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Consumer Protection Laws - Part 7

Motor Vehicle Business Regulation Act

Introduction

Purpose of the Act.

Protect Consumers who purchase new vehicles.

What does it provide?

(1) The holder of any license issued under this chapter may not:

Engage in False Advertising by:

(a) intentionally publish, display, or circulate any advertising that is misleading or inaccurate in any material fact or that misrepresents any of the products sold, manufactured, re-manufactured, handled, or furnished by a licensee;

(b) intentionally publish, display, or circulate any advertising without identifying the seller as the licensee by including in the advertisement the full name under which the licensee is licensed or the licensee's number assigned by the division;

(j) advertise or otherwise represent, or knowingly allow to be advertised or represented on his behalf or at his place of business, that no down payment is required in connection with the sale of a motor vehicle when a down payment is required and the buyer is advised or induced to finance a down payment by a loan in addition to any other loan financing the remainder of the purchase price of the motor vehicle;

(10) A used motor vehicle dealer licensed under this chapter may not advertise, offer for sale, or sell a new motor vehicle that has been driven less than 7,500 miles by obtaining a title only to the vehicle and representing it as a used motor vehicle.

Lack a License

(g) engage in a business respecting the selling or exchanging of new or new and used motor vehicles for which he is not licensed, including selling or exchanging a new motor vehicle for which the licensee does not have a franchise,

(t) sell, display for sale, offer for sale, or exchange any new motor vehicle if the licensee does not:

(i) have a new motor vehicle dealer's license under Section 41-3-202; and

(ii) possess a franchise from the manufacturer of the new motor vehicle sold, displayed for sale, offered for sale, or exchanged by the licensee.

Sell from un-licensed locations

(n) sell, display for sale, or offer for sale motor vehicles at any location other than the principal place of business or additional places of business licensed under this chapter; this provision is construed to prevent dealers, salespersons, or any other representative of a dealership from selling, displaying, or offering motor vehicles for sale from their homes or other unlicensed locations;

Hold back license plates

(p) withhold delivery of license plates obtained by the licensee on behalf of a customer for any reason, including nonpayment of any portion of the vehicle purchase price or down payment;

Issue a Temporary Permit unless:

(a) (i) the motor vehicle for which the temporary permit is issued has received and passed the safety inspection required by Section 53-8-205 within the previous six months;

and

(iii) a copy of the safety inspection certificate is given to the customer; and
(b) the motor vehicle passed the emission inspection test required by Section 41-6-163.6.

(3) Notwithstanding Subsection (1)(b), a dealer may issue a temporary permit without proof of an emission inspection if:

(a) the motor vehicle is exempt from emission inspection as provided in Section 41-6-163.6;

(b) the purchaser is a resident of a county that does not require emission inspections;

(4) Notwithstanding Subsection (1), a dealer may sell a motor vehicle as is without having it safety or emission inspected provided that no temporary permit is issued.

Required Disclosures to Buyers

(1) (a) A dealer may not issue a temporary permit or release possession of a motor vehicle ... unless the document of sale contains one of the disclosures listed in Subsection (2).

(b) The disclosures shall be set forth clearly and conspicuously on the first or front page of the sale document at the time of sale, executed by the purchaser, and for Subsection (2)(b), executed by the seller also.

Purchaser Financing

(2) (a) The form to be used when financing is the purchaser's responsibility shall read as follows:
"THE PURCHASER OF THE MOTOR VEHICLE DESCRIBED IN THIS CONTRACT ACKNOWLEDGES THAT THE SELLER OF THE MOTOR VEHICLE HAS MADE NO PROMISES, WARRANTIES, OR REPRESENTATIONS REGARDING SELLER'S ABILITY TO OBTAIN FINANCING FOR THE PURCHASE OF THE MOTOR VEHICLE. FURTHERMORE, PURCHASER UNDERSTANDS THAT IF FINANCING IS NECESSARY IN ORDER FOR THE PURCHASER TO COMPLETE THE PAYMENT TERMS OF THIS CONTRACT ALL THE FINANCING ARRANGEMENTS ARE THE SOLE RESPONSIBILITY OF THE PURCHASER.

