2023 New York Laws › GBS - General Business › Article 11-A - Motor Vehicle Manufacturers › 198-B - Sale or Lease of Used Motor Vehicles.

§ 198-b. Sale or lease of used motor vehicles. a. Definitions. As used
in this section, the following words shall have the following meanings:
1.  "Consumer" means the purchaser, or lessee, other than for purposes
of resale, of a used motor vehicle primarily used for personal,  family,
or household purposes and subject to a warranty, and the spouse or child
of the purchaser or the lessee if either such motor vehicle or the lease
of  such  motor vehicle is transferred to the spouse or child during the
duration of any warranty applicable to such motor vehicle, and any other
person entitled by the terms of such warranty to enforce the obligations
of the warranty;
2. "Used motor vehicle" means a motor vehicle, excluding  motor  homes
and  off-road vehicles, which has been purchased, leased, or transferred
either after eighteen thousand miles of operation or two years from  the
date of original delivery, whichever is earlier;
3. "Dealer" means any person or business which sells, offers for sale,
leases  or  offers  for lease a used vehicle after selling, offering for
sale, leasing or offering for lease three or more used vehicles  in  the
previous twelve month period, but does not include:
(a) a bank or financial institution except in the case of a lease of a
used motor vehicle,
(b) a business selling a used vehicle to an employee of that business,
(c)  a regulated public utility which sells at public auction vehicles
used in the  ordinary  course  of  its  operations,  provided  that  any
advertisements  of  such sales conspicuously disclose the "as is" nature
of the sale,
(d) the sale of a leased vehicle to that vehicle's  lessee,  a  family
member of the lessee, or an employee of the lessee, or
(e)   the  state,  its  agencies,  bureaus,  boards,  commissions  and
authorities, and  all  of  the  political  subdivisions  of  the  state,
including the agencies and authorities of such subdivisions;
4.  "Warranty"  means  any  undertaking in connection with the sale or
lease by a dealer of a used motor vehicle to  refund,  repair,  replace,
maintain  or  take  other action with respect to such used motor vehicle
and provided at no extra charge beyond  the  price  of  the  used  motor
vehicle;
5.  "Service  contract"  means a contract in writing for any period of
time or any specific mileage to refund,  repair,  replace,  maintain  or
take  other  action with respect to a used motor vehicle and provided at
an extra charge beyond the price of the used motor  vehicle  or  of  the
lease contract for the used motor vehicle;
6.  "Repair  insurance"  means a contract in writing for any period of
time or any specific mileage to refund,  repair,  replace,  maintain  or
take  other  action  with  respect  to a used motor vehicle and which is
regulated by the department of financial services.
b. Written warranty required; terms. 1. No dealer shall sell or  lease
a used motor vehicle to a consumer without giving the consumer a written
warranty which shall at minimum apply for the following terms:
(a)  If  the used motor vehicle has thirty-six thousand miles or less,
the warranty shall be at minimum ninety days  or  four  thousand  miles,
whichever comes first.
(b) If the used motor vehicle has more than thirty-six thousand miles,
but  less  than  eighty thousand miles, the warranty shall be at minimum
sixty days or three thousand miles, whichever comes first.
(c) If the used motor vehicle has eighty thousand miles or more but no
more than one hundred thousand miles, the warranty shall be at a minimum
thirty days or one thousand miles, whichever comes first.
2. The written warranty shall require  the  dealer  or  his  agent  to
repair or, at the election of the dealer, reimburse the consumer for the

reasonable  cost  of  repairing  the  failure of a covered part. Covered
parts shall at least include the following items:
(a)  Engine.  All  lubricated parts, water pump, fuel pump, manifolds,
engine block, cylinder head, rotary engine housings and flywheel.
(b) Transmission. The  transmission  case,  internal  parts,  and  the
torque converter.
(c) Drive axle. Front and rear drive axle housings and internal parts,
axle shafts, propeller shafts and universal joints.
(d)  Brakes.  Master cylinder, vacuum assist booster, wheel cylinders,
hydraulic lines and fittings and disc brake calipers.
(e) Radiator.
