EIGHTEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
First R egular Session 
)
S E N A T E
s. No. 659
tA-
l ^ y © U K r  ot
-19 
JUL 22 
P2--07
Intro d u ce d  by SENATOR RAMON BONG REVILLA, JR.
RECEl
AN ACT
REQUIRING USED CAR DEALERS TO PROVIDE CONSUMERS W ITH A 
WRITTEN WARRANTY AGAINST DEFECTS AND REQUIRING PRIVATE 
SELLERS TO DISCLOSE ANY KNOWN USE OR SAFETY DEFECTS
EXPLANATORY NOTE
Article 16, Section 9 o f the 1987 Philippine Constitution states that; "The State 
shall protect consumers from  the trade malpractices and from  substandard or 
hazardous products".
In the recently passed Philippine Lemon Law1, the State declared as policy the 
prom otion and full protection o f the rights of consumers in the sale o f m otor vehicles 
against business and trade practices which are deceptive, unfair or otherwise inimical 
to consumers and the public interest.
The State recognized th a t a m otor vehicle is a m ajor consumer purchase 
investm ent. Hence, the rights o f consumers should be clearly defined, including the 
means o f redress for violations thereof.
In the Philippines, the purchase o f a new car usually carries a m anufacturer's 
warranty. On the other hand, vendors o f used cars do not usually issue any express 
warranty. W hile the new Philippine Lemon Law protects buyers o f brand new cars, it's 
far m ore common fo r used-car buyers to get stuck with used-car w ith defects. A "used 
car", also known as a pre-owned vehicle and second-hand car, is a vehicle tha t 
previously had one or more owners. Used cars are usually sold through car dealers, 
leasing companies, auctions and private party sales.
Since brand new cars are still considered prohibitive for the middle class, many 
resort to purchasing used cars. Unfortunately, w ithout mechanical expertise, buyers 
cannot easily distinguish which used cars have defects. Vendors are not required to 
disclose the history o f the cars they sell. Thus, many used cars through seemingly in 
good running condition, could have been im properly maintained or poorly repaired.
1 R e p u b lic  A c t N o . 1 0 6 4 2 , S e c tio n  2.


been unprofessionally rebuilt after a collision or tam pered w ith in some m anner to 
conceal high mileage, mechanical defects, corrosion or other damage. Some o f these 
used lemons are even sold fraudulently, preying on the m ost vulnerable low-income 
car purchasers of the population.
This bill seeks to  protect consumers who bought used vehicles from  a dealer or 
private party. I t  requires dealers to provide consumers with a w ritten w arranty against 
defects th a t im pair the vehicle's use or safety, and requires private parties to disclose 
any known use or safety defects.
Dealer warranties cannot be waived under any circumstances. The dealer must 
give a signed, dated, correct copy o f the limited used vehicle w arranty at the tim e of 
purchase o f the vehicle. The w arranty requires the dealer to repair any defect th a t 
impairs the vehicle's use or safety. The coverage depends on the mileage o f the vehicle 
at the tim e o f purchase as outlined below:
M ileage
W arranty Period
Less than 64,500 km.
90 days or 6,035 km., whichever comes first
64,500 to 128,746 km.
60 days or 4,023 km., whicheyer comes first
128,747 to 201,167 km.
30 days or 2,012 km., whicheyer comes first
201,168 km. or over
No express warranty
I f  the true mileage o f the vehicle is unknown at the tim e o f the sale, the 
w arranty period is calculated according to  the age o f the vehicles as outlined below:
Age o f Vehicle
W arranty Period
3 years old or less
90 days or 6,035 km., whichever comes first
More than 3 and less than 6 years old
60 days or 4,023 km., whichever comes first
More than 6 years old
30 days or 2,012 km., whichever comes first
Though our country allows private enterprises and individuals to enter into 
contracts freely, the state should come in when necessary to protect the interests of 
the consumer, prom ote his general welfare and establish standards o f conduct for 
business and industry.2
Foregoing considered, im m ediate passage o f this Bill is sought.