Seller Financing

(b) The form to be used when the seller agrees to seek arrangements for financing shall read as follows:

"(1) THE PURCHASER OF THE MOTOR VEHICLE DESCRIBED IN THIS CONTRACT HAS EXECUTED THE CONTRACT IN RELIANCE UPON THE SELLER'S REPRESENTATION THAT THE SELLER CAN PROVIDE FINANCING ARRANGEMENTS FOR THE PURCHASE OF THE MOTOR VEHICLE. THE PRIMARY TERMS OF THE FINANCING ARE AS FOLLOWS:

INTEREST RATE BETWEEN ______ % AND ______ % PER ANNUM, TERM BETWEEN _____________ MONTHS AND _____________ MONTHS. MONTHLY PAYMENTS BETWEEN $ ____________ PER MONTH AND $ ____________ PER MONTH BASED ON A DOWN PAYMENT OF $ ______________.

(2) (a) IF SELLER IS NOT ABLE TO ARRANGE FINANCING WITHIN THE TERMS DISCLOSED, THEN SELLER MUST WITHIN SEVEN CALENDAR DAYS OF THE DATE OF SALE MAIL NOTICE TO THE PURCHASER THAT HE HAS NOT BEEN ABLE TO ARRANGE FINANCING.(b) PURCHASER THEN HAS 14 DAYS FROM THE DATE OF SALE TO ELECT, IF PURCHASER CHOOSES, TO RESCIND THE CONTRACT OF SALE PURSUANT TO SECTION 41-3-401.

(c) IN ORDER TO RESCIND THE CONTRACT OF SALE, THE PURCHASER SHALL:(i) RETURN TO SELLER THE MOTOR VEHICLE HE PURCHASED;(ii) PAY THE SELLER AN AMOUNT EQUAL TO THE CURRENT STANDARD MILEAGE RATE FOR THE COST OF OPERATING A MOTOR VEHICLE ESTABLISHED BY THE FEDERAL INTERNAL REVENUE SERVICE FOR EACH MILE THE MOTOR VEHICLE HAS BEEN DRIVEN; AND (iii) COMPENSATE SELLER FOR ANY PHYSICAL DAMAGE TO THE MOTOR VEHICLE.
(3) IN RETURN, SELLER SHALL GIVE BACK TO THE PURCHASER ALL PAYMENTS OR OTHER CONSIDERATION PAID BY THE PURCHASER, INCLUDING ANY DOWN PAYMENT AND ANY MOTOR VEHICLE TRADED IN.
(4) IF THE TRADE-IN HAS BEEN SOLD OR OTHERWISE DISPOSED OF BEFORE THE PURCHASER RESCINDS THE TRANSACTION, THEN THE SELLER SHALL RETURN TO THE PURCHASER A SUM EQUIVALENT TO THE ALLOWANCE TOWARD THE PURCHASE PRICE GIVEN BY THE SELLER FOR THE TRADE-IN, AS NOTED IN THE DOCUMENT OF SALE.
(5) IF PURCHASER DOES NOT ELECT TO RESCIND THE CONTRACT OF SALE AS PROVIDED IN SUBSECTION (2)(b) OF THIS FORM:

(a) THE PURCHASER IS RESPONSIBLE FOR ADHERENCE TO THE TERMS AND CONDITIONS OF THE CONTRACT OR RISKS BEING FOUND IN DEFAULT OF THE TERMS AND CONDITIONS;
(b) THE TERMS AND CONDITIONS OF THE DISCLOSURES SET FORTH IN SECTION (1) OF THIS FORM ARE NOT BINDING ON THE SELLER; AND
(c) IF FINANCING IS NECESSARY FOR THE PURCHASER TO COMPLETE THE PAYMENT TERMS OF THE CONTRACT OF SALE, THE PURCHASER IS SOLELY RESPONSIBLE FOR MAKING ALL THE FINANCING ARRANGEMENTS.
(6) SIGNING THIS DISCLOSURE DOES NOT PROHIBIT THE PURCHASER FROM SEEKING HIS OWN FINANCING.

Trade Ins w/Outstanding Loans

(1) If a dealer takes a trade-in from a retail customer as part of the sale of a motor vehicle and there is an outstanding loan balance owing on the trade-in, then:

(a) the dealer, within seven calendar days of the date of sale, must give written notice to the lienholder, as designated by the purchaser, that the vehicle has been traded in;

(b) the dealer, within 21 calendar days of the date of sale, or within 15 calendar days of receiving payment in full for the motor vehicle it sold, whichever date is earlier, shall remit payment to the lienholder sufficient to pay off the lien on the traded-in motor vehicle, unless the underlying contract of sale has been rescinded before expiration of the 21 days;
(c) if the underlying contract of sale has for any reason been rescinded before the expiration of 21 days, the dealer within five calendar days after the rescission shall give written notice to the lienholder that the contract of sale has been rescinded and that the motor vehicle originally traded in has been returned to the purchaser.
(3) If the final day for performing an act under this section falls on a Saturday, Sunday, or a legal holiday, then the time for performance is extended to the immediately following business day.
(5) A person who trades in a motor vehicle to a dealer and who thereafter sustains loss or damage as a result of a dealer's failure to pay off a properly recorded lien on the traded-in motor vehicle within the time specified by Subsection (1)(b), may bring an action against the offending dealer to recover damages proximately caused by the dealer's failure to comply with the provisions of this section, together with costs and reasonable attorneys' fees.

