REPUBLIC of the PHILIPPINES
Quezon City

Seventeenth Congress
Second Regular Session

HOUSE BILL NO. 7113

Introduced by Representative Federico S. Sandoval II

EXPLANATORY NOTE

This bill seeks to require owners of motor vehicle repair and service centers
to register their business with the Land Transportation Office and submit a report
on the damages and repairs made on the motor vehicles brought to their
establishment.

Purchasing a vehicle is a practical investment, a top priority perhaps second
to purchasingreal property. Owning a motor vehiclemakes a person’s life easier
because of the convenience it gives in going from one place to another. The person
doesn’t have to rely on public transportation for daily commutesandwill enjoy the
liberty and independence that come with having a car. It is a property which may
be resold and traded. Thus, when resold or traded, it should be in its suitable
conditionfor the safety and well-being of the passengers and drivers of the motor
vehicle.

This proposedmeasure aims to protect buyers or transferees ofused motor
vehicles. Firstly, the owners of motor vehicle repair and servicecenters are
requiredto register their business with the Land Transportation Office (LTO) for
proper and easier monitoring especially when an untoward incident happens as a
result of the non-disclosure of any repair done on the used motor vehicle sold.
Secondly, the owners shall also indicate and report to the (LTO) on a monthly
basis all the damages and repairs done on the vehicles brought to their
establishment. The report will then be included in the original registration records
of the motor vehicle for comparison.


Dealers of these used motor vehicles are also required to give an express
written warranty to the consumer or buyer covering the full cost of both parts and
labor necessary to repair a defect existing at the time of sale that impairs the said
motor vehicle’s safety or use. The warranties of the dealer cannot be waived under
any circumstance.

It is also a fact that buyers of used motor vehicles rely heavily on the
odometer reading as an index in determining the condi and value of the motor
vehicle. Prospective buyers would more often than not, assume that the lower the
mileage, the better the condition of the car which is not always the case.
Tampering with the odometer of the motor vehicle is a misrepresentation which
may endanger public safety because the vehicle may not be road-worthy if the
meter reading is not truly reflected. This is not to mention the loss that the buyer
may incur because of the reliance on the tampered odometer.It is imperative to
protect the interest of the consumers, promote their general welfare and establish
standards of conduct in the automotive industry.

In view of the foregoing, approval of this bill is earnestly sought.

EDERICO S. SANDOVAL II


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REPUBLIC of the PHILIPPINES
Quezon City

Seventeenth Congress
Second Regular Session

HOUSE BILL NO. 7113

Introduced by Representative Federico S. Sandoval II

AN ACT
REQUIRING OWNERS OF MOTOR VEHICLE REPAIR AND SERVICE
CENTERS TO REGISTER THEIR BUSINESS WITH THE LAND
TRANSPORTATION OFFICE AND TO SUBMIT REPORT ON THE
DAMAGES AND REPAIRS MADE ON MOTOR VEHICLES BROUGHT
TO THEIR ESTABLISHMENT

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SECTION 1.Short Title. - This Act shall be known as the “Used Motor
Vehicle Buyer's Protection Act.”

SEC. 2.Declaration of Policy. —\t is hereby declared the policy of the State
to afford full protection to consumers in the purchase of motor vehicles whether
new or used. As such, all deceptive, unfair or any other act inimical to the interest
the consumer and the public, especially concerning used motor vehicles, shall be
dealt with accordingly by law.

