GNYADA November 2019 Newsletter

NYC DCA is Cracking Down on Dealers TWO USED CAR DEALERS FINED $204k FOR VIOLATIONS

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laws that became effective last June. If your dealership has not already filled out the Report, it can be found at https://www1.nyc.gov/assets/dca/do wnloads/pdf/businesses/Used-Car- Contract-Cancellation-Option- Report-English.pdf Failure to produce the Report with your renewal application will result in non-renewal of your used car license. Dealers should review this Report carefully to ensure consistency with documents showing the numbers of used cars sold between July 1, 2018 and May 31, 2019. Dealers should also review deal jackets to ensure copies of the Contract Cancellation Option forms have been filed properly.

The Department of Consumer Affairs (DCA) recently fined two used car dealers, in Brooklyn and the Bronx, for illegal marketing and business practices as well as violations of the new financial disclosure laws. The dealerships failed to give customers required documents including the Consumer Bill of Rights, Financing Disclosure Form, and Contract Cancellation Option. The dealerships’ licenses are also being suspended and may be revoked. Due to violations like these, the DCA is requiring all NYC dealers to submit a copy of the New York City Second-hand Automobile Contract Cancellation Option Report with their license renewal application. Your dealership should have this Report available as it is a requirement pursuant to disclosure Recently, several dealers have either taken in vehicles on trade or have pur- chased used vehicles from auctions where the “Branding” from the DMV did not appear. Titles are sometimes “washed” from a vehicle to alter or eliminate necessary information. This is a problem for dealers because they are obligated to disclose the Branding when selling the vehicle. It is also a problem for purchasers because they may pay a higher insurance premium or be entitled to only a percentage of the damages in the event of an accident. Mississippi has the highest rate of vehicles with washed titles – 1 in 44.6 vehicles. New Jersey is not far behind with 1 in 87 vehicles. Other states with a high number of washed titles include Maryland (1 in 217), 6 Washed Titles

NEW YORK CITY SECOND-HAND AUTOMOBILE CONTRACT CANCELLATION OPTION REPORT

Second-HandAutomobileDealerName:

Second-HandAutomobileDealer DepartmentofConsumerAffairs (DCA)

LicenseNumber: BusinessAddress:

Second-hand automobile dealersmustmaintain a reporton consumer useof automobile contract cancellationoptions. The reportmust bemade availableupon request to theDepartmentofConsumerAffairs,butnomore thanonceannually. Date

NumberofConsumers thatAcceptedan AutomobileContractCancellationOption inConnectionwith theirSecond-Hand AutomobilePurchase

NumberofConsumers thatCancelled their Second-HandAutomobileSalesContracts Pursuant to anAutomobileContract CancellationOption

January 20___

February20___

March20___

April20___

May20___

June 20___

July20___

August 20___

September20___

October20___

November20___

December 20___

Iam authorized (e.g., owner, sole proprietor, general partner, director, corporate officer, or shareholder owning 10% ormore of company stock) to completeand sign this form onbehalf of theSecond-HandAutomobileDealer namedabove. Iunderstand that falsification of any statementmade herein is an offensepunishable bya fine or imprisonmentor both. __________________________________________________________ Signature __________________________________________________________ PrintName __________________________________________________________ Position/Title __________________________________________________________ Date

If you have any questions, please call the Association at 718.746.5900.

CARFAX, Auto Check, or any other place that you can obtain accurate information about a used vehicle’s history.

Rhode Island (1 in 238), Vermont (1 in 343), and Delaware (1 in 410).

Once a Branded Title, Always a Branded Title

DMV-DIRECT is available at 718.747.0400 if you have any questions regarding vehicle titles.

If a dealer purchases a vehicle or takes one in on trade and discovers that the Branding was removed from the title, it is best practice to disclose it to the poten- tial purchaser in writing to avoid possible legal issues. If a vehicle was originally titled in New York State, and the title was washed after moving through a few states, then the vehicle’s title should be re-Branded if it is titled again in New York. Dealers should make every reasonable effort to check the vehicle history through

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4 Greater New York Automobile Dealers Association • www.gnyada.com The Newsletter • November 2019