N.Y. GBS Law § 198-B — New York Code / Act GBS / Article 11-A / Section 198-B
Sale or lease of used motor vehicles
Status: in_force

§ 198-b. Sale or lease of used motor vehicles. a. Definitions. As used\nin this section, the following words shall have the following meanings:\n  1. "Consumer" means the purchaser, or lessee, other than for purposes\nof resale, of a used motor vehicle primarily used for personal, family,\nor household purposes and subject to a warranty, and the spouse or child\nof the purchaser or the lessee if either such motor vehicle or the lease\nof such motor vehicle is transferred to the spouse or child during the\nduration of any warranty applicable to such motor vehicle, and any other\nperson entitled by the terms of such warranty to enforce the obligations\nof the warranty;\n  2. "Used motor vehicle" means a motor vehicle, excluding motor homes\nand off-road vehicles, which has been purchased, leased, or transferred\neither after eighteen thousand miles of operation or two years from the\ndate of original delivery, whichever is earlier;\n  3. "Dealer" means any person or business which sells, offers for sale,\nleases or offers for lease a used vehicle after selling, offering for\nsale, leasing or offering for lease three or more used vehicles in the\nprevious twelve month period, but does not include:\n  (a) a bank or financial institution except in the case of a lease of a\nused motor vehicle,\n  (b) a business selling a used vehicle to an employee of that business,\n  (c) a regulated public utility which sells at public auction vehicles\nused in the ordinary course of its operations, provided that any\nadvertisements of such sales conspicuously disclose the "as is" nature\nof the sale,\n  (d) the sale of a leased vehicle to that vehicle's lessee, a family\nmember of the lessee, or an employee of the lessee, or\n  (e) the state, its agencies, bureaus, boards, commissions and\nauthorities, and all of the political subdivisions of the state,\nincluding the agencies and authorities of such subdivisions;\n  4. "Warranty" means any undertaking in connection with the sale or\nlease by a dealer of a used motor vehicle to refund, repair, replace,\nmaintain or take other action with respect to such used motor vehicle\nand provided at no extra charge beyond the price of the used motor\nvehicle;\n  5. "Service contract" means a contract in writing for any period of\ntime or any specific mileage to refund, repair, replace, maintain or\ntake other action with respect to a used motor vehicle and provided at\nan extra charge beyond the price of the used motor vehicle or of the\nlease contract for the used motor vehicle;\n  6. "Repair insurance" means a contract in writing for any period of\ntime or any specific mileage to refund, repair, replace, maintain or\ntake other action with respect to a used motor vehicle and which is\nregulated by the department of financial services.\n  b. Written warranty required; terms. 1. No dealer shall sell or lease\na used motor vehicle to a consumer without giving the consumer a written\nwarranty which shall at minimum apply for the following terms:\n  (a) If the used motor vehicle has thirty-six thousand miles or less,\nthe warranty shall be at minimum ninety days or four thousand miles,\nwhichever comes first.\n  (b) If the used motor vehicle has more than thirty-six thousand miles,\nbut less than eighty thousand miles, the warranty shall be at minimum\nsixty days or three thousand miles, whichever comes first.\n  (c) If the used motor vehicle has eighty thousand miles or more but no\nmore than one hundred thousand miles, the warranty shall be at a minimum\nthirty days or one thousand miles, whichever comes first.\n  2. The written warranty shall require the dealer or his agent to\nrepair or, at the election of the dealer, reimburse the consumer for the\nreasonable cost of repairing the failure of a covered part. Covered\nparts shall at least include the following items:\n  (a) Engine. All lubricated parts, water pump, fuel pump, manifolds,\nengine block, cylinder head, rotary engine housings and flywheel.\n  (b) Transmission. The transmission case, internal parts, and the\ntorque converter.\n  (c) Drive axle. Front and rear drive axle housings and internal parts,\naxle shafts, propeller shafts and universal joints.\n  (d) Brakes. Master cylinder, vacuum assist booster, wheel cylinders,\nhydraulic lines and fittings and disc brake calipers.\n  (e) Radiator.\n  (f) Steering. The steering gear housing and all internal parts, power\nsteering pump, valve body, piston and rack.