Third Party Warranty or Service Sales

(1) If a dealer licensed under this chapter sells a third party warranty or service contract to a customer, the dealer shall within 15 days remit the fee paid by the customer to the warranty or service contract company.
(2) Failure of a dealer to remit the fee within 15 days is a ground for dealer license suspension and allows the customer a cause of action against the dealer for damages that otherwise would have been covered by the warranty or service contract.

Buy Back Vehicles [Lemon Law]

(1) (a) A motor vehicle may not be offered, auctioned, sold, leased, transferred, or exchanged by a manufacturer or dealer with the knowledge that it is a buyback vehicle or a nonconforming vehicle without prior written disclosure in a clear and conspicuous manner, in accordance with this section.
(b) This section also applies to buyback vehicles or nonconforming vehicles originally returned to a manufacturer or its agent in another state and subsequently resold, leased, or offered or displayed for resale or lease in this state.
(c) An owner of a motor vehicle who is not a manufacturer or dealer, but who has been given information as required by Subsection (a) or (b) shall give the information, in writing, to any prospective purchaser of the vehicle.
(2) (a) The following disclosure language shall be contained in each contract for the sale or lease of a buyback vehicle or a nonconforming vehicle to a consumer or shall be contained in a form affixed to a contract, lease, bill of sale, or any other document that transfers title:

"DISCLOSURE STATEMENT

Vehicle Identification Number (VIN):
Year: Make: Model:
Prior Title Number: State of Title:
Odometer Reading:
This is a used motor vehicle. It was previously returned to the manufacturer or its agent in exchange for a replacement motor vehicle or a refund because it was alleged or found to have the following nonconformities:
1.
2.

Rights

Penalties

(3) (a) (i) In addition to the penalties in this chapter, if the disclosures in Subsection (2) are not properly executed or if the seller is unable to provide the financing arrangements for the purchaser as provided in Subsection (2)(b) within seven calendar days immediately following the sale date disclosed on the document of sale, then in either case the purchaser may return the purchased motor vehicle to the dealer and receive a complete refund of all money and other consideration given to the dealer for the purchase, including any motor vehicle or property used as a trade-in.

(ii) If the motor vehicle or property used as a trade-in has been sold or otherwise disposed of, the seller shall return to the purchaser the amount of money equivalent to the allowance towards the purchase price given by the dealer for the motor vehicle or property traded in, as noted in the document of sale.
(b) If the purchaser qualifies for the remedies set forth in Subsection (3)(a) and if the purchaser elects to rescind by returning the purchased motor vehicle to the dealer within the prescribed time frame, then the purchaser is liable to the dealer:
(i) for all physical damage to the motor vehicle while in the possession of the purchaser; and
(ii) in an amount equal to the current standard mileage rate for the cost of operating a motor vehicle established by the federal Internal Revenue Service for each mile the motor vehicle was driven between the date the purchaser first acquired possession and the date when the

purchaser returned the motor vehicle to the dealer.