SEC. 3.Definition of Terms.— As used in this Act:


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(a) Used motor vehiclerefers to a pre-owned vehicle, or a second-hand car
or vehicle that has previously had one or more retail owners which is sold through
a variety of outlets, including franchise and independent car dealers, rental car
companies, leasing offices, auctions, and private party sales;

(b) Motor vehicle refers to any self-propelled four (4)-wheeled road
vehicle designed to carry passengers including sedans, coupes, station wagons,
convertibles, pickups, vans, sports utility vehicles (SUVs) and Asian utility
vehicles (AUVs) but excluding motorcycles, delivery trucks, dump trucks, buses,
road rollers, trolley cars, street sweepers, sprinklers, lawn mowers and heavy
equipment such as bulldozers, payloaders, graders, forklifts, amphibian trucks,
cranes and vehicles which run only on rails or tracks, and tractors trailers and
traction engines of all kinds used exclusively for agricultural purposes. Trailers
having any number of wheels, when propelled or intended by attachment to a
motor vehicle, shall be classified as separate motor vehicle with no power rating;

(c) Motor vehicle service and repair center refers to an establishment
where motor vehicles are repaired by auto mechanics and technicians;

(d) Consumer refers to a buyer, other than for purposes of resale, of a
motor vehicle or any person to whom ownership of a motor vehicle is transferred;

and


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(©) Dealer refers to any person engaged in the business of selling,
offering for sale, or negotiating the retail sale of used motor vehicles or selling
motor vehicles as broker or agent for another, including the officers, agents and
employees of such person and any combination or association of dealers, but not
including a bank or other financial institution, or the commonwealth, its agencies,
bureaus, boards, commissions, authorities, nor any of its political subdivisions. A
person shall be deemed to be engaged in the business of selling used motor
vehicles if such person has sold more than three used motor vehicles in the
preceding twelve months.

SEC. 4.Mandatory Registration of Business and Submission of Report. ~
All owners of motor vehicle repair and servicecenters are required to register their
business with the Land Transportation Office(LTO) and to maintain a record of all
damages and repairs made on the motor vehicles brought in their establishment. A
copy of the records shall be submitted to the LTO every end of the month for
purposes of monitoring and maintaining the repair history of a registered motor
vehicle. The LTO shall include and attach a copy of the repair history in the
registration records of the motor vehicle.

In case of sale, trade in or any other mode of transfer of the used motor

vehicle, consumers may readily refer to the history record available in the LTO.


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SEC.5.Sales with Written Warranty—No used motor vehicle shall be sold by
a dealer to a consumer unless accompanied by an express written warranty
covering the full cost of both parts and labor necessary to repair a defect existing at
the point of sale that impairs the said used motor vehicle’s safety or use. Dealer
warranties cannot be waived under any circumstance.

Defects that affect only the appearance of the motor vehicle are not deemed to
impair the safety or use of the motor vehicle for purposes of this Act.

SEC.6.Duration of Warranty. The express written warranty to be provided
by the dealer of a used motor vehicle shall have the following durations:

(a) Tf at the time of the sale, the used motor vehicle has been operated for
less than Sixty-four thousand five hundred (64, 500) kilometers, the warranty shall
be for ninety (90) days or Six thousand thirty-five (6,035) kilometers, whichever
occur first;

(b) If at the time of the sale, the used motor vehicle has been operated
Sixty-four thousand five hundred kilometers (64,500 km) or more, but less than
One hundred twenty-eight thousand and seven hundred forty-seven kilometers
(128,747 km.), the warranty shall be for sixty days or, Four thousand and twenty-
three kilometers (4,023 km.), whichever occurs first;

(c) If at the time of the sale, the used motor vehicle has been operated

One hundred twenty-eight thousand and seven hundred forty-seven kilometers


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(128,747 km.), or more, but less than Two hundred one thousand and one hundred
sixty-eight kilometers (201,168 km.), thirty days or Two thousand and twelve
kilometers (2,012 km.), whichever occurs first;

(d) If the used motor vehicle’s true mileage is not known, such warranty
period shall be determined by the age of said used motor vehicle in the following
manner: a used motor vehicle three years old or less shall have a warranty as
provided in paragraph (A); a used motor vehicle more than three, but less than six
years old, shall have a warranty as provided in paragraph (B); and a used motor
vehicle six years old or more shall have a warranty as provided in paragraph (C).
A used motor vehicle’s age shall be determined by subtracting its model year from
the year in which the warranty holder purchased said used vehicle;

(©) The warranty periods established by this section shall be tolled during
any period in which the used motor vehicle is out of service as result of any repair
attempt pursuant to any warranty created by this section. The application warranty
period shall be extended thirty days from the date of completion of any repair
required by this section as to the defect repaired if the warranty would otherwise
have expired during such period.