\n  (g) Alternator, generator, starter, ignition system excluding the\nbattery.\n  3. Such repair or reimbursement shall be made by the dealer\nnotwithstanding the fact that the warranty period has expired, provided\nthe consumer notifies the dealer of the failure of a covered part within\nthe specified warranty period.\n  4. The written warranty may contain additional language excluding\ncoverage:\n  (a) for a failure of a covered part caused by a lack of customary\nmaintenance;\n  (b) for a failure of a covered part caused by collision, abuse,\nnegligence, theft, vandalism, fire or other casualty and damage from the\nenvironment (windstorm, lightning, road hazards, etc.);\n  (c) if the odometer has been stopped or altered such that the\nvehicle's actual mileage cannot be readily determined or if any covered\npart has been altered such that a covered part was thereby caused to\nfail;\n  (d) for maintenance services and the parts used in connection with\nsuch services such as seals, gaskets, oil or grease unless required in\nconnection with the repair of a covered part;\n  (e) for a motor tuneup;\n  (f) for a failure resulting from racing or other competition;\n  (g) for a failure caused by towing a trailer or another vehicle unless\nthe used motor vehicle is equipped for this as recommended by the\nmanufacturer;\n  (h) if the used motor vehicle is used to carry passengers for hire;\n  (i) if the used motor vehicle is rented to someone other than the\nconsumer as defined in paragraph one of subdivision a of this section;\n  (j) for repair of valves and/or rings to correct low compression\nand/or oil consumption which are considered normal wear;\n  (k) to the extent otherwise permitted by law, for property damage\narising or allegedly arising out of the failure of a covered part; and\n  (l) to the extent otherwise permitted by law, for loss of the use of\nthe used motor vehicle, loss of time, inconvenience, commercial loss or\nconsequential damages.\n  c. Failure to honor warranty. 1. If the dealer or his agent fails to\ncorrect a malfunction or defect as required by the warranty specified in\nthis section which substantially impairs the value of the used motor\nvehicle to the consumer after a reasonable period of time, the dealer\nshall accept return of the used motor vehicle from the consumer and\nrefund to the consumer the full purchase price, or in the case of a\nlease contract all payments made under the contract, including sales or\ncompensating use tax, less a reasonable allowance for any damage not\nattributable to normal wear or usage, and adjustment for any\nmodifications which either increase or decrease the market value of the\nvehicle or of the lease contract, and in the case of a lease contract,\nshall cancel all further payments due from the consumer under the lease\ncontract. In determining the purchase price to be refunded or in\ndetermining all payments made under a lease contract to be refunded, the\npurchase price, or all payments made under a lease contract, shall be\ndeemed equal to the sum of the actual cash difference paid for the used\nmotor vehicle, or for the lease contract, plus, if the dealer elects to\nnot return any vehicles traded-in by the consumer, the wholesale value\nof any such traded-in vehicles as listed in the National Auto Dealers\nAssociation Used Car Guide, or such other guide as may be specified in\nregulations promulgated by the commissioner of motor vehicles, as\nadjusted for mileage, improvements, and any major physical or mechanical\ndefects in the traded-in vehicle at the time of trade-in. The dealer\nselling or leasing the used motor vehicle shall deliver to the consumer\na written notice including conspicuous language indicating that if the\nconsumer should be entitled to a refund pursuant to this section, the\nvalue of any vehicle traded-in by the consumer, if the dealer elects to\nnot return it to the consumer, for purposes of determining the amount of\nsuch refund will be determined by reference to the National Auto Dealers\nAssociation Used Car Guide wholesale value, or such other guide as may\nbe approved by the commissioner of motor vehicles, as adjusted for\nmileage, improvements, and any major physical or mechanical defects,\nrather than the value listed in the sales contract. Refunds shall be\nmade to the consumer and lienholder, if any, as their interests may\nappear on the records of ownership kept by the department of motor\nvehicles. If the amount to be refunded to the lienholder will be\ninsufficient to discharge the lien, the dealer shall notify the consumer\nin writing by registered or certified mail that the consumer has thirty\ndays to pay the lienholder the amount which, together with the amount to\nbe refunded by the dealer, will be sufficient to discharge the lien. The\nnotice to the consumer shall contain conspicuous language warning the\nconsumer that failure to pay such funds to the lienholder within thirty\ndays will terminate the dealer's obligation to provide a refund. If the\nconsumer fails to make such payment within thirty days, the dealer shall\nhave no further responsibility to provide a refund under this section.