N.Y. GBS Law § 198-C — New York Code / Act GBS / Article 11-A / Section 198-C
Automobile trade-in protection
Status: in_force

§ 198-c. Automobile trade-in protection. (a) As used in this section,\n"dealer" shall have the same meaning as such term is defined by section\nfour hundred fifteen of the vehicle and traffic law.\n  (b) When a dealer purchases or obtains a vehicle in trade in a retail\nsale or lease transaction and the vehicle is subject to a prior credit\nor lease balance, all of the following apply:\n  (1) If the dealer agreed to pay a specified amount on the prior credit\nor lease balance owing on the vehicle purchased or obtained in trade,\nand the agreement to pay the specified amount is contained in a written\nagreement documenting the transaction, the dealer shall tender the\nagreed upon amount as provided in the written agreement to the lessor,\nor to the lien holder, or to the designee of that lessor or lien holder\nof the vehicle purchased or obtained in trade within twenty-one calendar\ndays of purchasing or obtaining the vehicle in trade, provided, however,\nthat the dealer may rely upon the amount due as stated by the lessor or\nlien holder.\n  (2) If the dealer did not set forth an agreement regarding payment of\na prior credit or lease balance owed on the vehicle purchased or\nobtained in trade, in a written agreement documenting the transaction,\nthe dealer shall tender to the lessor, or to the lien holder, or to the\ndesignee of that lessor or lien holder of the vehicle purchased or\nobtained in trade, an amount necessary to discharge the prior credit or\nlease balance owing on the vehicle purchased or obtained in trade within\ntwenty-one calendar days of purchasing or obtaining the vehicle in\ntrade, provided, however, that the dealer may rely upon the amount due\nas stated by the lessor or lien holder.\n  (3) The time period specified in paragraph one or two of this\nsubdivision may be shortened if the dealer and consumer agree, in\nwriting, to a shorter time period.\n  (4) A dealer shall not sell, consign for sale, or transfer any\nownership interest in the vehicle purchased or obtained in trade until\nan amount necessary to discharge the prior credit or lease balance owing\non the vehicle has been tendered to the lessor, or to the lien holder,\nor to the designee of that lessor or lien holder of the vehicle\npurchased or obtained in trade.\n  (c) If the agreement gives either party the right to rescind the\nentire agreement within a reasonable time period, rescission of the\nentire agreement shall effectively rescind the obligations pursuant to\nthis section without violating this section.\n  (d) This section shall not apply to agreements or transactions that\ninvolve a state or federal program in which a dealer is issued a voucher\nto offset the purchase price or lease price for a qualifying lease of a\nnew vehicle upon the surrender of an eligible trade-in vehicle to a\ndealer participating in the program.\n  (e) (1) Every violation of this section shall be deemed a deceptive\nact and practice subject to enforcement under article twenty-two-A of\nthis chapter. In addition, the district attorney, county attorney, and\nthe corporation counsel shall have concurrent authority to seek the\nrelief in paragraph two of this subdivision, and all civil penalties\nobtained in any such action shall be retained by the municipality or\ncounty.\n  (2) In every case where the court shall determine that a violation of\nthis section has occurred, it may impose a civil penalty of not more\nthan five thousand dollars for each violation. Such penalty shall be in\naddition to any denial of registration or renewal, suspension of\nregistration or revocation of registration or assessment of a fine\nauthorized by subdivision nine of section four hundred fifteen of the\nvehicle and traffic law.\n  (3) Nothing in this section shall be construed to restrict any right\nwhich any person may have under any other statute or the common law.\n  (4) No dealer shall be deemed to have violated the provisions of this\nsection if such dealer shows, by a preponderance of the evidence, that\nthe violation was not intentional and resulted from a bona fide error\nmade notwithstanding the maintenance of procedures reasonably adopted to\navoid such error.\n  (f) Any person who is convicted of knowingly violating paragraph four\nof subdivision (b) of this section shall be guilty of a class A\nmisdemeanor.\n  (g) If any part or provision of this section or the application\nthereof to any person or circumstances be adjudged invalid by any court\nof competent jurisdiction, such judgment shall be confined in its\noperations to the part, provision or application directly involved in\nthe controversy in which such judgment shall have been rendered and\nshall not affect or impair the validity of the remainder of this section\nor the application thereof to other persons or circumstances.\n