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Beach Bill to Require Dealer Recall Notifications to Buyers of Used Vehicles Advances

Senator James Beach addresses the Legislature.

TRENTON – Legislation sponsored by Senator James Beach that would require dealerships to notify buyers of recalls on used motor vehicles for sale was passed by Senate Commerce Committee today.

“We need to protect consumers from those who seek to take advantage of them,” said Beach (D-Burlington/Camden).  “No one should be put in danger because they weren’t notified of an unresolved safety recall.”

Under current law, dealerships can market and sell used cars with unresolved safety recalls, as long as they provide a general statement in advertising that the cars might be subject to a recall.

The bill, S-2740, would make it illegal under the consumer fraud act for a dealer to sell a used vehicle without first contacting, or accessing information provided by, the vehicle manufacturer or the National Highway Traffic Safety Administration (NHTSA) to determine if there are any recalls on the used vehicle which have not been corrected or addressed.  In the event that a recall is discovered, the dealer would be required to notify the prospective purchaser about the recall, and whether the recall work for that particular vehicle was resolved prior to finalizing the sale of the vehicle.

Additionally, the bill would provide that there is an undisputed presumption that a dealer had no knowledge of the existence of a prior recall on a used vehicle if, after accessing the NHTSA website and inputting the specific vehicle identification number (VIN), the dealer found that website indicated no open recall existed for that particular used vehicle. This provision would not create any legal duty upon a dealer related to the accuracy, errors, or omissions of the NHTSA website or require a dealer to provide the prospective purchaser with any recall information that may be added to the NHTSA website after the dealer has provided a copy of the recall information to the prospective purchaser of the used vehicle.

This bill would supplement the Consumer Fraud Act so if a car dealer was found guilty under the act, the court would be able to award reasonable attorney fees, not to exceed 30 percent of the damages awarded. In the most egregious cases, individuals may be entitled to up to triple the damages awarded.

Federal law already prohibits dealers from selling new cars with safety recalls, and it bans car rental companies from selling or renting them.

The bill was released from committee by a vote of 4-1 and next heads to the full Senate for further consideration.