\nAlternatively, the dealer may elect to offer to replace the used motor\nvehicle with a comparably priced vehicle, with such adjustment in price\nas the parties may agree to. The consumer shall not be obligated to\naccept a replacement vehicle, but may instead elect to receive the\nrefund provided under this section. It shall be an affirmative defense\nto any claim under this section that:\n  (a) The malfunction or defect does not substantially impair such\nvalue; or\n  (b) The malfunction or defect is the result of abuse, neglect or\nunreasonable modifications or alterations of the used motor vehicle.\n  2. It shall be presumed that a dealer has had a reasonable opportunity\nto correct a malfunction or defect in a used motor vehicle, if:\n  (a) The same malfunction or defect has been subject to repair three or\nmore times by the selling or leasing dealer or his agent within the\nwarranty period, but such malfunction or defect continues to exist; or\n  (b) The vehicle is out of service by reason of repair or malfunction\nor defect for a cumulative total of fifteen or more days during the\nwarranty period. Said period shall not include days when the dealer is\nunable to complete the repair because of the unavailability of necessary\nrepair parts. The dealer shall be required to exercise due diligence in\nattempting to obtain necessary repair parts. Provided, however, that if\na vehicle has been out of service for a cumulative total of forty-five\ndays, even if a portion of that time is attributable to the\nunavailability of replacement parts, the consumer shall be entitled to\nthe replacement or refund remedies provided in this section.\n  3. The term of any warranty, service contract or repair insurance\nshall be extended by any time period during which the used motor vehicle\nis in the possession of the dealer or his duly authorized agent for the\npurpose of repairing the used motor vehicle under the terms and\nobligations of said warranty, service contract or repair insurance.\n  4. The term of any warranty, service contract or repair insurance, and\nthe fifteen day out-of-service period, shall be extended by any time\nduring which repair services are not available to the consumer because\nof a war, invasion or strike, fire, flood or other natural disaster.\n  d. Waiver void. 1. Any agreement entered into by a consumer for the\npurchase or lease of a used motor vehicle which waives, limits or\ndisclaims the rights set forth in this article shall be void as contrary\nto public policy. Further, if a dealer fails to give the written\nwarranty required by this article, the dealer nevertheless shall be\ndeemed to have given said warranty as a matter of law.\n  2. Nothing in this section shall in any way limit the rights or\nremedies which are otherwise available to a consumer under any other\nlaw.\n  3. Notwithstanding paragraph one of this subdivision, this article\nshall not apply to used motor vehicles sold for, or in the case of a\nlease where the value of the used motor vehicle as agreed to by the\nconsumer and the dealer which vehicle is the subject of the contract is,\nless than one thousand five hundred dollars, or to used motor vehicles\nwith over one hundred thousand miles at the time of sale or lease if\nsaid mileage is indicated in writing at the time of sale or lease.\nFurther, this article shall not apply to the sale or lease of historical\nmotor vehicles as defined in section four hundred one of the vehicle and\ntraffic law.\n  e. Time of delivery, location of warranty and notice. The written\nwarranty provided for in subdivision b of this section and the written\nnotice provided for in subdivision c of this section shall be delivered\nto the consumer at or before the time the consumer signs the sales or\nlease contract for the used motor vehicle. The warranty and the notice\nmay be set forth on one sheet or on separate sheets. They may be\nseparate from, attached to, or a part of the sales or lease contract. If\nthey are part of the sales or lease contract, they shall be separated\nfrom the other contract provisions and each headed by a conspicuous\ntitle.