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New Bill Would Affect New Jersey Used Car Dealer Sales

Sep 26, 2018

Can used car dealers sell cars with outstanding auto recalls?

New Jersey consumer fraud attorneys are closely watching a measure impacting used car sales that’s making its way through the New Jersey State Legislature. Consumer watchdog groups claim the bill would “create a loophole in existing regulations that can help dealers pull one over on car buyers during the purchase and beyond”.

The bill, already passed in the Senate, would reportedly allow car dealers in New Jersey to sell to consumers used vehicles with dangerous outstanding auto recalls in certain, albeit less common, circumstances.

It is well-established that new vehicles with outstanding recalls cannot be sold under federal law. The new bill in New Jersey would require used car dealers “to provide information to a prospective purchaser about outstanding recalls”. Sounds like a good thing, right?

But the glitch for consumer advocacy groups is an alleged loophole in the measure that “protects dealers in the event of transactions that take weeks or months from start to finish”. If a new auto recall pops up on the vehicle between the time the consumer was provided with the initial recall report and the closing of the sale, the consumer could unknowingly receive a vehicle with a dangerous, outstanding recall.

Proponents of the law claim that used vehicle sales are generally completed within hours or days so it would be extremely rare that this situation would present itself and that if it did, most dealers would run and provided an updated report for the buyer. Plus, they argue that existing consumer protection laws would protect buyers from a fraud at the point of sale anyway. Critics want better language to clarify and close the loophole.

Other concerns advocacy groups have with the measure as it’s currently worded include:

  • failure to clarify the method of delivery of the recall notice, and
  • language that limits compensatory damages awards and attorney’s fees in resulting lawsuits.

If you have a consumer fraud question or feel you have been the victim of dealer fraud, the Law Offices of Timothy Abeel & Associates can help you. Contact us today for a free consultation.

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