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July 31, 2001 21:20:48
New State Laws Regarding Warranty on the Horizon

Gregg Tompkins
Dealer Insight Inc.

Every year new bills are introduced in State House and Senate chambers to add to, or modify state laws. Some of the bills make their way through the system; a vote is taken and may eventually see the light of day.

Some bills have already been passed and given an effective date, others are languishing in committees and most likely, at this point in the year, will either wait until next year or die an untimely death.

At the beginning of August, most state legislatures have already recessed for the year (nice short work year we pay them for, isn't it?). There are nine states that have not recessed yet and do work most of the year. Those are California, Illinois, Massachusetts, Michigan, New Jersey, New York, Ohio, Pennsylvania and Wisconsin.

We're going to give you information on some of the current bills in the pipeline and their current status (if possible).

Alabama - House Bill 168 - Added the following passage, "A service contract shall become effective on the date when the manufacturer's warranty expires." While the statute doesn't specifically mention motor vehicles, it's possible it may be applied to motor vehicles. Status: Referred to the Banking and Insurance Committee on 2/6/01.

Connecticut - Bill 1156 - Imposes a $3 surcharge for each new motor vehicle sold to fund the state lemon law program. Status: Passed - became effective 7/1/01

Kansas - House Bill 2145 - Would expand the 10 year warranty on seat belts to include all components included in federal motor vehicle safety standards 208 (49 C.F.R. 571.208), 209 (49 C.F.R. 571.209) and 210 (49 C.F.R. 571.210) including but not limited to any motorized components. Status: Unknown

Kansas - House Bill 2462 - Expands the coverage of the current lemon law to include conversion vehicles and vehicles with a gross weight of 16,000 pounds or less (up from 12,000 pounds or less). Status: Unknown

Kentucky - House Bill 72 - Amends lemon law to cover motor homes. Status: Unknown

Lousiana - House Bill 1130 - Rewrites passages relating to the necessary documentation required for a claim. The rewrite would not allow manufacturers to charge back claims for not properly substantiating or submitting the claim. Status: Unknown

Louisiana - House Bill 2054 - Adds passages to allow manufacturers to charge back claims that aren't properly documented in accordance with the manufacturer's rules. Status: Unknown

Maine - LD 322 - States that "A franchisor may not otherwise recover its cost for reimbursing a franchisee for parts and labor pursuant to this section by any means." This would not allow manufacturers to "add on" charges to recoup warranty parts reimbursement. Status: Unknown

Minnesota - HF 778/HF 1991/SF 736 - Manufacturers would not allowed to refuse to offer, conditionally offer, or require a new motor vehicle dealer to directly or indirectly incur an expense as a prerequisite to receiving a fundamental franchise benefit includes the right to receive timely payment for warranty services. Status: On 3/19/01 the bill was referred to Commerce, Jobs and Economic Development Committee.

Missouri - House Bill 800 - Extends lemon law from 12 months to 18 months and requires manufacturers that invoke an informal dispute settlement procedure for a lemon law case to settle within 60 days from receipt of notification from the consumer. Status: Read for the first time on 2/15/01.

New Jersey - Assembly Bill 1276 - Requires use of OEM or certified after market collision parts "during the model year and the four following years" except in certain situations. Status: Unknown

New Jersey - Assembly Bill 1689/Senate Bill 1495 - Requires the print in a warranty to be in at least 10 point bold-faced type. Status: Unknown

New Jersey - Assembly Bill 2287 - Extends the new vehicle lemon law from 18,000 miles to 24,000 miles. Status: Unknown

New Jersey - Senate Bill 1247 - Rewords the new vehicle lemon law to clarify that the time frame for coverage under the lemon law is from the date of the original delivery date to the consumer. Status: Unknown

New York - Assembly Bill 184 - The amendment provides that only new OEM replacement crash parts may be used on any vehicle during the year of manufacture and for two succeeding years thereafter, or the duration of the warranty, whichever is longer. In the event non-OEM parts are used or installed, and such parts are ill-fitting or require additional labor or materials in their installation or use, the insurer shall be responsible for the cost of such additional labor and materials. Status: 1/3/01 referred to Transportation Committee.

New York - Assembly Bill 748 - Would require, amongst other things, that repair shops disclose to consumers that any that warranties from the vehicle manufacturer do not cover parts which are being replaced. Status: 1/8/01 referred to Insurance Committee.

New York - Assembly Bill 1526 - Requires every motor vehicle repair shop to furnish consumers a written repair warranty for repairs or services providing that the specified repairs and services performed will be free from defects for ninety days or four thousand miles; prohibits waiver of such warranty; provides for some exclusions; provides that an aggrieved person may recover reasonable attorneys` fees in addition to damages and court costs; makes a violation a deceptive trade practice; authorizes the attorney general to seek injunctive relief and civil penalties. Status: 01/16/01 referred to Consumer Affairs and Protection Committee.

New York - Assembly Bill 5710 - Requires any dealer having an appropriate service facility to service any vehicle under manufacturer`s warranty by manufacturer whose line of cars he sells, regardless of where it was purchased; makes a violation punishable by a fine of $1000 and authorizes the attorney general to bring an action. Status: 02/28/01 referred to Consumer Affairs and Protection Committee

New York - Assembly Bill 7382 - Requires substitute vehicle or payment of reimbursement for costs incurred, at the option of the owner, where vehicle is rendered inoperable by failure of parts under warranty, the replacement of which is not delivered or otherwise made available for a number of days; specifies how to calculate period of inoperability, also provides for costs and attorneys` fees in an action in which a violation of this section is determined. Status: 03/22/01 referred to Consumer Affairs and Protection Committee.

New York - Senate Bill 899 - Requires merchant to post notices of recalled products that are offered for sale in their business establishment; provides for enforcement by the attorney general; authorizes a private right of action. Status: 1/16/01 referred to Consumer Protection Committee.

Pennsylvania - Senate Bill 285 - Requires dealers to retain parts replaced during repairs to be retained for customer inspection, including warranty and core parts, before being shipped back to the manufacturer. Status: 2/5/01 referred to Consumer Protection and Professional Licensure Committee.

If you have an interest in reading the full text of any of the bills, you can find them on the Internet on each state's legislative web site or by doing a search on For those without Internet access, you can contact your state assemblyperson or senator's office to ask for a copy of pending bills. Take the time to send a letter to your state representatives to voice your opinion on these bills. It's in your best interest.

Gregg Tompkins is warranty consultant for Dealer Insight and editor of the Wizards of Warranty newsletter - a monthly warranty administration newsletter for dealerships. He has assisted dealers throughout the country with their warranty administration needs in areas such as warranty expense problems, audit assistance, and training. He brings years of experience as a dealership professional along with a wealth of knowledge.





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