NY Gen Bus L § 198-C (2021)
2021 New York Laws GBS - General Business Article 11-A - Motor Vehicle Manufacturers 198-C - Automobile Trade-in Protection.

§  198-c. Automobile trade-in protection. (a) As used in this section, "dealer" shall have the same meaning as such term is defined by  section four hundred fifteen of the vehicle and traffic law.  (b)  When a dealer purchases or obtains a vehicle in trade in a retail sale or lease transaction and the vehicle is subject to a  prior  credit or lease balance, all of the following apply:  (1) If the dealer agreed to pay a specified amount on the prior credit or  lease  balance  owing on the vehicle purchased or obtained in trade, and the agreement to pay the specified amount is contained in a  written agreement  documenting  the  transaction,  the  dealer  shall tender the agreed upon amount as provided in the written agreement to  the  lessor, or  to the lien holder, or to the designee of that lessor or lien holder of the vehicle purchased or obtained in trade within twenty-one calendar days of purchasing or obtaining the vehicle in trade, provided, however, that the dealer may rely upon the amount due as stated by the lessor  or lien holder.  (2)  If the dealer did not set forth an agreement regarding payment of a prior credit or  lease  balance  owed  on  the  vehicle  purchased  or obtained  in  trade, in a written agreement documenting the transaction, the dealer shall tender to the lessor, or to the lien holder, or to  the designee  of  that  lessor  or  lien  holder of the vehicle purchased or obtained in trade, an amount necessary to discharge the prior credit  or lease balance owing on the vehicle purchased or obtained in trade within twenty-one  calendar  days  of  purchasing  or  obtaining the vehicle in trade, provided, however, that the dealer may rely upon the  amount  due as stated by the lessor or lien holder.  (3)  The  time  period  specified  in  paragraph  one  or  two of this subdivision may be shortened  if  the  dealer  and  consumer  agree,  in writing, to a shorter time period.  (4)  A  dealer  shall  not  sell,  consign  for  sale, or transfer any ownership interest in the vehicle purchased or obtained in  trade  until an amount necessary to discharge the prior credit or lease balance owing on  the  vehicle has been tendered to the lessor, or to the lien holder, or to the designee  of  that  lessor  or  lien  holder  of  the  vehicle purchased or obtained in trade.  (c)  If  the  agreement  gives  either  party the right to rescind the entire agreement within a reasonable  time  period,  rescission  of  the entire  agreement  shall effectively rescind the obligations pursuant to this section without violating this section.  (d) This section shall not apply to agreements  or  transactions  that involve a state or federal program in which a dealer is issued a voucher to  offset the purchase price or lease price for a qualifying lease of a new vehicle upon the surrender of an  eligible  trade-in  vehicle  to  a dealer participating in the program.  (e)  (1)  Every  violation of this section shall be deemed a deceptive act and practice subject to enforcement under  article  twenty-two-A  of this  chapter.  In addition, the district attorney, county attorney, and the corporation counsel shall have  concurrent  authority  to  seek  the relief  in  paragraph  two  of this subdivision, and all civil penalties obtained in any such action shall be retained  by  the  municipality  or county.  (2)  In every case where the court shall determine that a violation of this section has occurred, it may impose a civil  penalty  of  not  more than  five thousand dollars for each violation. Such penalty shall be in addition to  any  denial  of  registration  or  renewal,  suspension  of registration  or  revocation  of  registration  or  assessment of a fine authorized by subdivision nine of section four hundred  fifteen  of  the vehicle and traffic law.  (3)  Nothing  in this section shall be construed to restrict any right which any person may have under any other statute or the common law.  (4)  No dealer shall be deemed to have violated the provisions of this section if such dealer shows, by a preponderance of the  evidence,  that the  violation  was  not intentional and resulted from a bona fide error made notwithstanding the maintenance of procedures reasonably adopted to avoid such error.  (f) Any person who is convicted of knowingly violating paragraph  four of  subdivision  (b)  of  this  section  shall  be  guilty  of a class A misdemeanor.  (g) If any part or  provision  of  this  section  or  the  application thereof  to any person or circumstances be adjudged invalid by any court of competent jurisdiction,  such  judgment  shall  be  confined  in  its operations  to  the  part, provision or application directly involved in the controversy in which such judgment  shall  have  been  rendered  and shall not affect or impair the validity of the remainder of this section or the application thereof to other persons or circumstances.