\n  f. Arbitration and enforcement. 1. If a dealer has established or\nparticipates in an informal dispute settlement procedure which complies\nin all respects with the provisions of part seven hundred three of title\nsixteen of the code of federal regulations the provisions of this\narticle concerning refunds or replacement shall not apply to any\nconsumer who has not first resorted to such procedure. Dealers utilizing\ninformal dispute settlement procedures pursuant to this subdivision\nshall insure that arbitrators participating in such informal dispute\nsettlement procedures are familiar with the provisions of this section\nand shall provide to arbitrators and consumers who seek arbitration a\ncopy of the provisions of this section together with the following\nnotice in conspicuous ten point bold face type:\n                    USED CAR LEMON LAW BILL OF RIGHTS\n  1. If you purchase a used car for more than one thousand five hundred\ndollars, or lease a used car where you and the dealer have agreed that\nthe car's value is more than one thousand five hundred dollars, from\nanyone selling or leasing three or more used cars a year, you must be\ngiven a written warranty.\n  2. If your used car has 18,000 miles or less, you may be protected by\nthe new car lemon law.\n  3. (a) If your used car has more than 18,000 miles and up to and\nincluding 36,000 miles, a warranty must be provided for at least 90 days\nor 4,000 miles, whichever comes first.\n  (b) If your used car has more than 36,000 miles but less than 80,000\nmiles, a warranty must be provided for at least 60 days or 3,000 miles,\nwhichever comes first.\n  (c) If your used car has 80,000 miles or more but no more than 100,000\nmiles, a warranty must be provided for at least 30 days or 1,000 miles,\nwhichever comes first. Cars with over 100,000 miles are not covered.\n  4. If your engine, transmission, drive axle, brakes, radiator,\nsteering, alternator, generator, starter, or ignition system (excluding\nthe battery) are defective, the dealer or his agent must repair or, if\nhe so chooses, reimburse you for the reasonable cost of repair.\n  5. If the same problem cannot be repaired after three or more\nattempts, you are entitled to return the car and receive a refund of\nyour purchase price or of all payments made under your lease contract,\nand of sales tax and fees, minus a reasonable allowance for any damage\nnot attributable to normal usage or wear, and, in the case of a lease\ncontract, a cancellation of all further payments you are otherwise\nrequired to make under the lease contract.\n  6. If your car is out of service to repair a problem for a total of\nfifteen days or more during the warranty period you are entitled to\nreturn the car and receive a refund of your purchase price or of all\npayments made under your lease contract, and of sales tax and fees,\nminus a reasonable allowance for any damage not attributable to normal\nusage or wear, and, in the case of a lease contract, a cancellation of\nall further payments you are otherwise required to make under the lease\ncontract.\n  7. A dealer may put into the written warranty certain provisions which\nwill prohibit your recovery under certain conditions; however, the\ndealer may not cause you to waive any rights under this law.\n  8. A dealer may refuse to refund your purchase price, or the payments\nmade under your lease contract, if the problem does not substantially\nimpair the value of your car, or if the problem is caused by abuse,\nneglect, or unreasonable modification.\n  9. If a dealer has established an arbitration procedure, the dealer\nmay refuse to refund your purchase price until you first resort to the\nprocedure. If the dealer does not have an arbitration procedure, you may\nresort to any remedy provided by law and may be entitled to your\nattorney's fees if you prevail.\n  10. As an alternative to the arbitration procedure made available\nthrough the dealer you may instead choose to submit your claim to an\nindependent arbitrator, approved by the attorney general. You may have\nto pay a fee for such an arbitration. Contact your local consumer office\nor attorney general's office to find out how to arrange for independent\narbitration.\n  11. If any dealer refuses to honor your rights or you are not\nsatisfied by the informal dispute settlement procedure, complain to the\nNew York State Attorney General, Executive Office, Capitol, Albany, N.Y.