RAMON BONG REVILLA, 3R.
7 T h is  b ill w a s  o r ig in a lly  file d  d u rin g  th e  F ifte e n th  C o n g re s s , F irs t R e g u la r S e ssio n , a n d  s u b s e q u e n tly  re file d  b y 
M ir ia m  D e fe n s o r-S a n tia g o  d u rin g  th e  S ix te e n th  C o n g re s s , T h ird  R e g u la r S e ssio n


EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
S E N A T E
S. No. 
659
fF O T }'
; ■ -«(. . of t:;r 
"  i
In tro d u ce d  by SENATOR RAMON BONG REVILLA, JR.
______________________________________________________________’19 
JllL 77
AN ACT
REQUIRING USED CAR DEALERS TO PROVIDE CONSUMERS W ITH A 
WRITTEN WARRANTY AGAINST DEFECTS AND 
rI$ U  I  RING PRIVATE 
SELLERS TO DISCLOSE ANY KNOWN USE OR SAFETY DEFECTS
Be it  enacted b y  th e  Senate a n d  House o f  Representatives o f  the Philippines in 
Congress assembled:
1 
Section 1. S hort Tide. -  This Act shall be known as the "Used Car Lemon Act
2 
o f 2019".
3 
Sec. 2. Declaration o f  Policy. -  I t  is hereby declared the policy o f the State to
4 
prom ote full protection to the rights o f consumers in the sale o f m otor vehicles against
5 
sales and trade practices which are deceptive, unfair or otherwise inimical to the
6 
consumers and the public interest.
7 
The State recognizes th a t a m otor vehicle, including a second-hand one, is a
8 
m ajor consumer purchase or investm ent. The consumer rights should thus be clearly
9 
defined including the means for redress fo r violations thereof.
10 
Sec. 3. Definitions. -  For the purposes o f this Act, the term s:
11 
A. "Consum er" refers to a buyer, other than fo r purposes o f resale, o f a m otor
12 
vehicle, any person to  whom such m otor vehicle is transferred during the period
13 
o f any express o f statutory w arranty under this Act applicable to such m otor
14 
vehicle, and any other person entitled by the term s o f such w arranty to enforce
15 
its obligations;
16 
B. "D ealer" refers to any person engaged in the business o f selling, offering for
17 
sale or negotiating the retail sale o f used m otor vehicles or selling m otor
18 
vehicles as broker or agent or negotiating the retail sale o f used m otor vehicles
19 
or selling m otor vehicles as broker or agent fo r another, including the officers,
20 
agents and employees o f such person and any com bination or association o f


1 
dealers, but not including a bank or other financial institution, or the
2 
com m onwealth, its agencies, bureaus, boards, commissions, authorities, nor
3 
any o f its political subdivisions. A person shall be deemed to be engaged in the
4 
business o f selling used m otor vehicles if such person has sold more than three
5 
used m otor vehicles in the preceding tw elve months;
6 
C. "D T I" refers to the Departm ent o f Trade and Industry;
7 
D. "M otor vehicle" refers to any self-propelled fou r (4)-wheeled road vehicle
8 
designed to carry passengers including, but not limited to, sedans, coupes,
9 
station wagons, convertibles, pickups, vans, sport utility vehicles (SUVs) and
10 
Asian utility vehicles (AUVs) but excepting motorcycles, delivery trucks, dump
11 
trucks, buses, road rollers, trolley cars, street sweepers, sprinklers, lawn
12 
movers and heavy equipm ent, such as, but not lim ited to, bulldozers, pay
13 
loaders, graders, forklifts, amphibian trucks, cranes and vehicles which run only
14 
on rails or tracks, and tractors, trailers and traction engines o f all kinds used
15 
exclusively for agricultural purposes. Trailers having any num ber o f wheels,
16 
when propelled or intended by attachm ent to a m otor vehicle, shall be classified
17 
as separate m otor vehicle w ith no power rating.
