Dealer Obligations Concerning Emissions Expected to Change; Expanded Enforcement Activity by the FTC

April 10, 2015

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Bill Prohibiting Consumers from Waiving Dealer’s Obligation to Repair Emissions Defects Awaits Governor’s Signature

Both houses of the New Jersey Legislature have passed legislation that would prohibit a retail purchaser of a used vehicle from waiving a dealer’s obligation regarding emissions control equipment. The bill, S-394/A-4246, is sponsored by Senator Nicholas Sacco (D-Bergen and Hudson), Assemblywoman Angelica Jimenez (D-Bergen and Hudson) and Assemblyman Paul Moriarty (D-Camden and Gloucester), Chair of the Assembly Consumer Affairs Committee.

Under current law, motor vehicle dealers who sell used vehicles to consumers are required to make any repairs necessary to correct a defect which causes a vehicle to fail inspection or to buy it back from the consumer, unless the purchaser signs a waiver releasing the dealer from that obligation. The legislation would prohibit a consumer from signing a waiver if the defect is related to emissions and would not pass inspection. The bill is on the governor’s desk awaiting signature.

South Jersey Multi-location Dealer Settles FTC Complaint Over Representations About the Cost of Vehicle Add Ons

Earlier this month, the Federal Trade Commission (FTC) announced it had settled a complaint against a large south Jersey family of dealerships for alleged deceptive practices relating to add on services and products. The FTC claimed that the dealerships failed to adequately disclose the costs associated with a bi-weekly payment plan offered through a third party vendor. The FTC further alleged the plan had significant undisclosed costs that canceled out cost savings and in many cases cost the consumers more money. The dealerships admitted no liability but agreed to pay $184,000.00 to settle the matter. The takeaway from the FTC’s actions is that Federal regulators are continuing to expand the scope of enforcement actions beyond advertising to include add ons offered to consumers. Dealers should conduct annual reviews of their procedures and forms to make sure that their practices are in compliance with applicable law, that their transactions are transparent and that employees are properly trained and knowledgeable about all pertinent requirements.

For more information about the NJIADA, contact Paula Frendel at For more information about any of the issues above, or any other legal issues impacting your dealership, contact Tony Bush at (609) 989-5056 or

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