\n12224.\n  2. A dealer shall have up to thirty days from the date of notice by\nthe consumer that the arbitrator's decision has been accepted to comply\nwith the terms of such decision. Provided, however, that nothing\ncontained in this subdivision shall impose any liability on a dealer\nwhere a delay beyond the thirty day period is attributable to a consumer\nwho has requested a particular replacement vehicle or otherwise made\ncompliance impossible within said period.\n  3. Upon the payment of a prescribed filing fee, a consumer shall have\nthe option of submitting any dispute arising under this section to an\nalternate arbitration mechanism established pursuant to regulations\npromulgated hereunder by the attorney general. Upon application of the\nconsumer and payment of the filing fee, the dealer shall submit to such\nalternate arbitration.\n  Such alternate arbitration shall be conducted by a professional\narbitrator or arbitration firm appointed by and under regulations\nestablished by the attorney general. Such mechanism shall ensure the\npersonal objectivity of its arbitrators and the right of each party to\npresent its case, to be in attendance during any presentation made by\nthe other party and to rebut or refute such presentation. In all other\nrespects, such alternate arbitration mechanism shall be governed by\narticle seventy-five of the civil practice law and rules.\n  The notice required by paragraph one of this subdivision, entitled\nUsed Car Lemon Law Bill of Rights, shall be provided to arbitrators and\nconsumers who seek arbitration under this subdivision.\n  A dealer shall have thirty days from the date of mailing of a copy of\nthe arbitrator's decision to such dealer to comply with the terms of\nsuch decision. Failure to comply within the thirty day period shall\nentitle the consumer to recover, in addition to any other recovery to\nwhich he may be entitled, a fee of twenty-five dollars for each business\nday beyond thirty days up to five hundred dollars; provided however,\nthat nothing in this subdivision shall impose any liability on a dealer\nwhere a delay beyond the thirty day period is attributable to a consumer\nwho has requested a particular replacement vehicle or otherwise made\ncompliance impossible within said period.\n  The commissioner of motor vehicles or any person deputized by him may\ndeny the application of any person for registration under section four\nhundred fifteen of the vehicle and traffic law and suspend or revoke a\nregistration under such section or refuse to issue a renewal thereof if\nhe or such deputy determines that such applicant or registrant or any\nofficer, director, stockholder, or partner, or any other person directly\nor indirectly interested in the business has deliberately failed to pay\nan arbitration award, which has not been stayed or appealed, rendered in\nan arbitration proceeding pursuant to this paragraph for sixty days\nafter the date of mailing of a copy of the award to the registrant. Any\naction taken by the commissioner of motor vehicles pursuant to this\nparagraph shall be governed by the procedures set forth in subdivision\nnine of section four hundred fifteen of the vehicle and traffic law.\n  4. In no event shall a consumer who has resorted to an informal\ndispute settlement procedure be precluded from seeking the rights or\nremedies available by law.\n  5. In an action brought to enforce the provisions of this article, the\ncourt may award reasonable attorney's fees to a prevailing plaintiff or\nto a consumer who prevails in any judicial action or proceeding arising\nout of an arbitration proceeding held pursuant to paragraph three of\nthis subdivision. In the event a prevailing plaintiff is required to\nretain the services of an attorney to enforce collection of an award\ngranted pursuant to this section, the court may assess against the\ndealer reasonable attorney's fees for services rendered to enforce\ncollection of said award.\n  6. Any action brought pursuant to this article shall be commenced\nwithin four years of the date of original delivery of the used motor\nvehicle to the consumer.\n  g. Notice of consumer rights. At the time of purchase or lease of a\nused motor vehicle from a dealer in this state, the dealer shall provide\nto the consumer a notice, printed in not less than eight point bold face\ntype, entitled "Used Car Lemon Law Bill of Rights". The text of such\nnotice shall be identical with the notice required by paragraph one of\nsubdivision f of this section.\n