(f) Steering. The steering gear housing and all internal parts,  power
steering pump, valve body, piston and rack.
(g)  Alternator,  generator,  starter,  ignition  system excluding the
battery.
3.  Such  repair  or  reimbursement  shall  be  made  by  the   dealer
notwithstanding  the fact that the warranty period has expired, provided
the consumer notifies the dealer of the failure of a covered part within
the specified warranty period.
4. The written warranty  may  contain  additional  language  excluding
coverage:
(a)  for  a  failure  of  a covered part caused by a lack of customary
maintenance;
(b) for a failure of  a  covered  part  caused  by  collision,  abuse,
negligence, theft, vandalism, fire or other casualty and damage from the
environment (windstorm, lightning, road hazards, etc.);
(c)  if  the  odometer  has  been  stopped  or  altered  such that the
vehicle's actual mileage cannot be readily determined or if any  covered
part  has  been  altered  such that a covered part was thereby caused to
fail;
(d) for maintenance services and the parts  used  in  connection  with
such  services  such as seals, gaskets, oil or grease unless required in
connection with the repair of a covered part;
(e) for a motor tuneup;
(f) for a failure resulting from racing or other competition;
(g) for a failure caused by towing a trailer or another vehicle unless
the used motor vehicle is  equipped  for  this  as  recommended  by  the
manufacturer;
(h) if the used motor vehicle is used to carry passengers for hire;
(i)  if  the  used  motor  vehicle is rented to someone other than the
consumer as defined in paragraph one of subdivision a of this section;
(j) for repair of valves  and/or  rings  to  correct  low  compression
and/or oil consumption which are considered normal wear;
(k)  to  the  extent  otherwise  permitted by law, for property damage
arising or allegedly arising out of the failure of a covered part; and
(l) to the extent otherwise permitted by law, for loss of the  use  of
the  used motor vehicle, loss of time, inconvenience, commercial loss or
consequential damages.
c. Failure to honor warranty. 1. If the dealer or his agent  fails  to
correct a malfunction or defect as required by the warranty specified in
this  section  which  substantially  impairs the value of the used motor
vehicle to the consumer after a reasonable period of  time,  the  dealer
shall  accept  return  of  the  used motor vehicle from the consumer and
refund to the consumer the full purchase price, or  in  the  case  of  a
lease  contract all payments made under the contract, including sales or
compensating use tax, less a reasonable allowance  for  any  damage  not
attributable   to   normal   wear  or  usage,  and  adjustment  for  any
modifications which either increase or decrease the market value of  the

vehicle  or  of the lease contract, and in the case of a lease contract,
shall cancel all further payments due from the consumer under the  lease
contract.  In  determining  the  purchase  price  to  be  refunded or in
determining all payments made under a lease contract to be refunded, the
purchase  price,  or  all payments made under a lease contract, shall be
deemed equal to the sum of the actual cash difference paid for the  used
motor  vehicle, or for the lease contract, plus, if the dealer elects to
not return any vehicles traded-in by the consumer, the  wholesale  value
of  any  such  traded-in vehicles as listed in the National Auto Dealers
Association Used Car Guide, or such other guide as may be  specified  in
regulations  promulgated  by  the  commissioner  of  motor  vehicles, as
adjusted for mileage, improvements, and any major physical or mechanical
defects in the traded-in vehicle at the time  of  trade-in.  The  dealer
selling  or leasing the used motor vehicle shall deliver to the consumer
a written notice including conspicuous language indicating that  if  the
consumer  should  be  entitled to a refund pursuant to this section, the
value of any vehicle traded-in by the consumer, if the dealer elects  to
not return it to the consumer, for purposes of determining the amount of
such refund will be determined by reference to the National Auto Dealers
Association  Used  Car Guide wholesale value, or such other guide as may
be approved by the commissioner  of  motor  vehicles,  as  adjusted  for
mileage,  improvements,  and  any  major physical or mechanical defects,
rather than the value listed in the sales  contract.  Refunds  shall  be
made  to  the  consumer  and  lienholder, if any, as their interests may
appear on the records of ownership  kept  by  the  department  of  motor
vehicles.  If  the  amount  to  be  refunded  to  the lienholder will be
insufficient to discharge the lien, the dealer shall notify the consumer
in writing by registered or certified mail that the consumer has  thirty
days to pay the lienholder the amount which, together with the amount to
be refunded by the dealer, will be sufficient to discharge the lien. The
notice  to  the  consumer shall contain conspicuous language warning the
consumer that failure to pay such funds to the lienholder within  thirty
days  will terminate the dealer's obligation to provide a refund. If the
consumer fails to make such payment within thirty days, the dealer shall
have no further responsibility to provide a refund under  this  section.