18 
E. "Private seller" refers to  any seller who is not a dealer and who offers to sell or
19 
sells a used m otor vehicle to a consumer;
20 
F. "Purchase price" refers to the invoice price or the am ount o f money which the
21 
dealer or retailer actually received fo r the used m otor vehicle, in consideration
22 
o f the sale o f such brand new m otor vehicle;
23 
G. "Repurchase price", the purchase price, as defined above, less any cash award
24 
th a t was made by the dealer in an attem pt to resolve the dispute and was
25 
accepted by the consumer, and less any refunds or rebates to which the
26 
consumer is entitled, plus any incidental damages not previously reimbursed,
27 
including but not lim ited to the reasonable costs of tow ing from  point o f
28 
breakdown to obtain required repairs or to return the vehicle under this section,
29 
and the reasonable costs o f obtaining alternative transportation during the
30 
applicable w arranty period after the second day following each such breakdown


1 
not to exceed five hundred pesos (PhpSOO.OO) vehicle rental charges fo r each
2 
day in which the cost o f such alternative transportation is reimbursable;
3 
H. "Secretary" refers to the Secretary o f the Departm ent o f Trade and Industry;
4 
I. "Used m otor vehicle or "used vehicle", any m otor vehicle as defined above,
5 
previously owned by anyone other than the consumer, which has been driven
6 
more than the limited use necessary in moving or road testing a new vehicle
7 
prior to delivery to a consumer.
8 
Sec. 4. Sales accom panied b y  w ritten w arrant -
9 
A. No used m otor vehicle shall be sold by a dealer to a consumer unless
10 
accompanied by an express w ritten w arranty covering the full cost of both parts
11 
and labor necessary to a repair a defect existing at the point of sale tha t impairs
12 
the said used m otor vehicle's safety or use;
13 
B. Dealer warranties cannot be waived under any circumstances;
14 
C. Defects th a t affect only appearance shall not be deemed to im pair safety or use
15 
fo r the purpose o f this section. For the purposes o f this section, defect shall
16 
include defect m alfunction or any com bination or defects or malfunctions;
17 
D. Defects or m alfunctions which involve parts or com ponents th a t are covered or
18 
are warranted under an express w arranty issued by the dealer o f the used
19 
m otor vehicle shall be excluded from  this Section if the following conditions
20 
have been met:
21 
i. 
the m anufacturer's w arranty has been duly assigned or transferred
22 
to the buyer;
23 
ii. the m anufacturer's w arranty is enforceable according to  its term s;
24 
iii. the m anufacturer's w arranty is not inconsistent w ith this section; and
25 
iv. 
the seller 
has assured th a t the repair authorized 
by such
26 
m anufacturer's express warranty was made;
27 
E. The term s of the seller's warranty shall be tolled fo r any period o f tim e the used
28 
m otor vehicle is out o f service by the reason o f repair under the m anufacturer's
29 
warranty.
