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ARIZONA STATE SENATE
Fifty-Fourth Legislature, Second Regular Session
motor vehicle transactions; notices; dealers
Purpose
Restricts motor vehicle dealer (dealer) advertising of a rebate or discount. Adds circumstances that must be covered by a motor vehicle bond and modifies the required disclosure relating to a restored salvage vehicle.
Background
An applicant for a dealer license must submit a bond with the license application that inures to the benefit of a person who suffers loss because of: 1) the dealer's nonpayment of customer prepaid title, registration or other related fees or taxes; and 2) an automotive recycler's or dealer's failure to deliver a valid vehicle title certificate free and clear of any prior owner's interests and all liens (A.R.S. § 28-4362).
The owner of a rebuilt or restored salvage vehicle must receive a restored salvage certificate of title (restored salvage title) from the Arizona Department of Transportation before transferring the vehicle. If a seller of a vehicle knows a restored salvage title has been issued, the seller must disclose to the buyer that the vehicle is a restored salvage vehicle before completion of the sale (A.R.S. § 28-2095). A salvage vehicle is a vehicle, other than a nonrepairable vehicle, that is stolen, wrecked, destroyed, or damaged to the extent that the owner, leasing company, financial institution or insurance company considers it uneconomical to repair the vehicle (A.R.S. § 28-2091).
Current motor vehicle transaction regulations require a motor vehicle dealer or lessor to retain the title and possession of a vehicle traded by a customer, if the sale or lease is conditioned on final financing approval by a lender or lessor, until the financing is approved or the traded vehicle (A.R.S. § 44-1371).
The Attorney General may investigate violations of consumer fraud statutes and petition a court for the recovery of civil penalties or other outlined remedies as prescribed (A.R.S. Title 44, Chapter 10, Article 7).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Requires a dealer bond to:
a) cover nonpayment of trade-in vehicles; and
b) inure to the benefit of 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.
2. Prohibits a dealer from advertising a total sales price of motor vehicle that includes a deduction for a rebate or discount, unless the rebate or discount is available to every consumer without restriction.
3. Allows a rebate or discount for which a consumer must qualify to be advertised separately from the total advertised sales price if the advertisement clearly and conspicuously discloses the qualifications.
4. Classifies, as an unlawful practice under consumer fraud statutes, a violation of:
a) restrictions on the advertising of a motor vehicle sales price; and
b) statutory regulations on motor vehicle transactions conditioned on financing approval by a lender or lessor.
5. Allows the Attorney General to investigate violations of motor vehicle transaction regulations and take appropriate action as prescribed.
6. Applies the statutory definition of motor vehicle dealer to motor vehicle price advertising restrictions.
7. Modifies the disclosure requirements for sales of restored salvage vehicles by:
a) requiring the disclosure to indicate that the vehicle has a restored salvage title; and
b) stipulating that the disclosure must be clear, conspicuous and in writing.
8. Makes technical and conforming changes.
9. Becomes effective on the general effective date.
House Action
TRANS 2/19/20 DPA 8-1-0-0
3rd Read 2/27/20 60-0-0
Prepared by Senate Research
March 10, 2020
LB/gs