Alternatively,  the  dealer may elect to offer to replace the used motor
vehicle with a comparably priced vehicle, with such adjustment in  price
as  the  parties  may  agree  to. The consumer shall not be obligated to
accept a replacement vehicle, but  may  instead  elect  to  receive  the
refund  provided  under this section. It shall be an affirmative defense
to any claim under this section that:
(a) The malfunction or  defect  does  not  substantially  impair  such
value; or
(b)  The  malfunction  or  defect  is  the result of abuse, neglect or
unreasonable modifications or alterations of the used motor vehicle.
2. It shall be presumed that a dealer has had a reasonable opportunity
to correct a malfunction or defect in a used motor vehicle, if:
(a) The same malfunction or defect has been subject to repair three or
more times by the selling or leasing dealer  or  his  agent  within  the
warranty period, but such malfunction or defect continues to exist; or
(b)  The  vehicle is out of service by reason of repair or malfunction
or defect for a cumulative total of fifteen  or  more  days  during  the
warranty  period.  Said period shall not include days when the dealer is
unable to complete the repair because of the unavailability of necessary
repair parts. The dealer shall be required to exercise due diligence  in
attempting  to obtain necessary repair parts. Provided, however, that if
a vehicle has been out of service for a cumulative total  of  forty-five
days,   even   if  a  portion  of  that  time  is  attributable  to  the

unavailability of replacement parts, the consumer shall be  entitled  to
the replacement or refund remedies provided in this section.
3.  The  term  of  any  warranty, service contract or repair insurance
shall be extended by any time period during which the used motor vehicle
is in the possession of the dealer or his duly authorized agent for  the
purpose  of  repairing  the  used  motor  vehicle  under  the  terms and
obligations of said warranty, service contract or repair insurance.
4. The term of any warranty, service contract or repair insurance, and
the fifteen day out-of-service period, shall be  extended  by  any  time
during  which  repair services are not available to the consumer because
of a war, invasion or strike, fire, flood or other natural disaster.
d. Waiver void. 1. Any agreement entered into by a  consumer  for  the
purchase  or  lease  of  a  used  motor  vehicle which waives, limits or
disclaims the rights set forth in this article shall be void as contrary
to public policy. Further,  if  a  dealer  fails  to  give  the  written
warranty  required  by  this  article,  the dealer nevertheless shall be
deemed to have given said warranty as a matter of law.
2. Nothing in this section shall  in  any  way  limit  the  rights  or
remedies  which  are  otherwise  available to a consumer under any other
law.
3. Notwithstanding paragraph one of  this  subdivision,  this  article
shall  not  apply  to  used motor vehicles sold for, or in the case of a
lease where the value of the used motor vehicle  as  agreed  to  by  the
consumer and the dealer which vehicle is the subject of the contract is,
less  than  one thousand five hundred dollars, or to used motor vehicles
with over one hundred thousand miles at the time of  sale  or  lease  if
said  mileage  is  indicated  in  writing  at the time of sale or lease.
