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FAILURE TO DISCLOSE PRIOR USE OF VEHICLES COSTS DEALERS

New York Vehicle and Traffic Law and DMV Regulations require dealers to disclose the prior use of a vehicle in certain circumstances. If a vehicle’s principal prior use was for one of the following categories: taxi (includes UBER, LYFT, and other ride shares), rental car, police car, or driver education vehicle , dealers must provide written disclosure. “Principal prior use” means more than 50% of the total miles on the vehicle came from the prior use. The Prior Use statement (language below) must be conspicuously printed, typed or stamped on the dealer’s contract of sale and given to your buyer prior to their agreement to purchase the vehicle. This disclosure is required in both retail and wholesale transactions. Failure to disclose prior use can result in lawsuits for damages and the statute permits triple damages against the seller. If you are selling used vehicles covered by this section, be sure that the buyer is aware of the primary prior use of the vehicle before the sale is completed. Also, be sure to get your customer’s signature.

HOT TOPICS

Prior Use Certification (required by Vehicle and Traffic Law 417-a if the principal prior use of the vehicle was as a police vehicle, taxicab, rental vehicle or driver education vehicle). The principal prior use of this vehicle was as: a police vehicle ____, a taxicab ____, a rental vehicle_____, a police vehicle ____, or a driver education vehicle_____.

DMV Regulations require this language on customer contracts for such vehicles

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