notice to the buyer or lessee, by personal delivery or first-class mail, of the dealer's decision to cancel the sale or lease;

                (2) the buyer or lessee shall return the used motor vehicle in substantially the same condition in which it was delivered by the dealer, except for reasonable wear and tear and any nonconformity with the written warranty;

                (3) upon the return of the used motor vehicle to the dealer, the dealer shall provide the buyer or lessee with a receipt stating:

                     (a) the date that the used motor vehicle was returned to the dealer;

                     (b) the vehicle identification number of the used motor vehicle;

                     (c) the make, year and model of the used motor vehicle;

                     (d) the odometer reading at the time that the used motor vehicle was returned to the dealer;

                     (e) a statement that the dealer has canceled the sale or lease; and

                     (f) the amount of the buyer's or lessee's refund;

                (4) the dealer shall not treat the return of the used motor vehicle pursuant to the contract cancellation set forth in Paragraph (3) of Subsection B of this section as a repossession;

                (5) the buyer or lessee shall execute the documents necessary to transfer any interest in the used motor vehicle to the dealer and to remove the buyer or lessee from any registration or title documents; and

                (6) the dealer shall refund to the buyer or lessee, no later than 5:00 p.m. on the next business day after the day on which the buyer or lessee returns the used motor vehicle to the dealer, all amounts paid pursuant to the sale or lease agreement, less a reasonable amount for property damage sustained by the used motor vehicle after the sale or lease, excepting damage caused by any nonconformity with the warranty.

          F. The written warranty required in Subsection A of this section shall cover at least the following components:

                (1) engine, including all internally lubricated parts;

                (2) transmission and transaxle;

                (3) front- and rear-wheel drive components;

                (4) engine cooling system;

                (5) alternator, generator, starter and ignition system, except for the battery;

                (6) braking system;

                (7) front and rear suspension systems;

                (8) steering system and components;

                (9) seatbelts;

                (10) inflatable restraint systems installed on the used motor vehicle as originally manufactured;

                (11) catalytic converter;

                (12) heater;

                (13) seals and gaskets on components itemized in this subsection; and

                (14) electrical, electronic and computer components, to the extent that those components substantially affect the functionality of other components itemized in this subsection.

          G. A used motor vehicle dealer shall display on each used motor vehicle offered for sale or lease a written statement that itemizes each of the systems and components set forth in Subsection F of this section and shall specify that the dealer will either repair the used motor vehicle to conform with the written warranty or cancel the sale or lease contract and provide the buyer or lessee with a full refund, less a reasonable amount for any damage sustained by the used motor vehicle after the sale or lease, excepting damage caused by any nonconformity with the written warranty.

          H. The used motor vehicle dealer shall make the repair or provide a refund notwithstanding the fact that the warranty period has expired if the buyer or lessee notified the used motor vehicle dealer of the failure of a covered system or part within fifteen days of the expiration of the warranty period.

          I. This section shall not apply to any defect or nonconformity caused by the unreasonable use of the used motor vehicle following the sale or lease.

          J. In any proceeding in which the exclusion of coverage permitted by Subsection I of this section or the deduction allowed pursuant to Paragraph (6) of Subsection E of this section is an issue, the dealer shall have the burden of proof.

          K. Any agreement between a used motor vehicle dealer and a buyer or lessee that disclaims, limits or waives the rights set forth in this section shall, at the option of the buyer or lessee, be void as contrary to public policy.

          L. If a used motor vehicle dealer fails to give a buyer a written warranty pursuant to this section, the used motor vehicle dealer shall be deemed to have provided the warranty as a matter of law.

          M. A violation of the provisions of this section constitutes an unfair or deceptive trade practice pursuant to the Unfair Practices Act."

     SECTION 3. SEVERABILITY.--If any part or application of the provisions of this act is held invalid, the remainder or its application to other situations or persons shall not be affected.

     SECTION 4. APPLICABILITY.--The provisions of this act apply to sales of used motor vehicles entered into on or after July 1, 2013.

     SECTION 5. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2013.

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