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ARIZONA HOUSE OF REPRESENTATIVESFifty-fourth Legislature Second Regular Session |
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HB 2378: motor vehicle transactions; notices; dealers
Sponsor: Representative Biasiucci, LD 5
Committee on Transportation
Overview
Adds motor vehicle transaction requirements relating to dealer-arranged financing or leasing, price disclosure and trade-ins.
History
If a sale or lease of a motor vehicle for a motor vehicle dealer or a lessor to a customer is conditioned on final approval of financing by a lender or lessor, the motor vehicle dealer or lessor is required to retain title transaction until financing is finally approved or the traded motor vehicle is returned to the customer. Any remedy for a violation of this requirement cannot be waived, modified or limited by agreement or contract (A.R.S. § 44-1371).
Motor vehicle dealer is defined as a new motor vehicle dealer, a used motor vehicle dealer, a public consignment auction dealer, a broker or a wholesale motor vehicle auction dealer, excluding a person who comes into possession of a motor vehicle as an incident to the person's regular business and who sells, auctions or exchanges the motor vehicle (A.R.S. § 28-4301).
Pursuant to A.R.S. § 28-4362, vehicle dealer license applications are required to be accompanied by a bond that:
1) Is in a form and amount prescribed by the Arizona Department of Transportation (ADOT);
2) Is executed by a surety company;
3) Is cancellable only at least 60 days prior notice to ADOT;
4) Inures a person who suffer loss because of:
a) Nonpayment by the dealer of customer prepaid title, registration or other related fees or taxes; and
b) The dealer's failure to deliver in conduction with the sale of a vehicle a valid vehicle title certificate free and clear of any prior owner's interests and all liens except a lien created by or expressly assumed in writing by the buyer or the vehicle.
Pursuant to A.R.S. § 28-2095, any person who sells a vehicle for which a restored certificate of title has been issued and who knows a restored salvage certificate of tile has been issued for the vehicle is required to disclose to the buyer before completion of the sale that the vehicle is a restored salvage vehicle.
Provisions
Dealer-Arranged Financing or Leasing
1. Requires motor vehicle dealers to provide a customer with a separate document that contains a signed "approval of financing" notice:
a) At the time a customer purchases or leases a motor vehicle through dealer-arranged financing or leasing;
b) Before the customer receives approval from a third-party financial institution; and
c)
If the dealer allows the customer to
take possession of the vehicle.
2. States that if a third-party financial institution does not approve the financing terms:
a) The motor vehicle dealer must notify the customer in writing within 10 days after delivery of the vehicle to the customer; and
b) The motor vehicle dealer or customer is allowed to cancel the sale or lease, if the dealer and customer do not agree to new terms. (Sec. 5)
3. Requires a motor vehicle dealer, if new financing terms are not agreed upon, to immediately return to the customer any:
a) Trade-in vehicle, which must be in the same condition in which it was received; and
b) Amount paid toward the sale or purchase of the motor vehicle, including any down payment, title fee, excise tax, motor vehicle dealer processing charge or other fee, tax or charge associated with the transaction. (Sec. 5)
4. Prohibits a motor vehicle dealer from charging a fee for use of the motor vehicle that was subject to sale or lease. (Sec. 5)
5. Prohibits a buyer from waiving the rights relating to financing approval. (Sec. 5)
6. Requires a customer, within two days if financing terms are not approved, to return a motor vehicle to the motor vehicle dealer in the same condition in which the customer received it, other than normal wear and tear. (Sec. 5)
Motor Vehicle Price Disclosure
7. Requires a motor vehicle dealer to clearly and conspicuously disclose the price of a motor vehicle that is available to all customers, when advertising the price of the vehicle. (Sec. 5)
8. Prohibits a motor vehicle dealer from advertising a motor vehicle price that has been reduced to reflect potential rebates. (Sec. 5)
9. Requires a motor vehicle dealer to include in its advertising price of a motor vehicle all cost or fees for goods and services that are not optional for the transaction, except for state and local taxes and fees. (Sec. 5)
Trade-In Vehicles
10. Requires motor vehicle dealers to pay the agreed on amount in full within 21 days after receiving a trade-in vehicle, if the dealer agrees to pay off any outstanding loans. (Sec. 5)
Unlawful Motor Vehicle Transaction
11. States that a motor vehicle transaction violation constitutes an unlawful practice. (Sec. 5)
12. Allows the Attorney General to investigate and take appropriate action prescribed by the consumer fraud statute. (Sec. 5)
13. States that a motor vehicle dealer that violates a motor vehicle transaction requirement is additionally subject to any other civil or criminal action, remedy or penalty provided by law. (Sec. 5)
Miscellaneous
14. Clarifies that a seller of a vehicle with a restored salvage title must clearly and conspicuously disclose to the buyer in writing before completion of the sale that the vehicle is a restored salvage vehicle and has a restored title. (Sec. 1)
15. Requires a vehicle dealer license application to be accompanied by a bond that additionally:
a) Insure a person who suffers loss because of the dealer's failure to comply with an agreement to pay off outstanding loans on trade-in vehicles; and
b) Covers nonpayment of trade-in vehicles. (Sec. 2)
16. Makes technical and comforting changes. (Sec. 2-4)
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20. Initials JT Transportation
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