SEC. 7.Odometer Tampering. — \t shall be unlawful for any person to commit

any of the following acts:


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(a) Alter the mileage reading of a motor vehicle or cause the alteration of
mileage of a motor vehicle;

(b)Advertise for sale, sell, use or install a device that makes an odometer of a
motor vehicle register a mileage different from the mileage the vehicle was driven,
as registered by the odometer within the designed tolerance of the manufacturer of
the odometer;

(c)Disconnect, reset or alter an odometer of a motor vehicle intending to
change the mileage registered by the odometer;

(d)With intent to defraud, operate a motor vehicle on a street, road, or
highway knowing that the odometer of the vehicle is disconnected or not
operating; or

(e)Conspire to violate this section of this Act.

An owner of a motor vehicle may service, repair or replace an odometer of a
motor vehicle if the mileage registered by the odometer remains the same as before
the service, repair or replacement. If the mileage cannot remain the same, the
repair shop owner or its staff can adjust the odometer to read zero: Provided, That
the owner of the vehicle or the agent of the owner through the repair center owner
or staff shall attach a written notice to the left of the door frame of the vehicle
specifying the mileage before the service, repair or replacement and the date of

service, repair or replacement. The owner of the vehicle shall not, with intent to


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defraud, remove or alter the notice attached to the motor vehicle required under
this section.

For the purpose of this Act, an odometer or odograph refers to an instrument
used for measuring the distance travelled by a motor vehicle which may be
electronic, mechanical, or a combination of the two.

Odometer tampering ot odometer fraud refers to the illegal practice of rolling
back odometers to make it appear that vehicles have lower mileage than they
actually do.

SEC.8.Penalties.— The following penalties shall be imposed upon any person
found guilty of violating the provisionsof this Act:

(a) The owner of the motor vehicle repair and service center who violates
the provision under Section 4 of this Act shall be punished with imprisonment of
not less than six (6) months and one (1) day but not more than four (4) years or a
fine of not less than One hundred thousand pesos (P 100,000.00) but not more than
Three hundred thousand (P300,000.00), or both, at the discretion of the court.

(b) The dealer who violates the provisions of the express warranties under
Sections 5 and 6 of this Act shall be liable to pay a minimum amount of One
hundred thousand pesos (P100,000.00)as damages to the aggrieved party without
prejudice to the filing of any civil or criminal liability that may incur under

existing laws.


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(c) Any person who knowingly or wilfully commits odometer tampering
under Section 7 of this Act shall suffer the penalty of imprisonment of not less
than six (6) months and one (1) day but not more than six (6) years or a fine of not
less than Two hundred thousand pesos (P200,000.00)but not more than Five
hundred thousand (P500,000.00), or both, at the discretion of the court.

If the offender is a juridical person, the proprietor, the partners or the
officers of the corporation responsible for the violation shall suffer the penalty
imposed under this section.

Any violation of Sections 4 and 7 of this Act may also be a ground for the

closure of the business establishment.

SEC. 9.Jmplementing Rules and Regulations. — The Executive Director of
the Land Transportation Office in consultation with the Secretary of Transportation
shall issue the necessary rules and regulations for the effective implementation of
this Act not later than three (3) months from the approval of this Act.

SEC. 10.Repealing Clause. — All laws, decrees, orders, rules and regulations,
other issuances, or parts thereof inconsistent with the provisions of this Act are
hereby repealed or modified accordingly.

SEC. 11.Effectivity. — This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or a newspaper of general circulation.

Approved,