Further, this article shall not apply to the sale or lease of historical
motor vehicles as defined in section four hundred one of the vehicle and
traffic law.
e. Time of delivery, location of  warranty  and  notice.  The  written
warranty  provided  for in subdivision b of this section and the written
notice provided for in subdivision c of this section shall be  delivered
to  the  consumer  at or before the time the consumer signs the sales or
lease contract for the used motor vehicle. The warranty and  the  notice
may  be  set  forth  on  one  sheet  or  on separate sheets. They may be
separate from, attached to, or a part of the sales or lease contract. If
they are part of the sales or lease contract, they  shall  be  separated
from  the  other  contract  provisions  and each headed by a conspicuous
title.
f. Arbitration and enforcement. 1. If  a  dealer  has  established  or
participates  in an informal dispute settlement procedure which complies
in all respects with the provisions of part seven hundred three of title
sixteen of the code  of  federal  regulations  the  provisions  of  this
article  concerning  refunds  or  replacement  shall  not  apply  to any
consumer who has not first resorted to such procedure. Dealers utilizing
informal dispute settlement  procedures  pursuant  to  this  subdivision
shall  insure  that  arbitrators  participating in such informal dispute
settlement procedures are familiar with the provisions of  this  section
and  shall  provide  to arbitrators and consumers who seek arbitration a
copy of the provisions of  this  section  together  with  the  following
notice in conspicuous ten point bold face type:
USED CAR LEMON LAW BILL OF RIGHTS
1.  If you purchase a used car for more than one thousand five hundred
dollars, or lease a used car where you and the dealer have  agreed  that
the  car's  value  is  more than one thousand five hundred dollars, from
anyone selling or leasing three or more used cars a year,  you  must  be
given a written warranty.
2.  If your used car has 18,000 miles or less, you may be protected by
the new car lemon law.
3.  (a)  If  your  used  car  has more than 18,000 miles and up to and
including 36,000 miles, a warranty must be provided for at least 90 days
or 4,000 miles, whichever comes first.
(b) If your used car has more than 36,000 miles but less  than  80,000
miles,  a warranty must be provided for at least 60 days or 3,000 miles,
whichever comes first.
(c) If your used car has 80,000 miles or more but no more than 100,000
miles, a warranty must be provided for at least 30 days or 1,000  miles,
whichever comes first. Cars with over 100,000 miles are not covered.
4.  If  your  engine,  transmission,  drive  axle,  brakes,  radiator,
steering, alternator, generator, starter, or ignition system  (excluding
the  battery)  are defective, the dealer or his agent must repair or, if
he so chooses, reimburse you for the reasonable cost of repair.
5. If the  same  problem  cannot  be  repaired  after  three  or  more
attempts,  you  are  entitled  to return the car and receive a refund of
your purchase price or of all payments made under your  lease  contract,
and  of  sales tax and fees, minus a reasonable allowance for any damage
not attributable to normal usage or wear, and, in the case  of  a  lease
contract,  a  cancellation  of  all  further  payments you are otherwise
required to make under the lease contract.
6. If your car is out of service to repair a problem for  a  total  of
fifteen  days  or  more  during  the warranty period you are entitled to
return the car and receive a refund of your purchase  price  or  of  all
payments  made  under  your  lease  contract, and of sales tax and fees,
minus a reasonable allowance for any damage not attributable  to  normal
usage  or  wear, and, in the case of a lease contract, a cancellation of
all further payments you are otherwise required to make under the  lease
contract.
7. A dealer may put into the written warranty certain provisions which
will  prohibit  your  recovery  under  certain  conditions; however, the
dealer may not cause you to waive any rights under this law.
8. A dealer may refuse to refund your purchase price, or the  payments
made  under  your  lease contract, if the problem does not substantially
impair the value of your car, or if the  problem  is  caused  by  abuse,
neglect, or unreasonable modification.
9.  If  a  dealer has established an arbitration procedure, the dealer
may refuse to refund your purchase price until you first resort  to  the
procedure. If the dealer does not have an arbitration procedure, you may
resort  to  any  remedy  provided  by  law  and  may be entitled to your
attorney's fees if you prevail.
10. As an alternative to  the  arbitration  procedure  made  available
through  the  dealer  you  may instead choose to submit your claim to an
independent arbitrator, approved by the attorney general. You  may  have
to pay a fee for such an arbitration. Contact your local consumer office
or  attorney general's office to find out how to arrange for independent
arbitration.
11. If any dealer  refuses  to  honor  your  rights  or  you  are  not
satisfied  by the informal dispute settlement procedure, complain to the
New York State Attorney General, Executive Office, Capitol, Albany, N.Y.
