2023 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.