30 
Sec. 5. Duration o f  warranty. -  The express warranties required by this sections
31 
shall be o f the following durations:


1 
A. For a used m otor vehicle which, at the tim e o f sale, has been operated less
2 
than 64,500 kilometers, the w arranty shall be fo r ninety days or 6,035
3 
kilometers, whichever occurs first;
4 
B. For a used m otor vehicle which, at the tim e o f sale, has been operated sixty-
5 
four thousand five hundred kilom eters (64,500) or more, but less than one
6 
hundred tw enty-eight thousand and seven hundred forty-seven kilometers
7 
(128,747 km .), the warranty shall be fo r sixty (60) days or, four thousand and
8 
tw enty-three kilom eters (4,023 km .), whichever comes first;
9 
C. For a used m otor vehicle which, at the tim e o f sale, has been operated one
10 
hundred tw enty-eight thousand and seven hundred forty-seven (128,747 km .),
11 
or more, but less than tw o hundred one thousand and one hundred sixty-eight
12 
kilom eters (201,168 km .), th irty (30) days or tw o thousand and twelve
13 
kilom eters (2,012 km .), whichever occurs first;
14 
D. I f  the used m otor vehicle's true mileage is not known, such w arranty period
15 
shall be determ ined by the age o f said used m otor vehicle in the following
16 
manner: a used m otor vehicle three (3) years old or less shall have a w arranty
17 
as provided in paragraph (A); a used m otor vehicle more than three (3), but
18 
less than six (6) years old, shall have a w arranty provided in paragraph (B);
19 
and a used m otor vehicle si (6) years old or more shall have a w arranty as
20 
provided in paragraph (C). A used m otor vehicle's age shall be determ ined by
21 
subtracting its model year from  the year in which the w arranty holder
22 
purchased said used vehicle;
23 
E. The w arranty periods established by this section shall be tolled during any
24 
period in which the used m otor vehicle is out o f service as a result o f any repair
25 
attem pt pursuant to  any w arranty created by this section. The applicable
26 
w arranty period shall be extended th irty (30) days from  the date of completion
27 
of any repair required by this section as to the defect repaired if the warranty
28 
would otherwise have expired during such period.
29 
Sec. 6. Repair o f  defect. -


1 
A. A dealer may repair, w ithin the meaning o f this section, either by perform ing
2 
the repair him self or by arranging and making paym ent fo r prom pt repair by
3 
another;
4 
B. A consumer shall return a vehicle fo r repair under this section by presenting it
5 
to the dealer no later than five business days after the expiration of the
6 
applicable w arranty period and inform ing him o f the defect. Said return period
7 
shall be tolled during any tim e period in which the consumer has notified the
8 
dealer o f the defect but cannot reasonably present the vehicle to the dealer;
9 
including, but not lim ited to, the reason tha t a used m otor vehicle is inoperable
10 
and the dealer refuses to pay the charge to tow  said vehicle. The dealer shall
11 
im m ediately accept return o f a vehicle when it is so presented. Said used m otor
12 
vehicle shall be deemed out o f service commencing the day it is presented,
13 
notwithstanding any dealer's failure to accept its return on said day. During the
14 
applicable w arranty period and the aforesaid return period, the dealer shall pay
15 
the reasonable costs o f tow ing from  point o f breakdown up to forty-eight
16 
kilom eters (48km .) to obtain required repairs or to return the vehicle to the
17 
dealer;
18 
C. Upon return o f the used m otor vehicle to the consumer after repair, the dealer
19 
shall provide the consumer w ith a warranty repair receipt describing;
20 
(1) the defect complained of;
21 
(2) the w ork perform ed in an attem pt to correct such defect and the identity if
22 
the repairer if it is not the dealer; and
23 
(3) the parts replaced in perform ing such work.
24 
For the dealer to toll the ten (10) business day period as provided in paragraph
25 
(D) o f this section, said dealer shall attach to each such w arranty repair receipt
26 
copies o f such older form s, invoices, receipts or other evidence o f a parts order
27 
and its receipt to evidence his compliance w ith this paragraph;
28 
D. I f  the dealer fails to repair the same defect w ithin three attem pts, or if the used
29 
m otor vehicle is out o f service fo r more than a cum ulative total o f ten business
30 
days after the consumer has returned it to the dealer fo r repair o f the same,
31 
then the dealer shall accept return o f the vehicle from  the consumer and refund


1 
the full repurchase price, less a reasonable allowance fo r use. A reasonable
2 
allowance fo r use shall be ten pesos (PhplO.OO) per kilom eter if the m otor
3 
vehicle has been operated between its sale and the dealer's repurchase;
4 
E. A consumer shall have the option o f retaining the use of any vehicle returned
5 
under the provisions o f this section, shall, in instances in which a refund is
6 
tendered, be reflected in the above-m entioned reasonable allowance fo r use;
7 
F. A used m otor vehicle shall not be considered out o f service fo r purposes o f the
8 
ten business-day period described hereinabove fo r any day in which a part
9 
necessary to repair a defect complained o f it is not in the dealer's possession;
10 
provided, however, th a t the dealer has ordered the part by reasonable means
11 
on the same day on which he knew or should have known th a t the part was
12 
necessary, except th a t in no event shall a part's unavailability operate to toll
13 
the ten business-day period fo r m ore than tw enty-one days. The applicable
14 
w arranty period shall be extended by the num ber o f days a part is unavailable;
15 
Sec. 7. Option o f  vendor to repurchase. -  At any tim e w ithin the applicable
16 
warranty period and after a consumer has complained o f a defect, notwithstanding
17 
any objection from  the consumer, the dealer shall have the option o f repurchasing a
18 
used vehicle and refunding the full repurchase price, less a reasonable allowance for
19 
use. A reasonable allowance fo r us shall be fifteen cents fo r each mile the used m otor
20 
vehicle had been operated between its sale and the dealer's repurchase.