(c) The purchaser is not entitled to the remedy set forth in Subsections (3)(a) and (b) if the purchaser materially misrepresents in writing any information requested by the dealer in an application for financing, financial statement, or similar document customarily used to elicit personal and financial data upon which a credit decision is normally predicated.
(4) (a) A dealer who has complied with Subsection (2)(b), but who has not been able to secure financing as set forth in the disclosure, shall within seven days of the date of sale mail written notice to the purchaser:
(i) disclosing that the dealer has not been able to secure financing as set forth in the disclosure; and
(ii) instructing the purchaser of his right to rescind the contract of sale within 14 calendar days of the date of sale, as provided for in Subsection (2).
(b) (i) The dealer shall mail notification to the purchaser within seven calendar days following the date of sale as set forth in the contract of sale.
(ii) This notice complies with Subsection (4)(b)(i) if it is postmarked before the end of the seventh day following the date of sale and addressed to the purchaser at the address contained in the document of sale.
(iii) If the purchaser's address is not contained on the document of sale, then proof of compliance with the notification provision of this Subsection (4)(b) shall be borne by the dealer.
(iv) If a dealer gives notice in the manner prescribed, the purchaser has 14 calendar days from the date of sale to elect to rescind the contract of sale, in accordance with Subsection (2).
(c) (i) If a dealer executes the disclosure required by Subsection (2)(b), but is not able to secure financing as set forth in the disclosure, and the dealer fails to give written notice to the purchaser within seven days, as provided for in Subsections (4)(a) and (b), then the purchaser may rescind within seven days of the date he first learns that the dealer has not been able to secure financing as set forth in the disclosure.
(ii) Except as provided in this Subsection (4)(c), the purchaser's option to rescind shall be exercised in the manner prescribed in Subsection (3).
(d) If the purchaser does not exercise the option to rescind within the specified time limits in Subsections (3) and (4)(c):
(i) the purchaser is responsible for adherence to the terms and conditions of the contract of sale;
(ii) the dealer is not subject to the financing terms set forth in the disclosure; and
(iii) if financing is necessary for the purchaser to complete the payment terms of the contract of sale, the purchaser is solely responsible for making all the financing arrangements.

(1) If a dealer takes a trade-in from a retail customer as part of the sale of a motor vehicle and there is an outstanding loan balance owing on the trade-in, then:
(a) the dealer, within seven calendar days of the date of sale, must give written notice to the lienholder, as designated by the purchaser, that the vehicle has been traded in;
(b) the dealer, within 21 calendar days of the date of sale, or within 15 calendar days of receiving payment in full for the motor vehicle it sold, whichever date is earlier, shall remit payment to the lienholder sufficient to pay off the lien on the traded-in motor vehicle, unless the underlying contract of sale has been rescinded before expiration of the 21 days;
(c) if the underlying contract of sale has for any reason been rescinded before the expiration of 21 days, the dealer within five calendar days after the rescission shall give written notice to the lienholder that the contract of sale has been rescinded and that the motor vehicle originally traded in has been returned to the purchaser.
(2) A lienholder who has been paid in full by a dealer in accordance with the terms of this section shall deliver to the dealer a properly executed title that releases the lien within:
(a) one business day after the business day on which the funds are received when the funds are in cash, cashier's check, certified check, teller's check, or other certified source of funds;
(b) three business days after the business day on which the funds are received when the funds are in the form of a check drawn on a local originating depository institution; or
(c) six business days after the business day on which the funds are received when the funds are in the form of a check drawn on a nonlocal originating depository institution.
(3) If the final day for performing an act under this section falls on a Saturday, Sunday, or a legal holiday, then the time for performance is extended to the immediately following business day.
(4) A dealer's failure to comply with the provisions of this section subjects the dealer to the sanctions set forth in Section 41-3-701.
(5) A person who trades in a motor vehicle to a dealer and who thereafter sustains loss or damage as a result of a dealer's failure to pay off a properly recorded lien on the traded-in motor vehicle within the time specified by Subsection (1)(b), may bring an action against the offending dealer to recover damages proximately caused by the dealer's failure to comply with the provisions of this section, together with costs and reasonable attorneys' fees.

(1) If a dealer licensed under this chapter sells a third party warranty or service contract to a customer, the dealer shall within 15 days remit the fee paid by the customer to the warranty or service contract company.
(2) Failure of a dealer to remit the fee within 15 days is a ground for dealer license suspension and allows the customer a cause of action against the dealer for damages that otherwise would have been covered by the warranty or service contract.

(1) (a) A motor vehicle may not be offered, auctioned, sold, leased, transferred, or exchanged by a manufacturer or dealer with the knowledge that it is a buyback vehicle or a nonconforming vehicle without prior written disclosure in a clear and conspicuous manner, in accordance with this section.
(b) This section also applies to buyback vehicles or nonconforming vehicles originally returned to a manufacturer or its agent in another state and subsequently resold, leased, or offered or displayed for resale or lease in this state.
(c) An owner of a motor vehicle who is not a manufacturer or dealer, but who has been given information as required by Subsection (a) or (b) shall give the information, in writing, to any prospective purchaser of the vehicle.
(2) (a) The following disclosure language shall be contained in each contract for the sale or lease of a buyback vehicle or a nonconforming vehicle to a consumer or shall be contained in a form affixed to a contract, lease, bill of sale, or any other document that transfers title:

"DISCLOSURE STATEMENT

Vehicle Identification Number (VIN):
Year: Make: Model:
Prior Title Number: State of Title:
Odometer Reading:
This is a used motor vehicle. It was previously returned to the manufacturer or its agent in exchange for a replacement motor vehicle or a refund because it was alleged or found to have the following nonconformities:
1.
2.
3.
4.
5.