12224.
2. A dealer shall have up to thirty days from the date  of  notice  by
the  consumer that the arbitrator's decision has been accepted to comply
with the  terms  of  such  decision.  Provided,  however,  that  nothing
contained  in  this  subdivision  shall impose any liability on a dealer
where a delay beyond the thirty day period is attributable to a consumer

who has requested a particular replacement  vehicle  or  otherwise  made
compliance impossible within said period.
3.  Upon the payment of a prescribed filing fee, a consumer shall have
the option of submitting any dispute arising under this  section  to  an
alternate  arbitration  mechanism  established  pursuant  to regulations
promulgated hereunder by the attorney general. Upon application  of  the
consumer  and payment of the filing fee, the dealer shall submit to such
alternate arbitration.
Such alternate  arbitration  shall  be  conducted  by  a  professional
arbitrator  or  arbitration  firm  appointed  by  and  under regulations
established by the attorney general. Such  mechanism  shall  ensure  the
personal  objectivity  of its arbitrators and the right of each party to
present its case, to be in attendance during any  presentation  made  by
the  other  party and to rebut or refute such presentation. In all other
respects, such alternate arbitration  mechanism  shall  be  governed  by
article seventy-five of the civil practice law and rules.
The  notice  required  by  paragraph one of this subdivision, entitled
Used Car Lemon Law Bill of Rights, shall be provided to arbitrators  and
consumers who seek arbitration under this subdivision.
A  dealer shall have thirty days from the date of mailing of a copy of
the arbitrator's decision to such dealer to comply  with  the  terms  of
such  decision.  Failure  to  comply  within the thirty day period shall
entitle the consumer to recover, in addition to any  other  recovery  to
which he may be entitled, a fee of twenty-five dollars for each business
day  beyond  thirty  days  up to five hundred dollars; provided however,
that nothing in this subdivision shall impose any liability on a  dealer
where a delay beyond the thirty day period is attributable to a consumer
who  has  requested  a  particular replacement vehicle or otherwise made
compliance impossible within said period.
The commissioner of motor vehicles or any person deputized by him  may
deny  the  application of any person for registration under section four
hundred fifteen of the vehicle and traffic law and suspend or  revoke  a
registration  under such section or refuse to issue a renewal thereof if
he or such deputy determines that such applicant or  registrant  or  any
officer, director, stockholder, or partner, or any other person directly
or  indirectly interested in the business has deliberately failed to pay
an arbitration award, which has not been stayed or appealed, rendered in
an arbitration proceeding pursuant to  this  paragraph  for  sixty  days
after  the date of mailing of a copy of the award to the registrant. Any
action taken by the commissioner of  motor  vehicles  pursuant  to  this
paragraph  shall  be governed by the procedures set forth in subdivision
nine of section four hundred fifteen of the vehicle and traffic law.
4. In no event shall a  consumer  who  has  resorted  to  an  informal
dispute  settlement  procedure  be  precluded from seeking the rights or
remedies available by law.
5. In an action brought to enforce the provisions of this article, the
court may award reasonable attorney's fees to a prevailing plaintiff  or
to  a consumer who prevails in any judicial action or proceeding arising
out of an arbitration proceeding held pursuant  to  paragraph  three  of
this  subdivision.  In  the  event a prevailing plaintiff is required to
retain the services of an attorney to enforce  collection  of  an  award
granted  pursuant  to  this  section,  the  court may assess against the
dealer reasonable attorney's  fees  for  services  rendered  to  enforce
collection of said award.
6.  Any  action  brought  pursuant  to this article shall be commenced
within four years of the date of original delivery  of  the  used  motor
vehicle to the consumer.
g.  Notice  of  consumer rights. At the time of purchase or lease of a
used motor vehicle from a dealer in this state, the dealer shall provide
to the consumer a notice, printed in not less than eight point bold face
type, entitled "Used Car Lemon Law Bill of Rights".  The  text  of  such
notice  shall  be identical with the notice required by paragraph one of
subdivision f of this section.