21 
I f  the dealer is required to  or elects to repurchase a vehicle under the term s of
22 
this section, the consumer and dealer shall cooperate with each other to execute all
23 
necessary docum ents in order to clear the title o f any encumbrances on the
24 
repurchased vehicle.
25 
Sec. 8. Private sellers. -  A private seller shall clearly disclose to any prospective
26 
buyer, before the sale is completed, all defects the seller knows o f which im pair the
27 
used m otor vehicle's safety or substantially im pair its use. Failure to so disclose known
28 
defects shall entitle the buyer, w ithin th irty  (30) days after the sale, to rescind the sale
29 
and be entitled to return o f all monies paid to  the seller less a reasonable am ount for
30 
use as defined in clause (iv) o f paragraph (A) subsection (3). A reasonable allowance


1 
fo r use shall be ten pesos per kilom eter the m otor vehicle had been operated between
2 
its sale and the seller's repurchase.
3 
In any subsequent action by a buyer under this section, it shall be an affirm ative
4 
defense in any such action th a t an alleged defect does not im pair the vehicle's safety,
5 
or substantially im pair its use, or th a t it is the result o f the buyer's negligence, abuse,
6 
damage caused by accident, vandalism, or attem pt to m odify the vehicle.
7 
Sec. 9. Im plem enting Agency and its  duties. -  The DTI Secretary shall, within
8 
sixty (60) days from  the effectivity o f this Act, prom ulgate rules and regulations,
9 
including those o f disciplinary nature, to carry out and enforce the provisions o f this
10 
Act. Further, the DTI shall be the lead agency in carrying out the provisions o f this
11 
Act.
12 
Sec. 10. Assistance b y other agencies. -  The DOTC and other agencies, political
13 
subdivisions and local governm ent units, including governm ent-owned and controlled
14 
corporations, shall render such assistance as required by the DTI in order to effectively
15 
im plem ent the provisions o f this Act.
16 
Sec. 11. Penalties. -  The dealer adjudged to have violated the provisions in this
17 
Act shall be liable to pay a m inim um  am ount o f One Hundred Thousand Pesos
18 
(P hpl00,000.00) as damages to the aggrieved party w ithout prejudice to any civil or
19 
a im in a l liability they and/or the responsible officer may incur under existing laws.
20 
Sec. 12. O ther Remedies. -  No provisions o f this Act shall be construed to lim it
21 
the remedies available to the dealer or buyer under any other provision o f law.
22 
Sec. 13. Separability Clause. -  I f  any provision or part hereof is held invalid or
23 
unconstitutional, the same shall not affect the validity and effectivity of the other
24 
provisions hereof.
25 
Sec. 14. Repealing Clause. -  All laws, decrees, orders, and issuances, or
26 
portions thereof, which are inconsistent w ith the provisions o f this Act, are hereby
27 
repealed, amended, or m odified accordingly.
28 
Sec. 15. E ffectivity Clause. -  This Act shall take effect fifteen (15) days after its
29 
publication in the Official Gazette or in tw o (2) newspapers o f general circulation.
30
31 
Approved,