THIS DISCLOSURE MUST BE GIVEN BY THE SELLER TO THE BUYER EVERY

TIME THIS VEHICLE IS RESOLD

____________________________________

________________________
(Buyer's Signature) Date"
(b) The text of the disclosure shall be printed in 12 point boldface type except the heading, which shall be in 16 point extra boldface type.
(c) The entire notice shall be boxed.
(d) Each nonconformity shall be listed separately on a numbered line.
(e) A seller must obtain the consumer's acknowledgment of this written disclosure prior to completing a sale, lease, or other transfer of title as evidenced by the consumer's signature within the box containing the disclosure.
(f) Within 30 days after the sale, lease, or other transfer of title of a nonconforming vehicle, the seller shall deliver to the Motor Vehicle Division a copy of the signed written disclosure required for the sale, lease, or other transfer of title of the nonconforming vehicle. The Motor Vehicle Division shall include the disclosure in the nonconforming vehicle's records.
(3) (a) There shall be affixed to the lower corner of the windshield furthest removed from the driver's side of a nonconforming vehicle, a disclosure statement form which shall be readily visible from the exterior of the vehicle. The form shall be in the following configuration and shall

state:

"DISCLOSURE STATEMENT

Vehicle Identification Number (VIN):

_________________________________________
Year: ____________ Make: ____________ Model:

____________________________________
Prior Title Number: ____________ State of Title:

_____________________________________
Odometer Reading:

_____________________________________________________________
Warning: This motor vehicle was previously sold as new. It was subsequently alleged or found to have the following defect(s), malfunction(s), or conditions:
1.
2.
3.
4.
5.

"

THIS DISCLOSURE MUST BE GIVEN BY THE SELLER TO THE BUYER EVERY

TIME THIS VEHICLE IS RESOLD

(b) The disclosure statement shall be at least 4-1/2 inches wide and 5 inches long.
(c) The heading shall be boldface type in capital letters not smaller than 18 point in size and the body copy shall be regular or medium face type not smaller than 12 point in size.
(d) Each nonconformity shall be listed separately on a numbered line.
(e) The motor vehicle and title identification information must be inserted in the spaces provided.

(1) A consignor may take possession of his consigned vehicle at any time the consigned vehicle is in the possession of a consignee, provided that the consignor:
(a) has notified the consignee in writing that he will take possession of the consigned vehicle; and
(b) has paid all outstanding charges owing to the consignee that have been agreed to by the consignor in accordance with Subsection (2).
(2) The agreed upon charges under Subsection (1)(b) shall be:
(a) stated on a form designed by the department; and
(b) included with the written consignment agreement.
(3) A consignee who sells a consigned vehicle shall report to the consignor in writing the exact selling price of the consigned vehicle under either of the following circumstances:
(a) the consignor and consignee agree in writing that the consignor shall receive a percentage of the selling price upon the sale of the vehicle; or
(b) the consignor and consignee renegotiate in writing the selling price of the vehicle.
(4) When a consignee sells a consigned vehicle:
(a) the consignee, within seven calendar days of the date of sale, must give written notice to the consignor that the consigned vehicle has been sold; and
(b) the consignee, within 21 calendar days of the date of sale, or within 15 calendar days of receiving payment in full for the consigned vehicle, whichever date is earlier, shall remit the payment received to the consignor, unless the agreement to purchase the consigned vehicle has been rescinded before expiration of the 21 days.
(5) If the agreement to purchase the consigned vehicle has for any reason been rescinded before the expiration of 21 calendar days of the date of sale, the consignee shall within five calendar days thereafter give written notice to the consignor that the agreement to purchase has been rescinded.
(6) Vehicles on consignment shall be driven with the consignee's dealer plates. All other license plates or registration indicia must be removed from the vehicle.
(7) Prior to driving a consigned vehicle on the consignee's dealer plates, the consignee and the consignor shall execute a written consignment agreement that states:
(a) the party responsible for damage or misuse to a consigned vehicle; and
(b) the permitted uses a consignee may make of a consigned vehicle.
(8) The consignee shall keep the written consignment agreement on file at his principal place of business.

Defenses

Who enforces?

The consumer or the Division of Consumer Protection.