HB4377 99TH GENERAL ASSEMBLY

LRB099 15636 KTG 39929 b

99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
HB4377

Introduced , by Rep. Rita Mayfield

SYNOPSIS AS INTRODUCED:

815 ILCS 505/2L

from Ch. 121 1/2, par. 262L

Amends the Consumer Fraud and Deceptive Business Practices Act. Removes provisions requiring all new and used motor vehicle dealers to pay a percentage of certain repairs for power train components. Adds provisions regarding used motor vehicle dealers and auction companies. Provides that used motor vehicle dealers and certain auction companies may not exclude, modify, or disclaim an implied warranty of merchantability before the expiration of the 15th calendar day after delivery of the used motor vehicle or before the used motor vehicle is driven 500 miles after delivery, whichever occurs first. Exempts the sale of antique and collector vehicles from the new provisions. Provides that an implied warranty of merchantability does not extend to damage that occurs after the sale of the used motor vehicle that results from certain conduct, including: off-road use, racing, neglect, and failure to perform regular maintenance. Sets forth remedies and defenses.

A BILL FOR

AN ACT concerning business.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Consumer Fraud and Deceptive Business Practices Act is amended by changing Section 2L as follows:

(815 ILCS 505/2L) (from Ch. 121 1/2, par. 262L)

Sec. 2L. Used motor vehicles; modification or disclaimer of implied warranty of merchantability limited.

(a) Any retail sale of a motor vehicle made after the effective date of this amendatory Act of the 99th General Assembly January 1, 1968 to a consumer by a new motor vehicle dealer or used motor vehicle dealer within the meaning of Chapter 5 of the Illinois Vehicle Code is made subject to this Section.

(b) Any motor vehicle sale conducted by a motor vehicle dealer licensed under Section 5-102 of the Illinois Vehicle Code or by an auction company at an auction that is open to the general public may not exclude, modify, or disclaim the implied warranty of merchantability prescribed in Section 2-314 of the Uniform Commercial Code or limit the remedies for a breach of the warranty before midnight of the 15th calendar day after delivery of a used motor vehicle or until a used motor vehicle is driven 500 miles after delivery, whichever is earlier. In calculating time under this Section, a day on which the warranty is breached and all subsequent days in which the used motor vehicle fails to conform with the implied warranty of merchantability are excluded. In calculating distance under this Section, the miles driven to obtain or in connection with the repair, servicing, or testing of a used motor vehicle that fails to conform with the implied warranty of merchantability are excluded. An attempt to exclude, modify, or disclaim the implied warranty of merchantability or to limit the remedies for a breach of the warranty in violation of this Section renders a purchase agreement voidable at the option of the purchaser.

(c) An implied warranty of merchantability is met if a used motor vehicle functions substantially free of a defect that significantly limits the use of the used motor vehicle for the ordinary purpose of transportation on any public highway. The implied warranty of merchantability expires at midnight of the 15th calendar day after delivery of a used motor vehicle or until a used motor vehicle is driven 500 miles after delivery, whichever is earlier. In calculating time, a day on which the implied warranty of merchantability is breached is excluded and all subsequent days in which the used motor vehicle fails to conform with the warranty are also excluded. In calculating distance, the miles driven to obtain or in connection with the repair, servicing, or testing of a used motor vehicle that fails to conform with the implied warranty of merchantability are excluded.

(d) An implied warranty of merchantability does not extend to damage that occurs after the sale of the used motor vehicle that results from:

(1) off-road use;

(2) racing;

(3) towing;

(4) abuse;

(5) misuse;

(6) neglect;

(7) failure to perform regular maintenance; and

(8) failure to maintain adequate oil, coolant, and other required fluids or lubricants.

(e) If the implied warranty of merchantability described in this Section is breached, the consumer shall give reasonable notice to the seller within 15 days after the date of the breach. Before the consumer exercises another remedy pursuant to Article 2 of the Uniform Commercial Code, the seller shall have a reasonable opportunity to repair the used motor vehicle. The consumer shall pay one-half of the cost of the first 2 repairs necessary to bring the used motor vehicle into compliance with the warranty. The payments by the consumer are limited to a maximum payment of $25 for each repair.

(f) The maximum liability of a seller for repairs pursuant to this Section is limited to the purchase price paid for the used motor vehicle, to be refunded to the consumer or lender, as applicable, in exchange for return of the vehicle.

(g) An agreement for the sale of a used motor vehicle by a used motor vehicle dealer subject to this Section is voidable at the option of the consumer, unless it contains on its face the following conspicuous statement printed in boldface, 10-point, or larger type set off from the body of the agreement:

"Illinois law requires that this vehicle will be fit for the ordinary purposes for which the vehicle is used for 15 days or 500 miles after delivery, whichever is earlier, except with regard to particular defects disclosed on the first page of this agreement. You (the consumer) will have to pay up to $25 for each of the first 2 repairs if the warranty is violated.".

(h) The inclusion in the agreement of the statement prescribed in subsection (g) of this Section does not create an express warranty.

(i) A consumer of a used motor vehicle may waive the implied warranty of merchantability only for a particular defect in the vehicle and only if all of the following conditions are satisfied:

(1) the motor vehicle dealer subject to this Section fully and accurately discloses to the consumer that because of circumstances unusual to the business of the used motor vehicle dealer, the used motor vehicle has a particular defect;

(2) the consumer agrees to buy the used motor vehicle after disclosure of the defect; and

(3) before the sale, the consumer indicates agreement to the waiver by signing and dating the following conspicuous statement that is printed on the first page of the sales agreement or on a separate document in boldface, 10-point, or larger type and that is written in the language in which the presentation was made:

"Attention consumer: sign here only if the dealer has told you that this vehicle has the following problem or problems and you agree to buy the vehicle on those terms: 1......................................................... 2......................................................... 3.........................................................".

(j) A used motor vehicle dealer subject to this Section has the burden to prove by a preponderance of the evidence that the dealer complied with subsection (i) of this Section.

(k) A consumer or seller that is aggrieved by a transaction pursuant to this Section and that seeks a legal remedy shall pursue an appropriate remedy prescribed in Article 2 of the Uniform Commercial Code and shall comply with the requirements prescribed in that Article.

(l) It shall be an affirmative defense to any claim under this Section that:

(1) an alleged nonconformity does not substantially impair the use and market value of the motor vehicle;

(2) a nonconformity is the result of abuse, neglect, or unauthorized modifications or alterations of the motor vehicle;

(3) a claim by a consumer was not filed in good faith; or

(4) any other affirmative defense allowed by law.

(m) Other than the 15 day, 500 mile implied warranty of merchantability identified herein, a motor vehicle dealer is not required to provide any further express or implied warranties to a purchasing consumer unless:

(1) the motor vehicle dealer is required by federal or State law to provide a further express or implied warranty; or

(2) the motor vehicle dealer fully informs and discloses to the consumer that the vehicle is being sold without any further express or implied warranties, other than the 15 day mile implied warranty of merchantability identified in this Section.

(n) This Section does not apply to the sale of antique vehicles, as defined in the Illinois Vehicle Code, or to collector motor vehicles.

(a) The dealer is liable to the purchasing consumer for the following share of the cost of the repair of Power Train components for a period of 30 days from date of delivery, unless the repairs have become necessary by abuse, negligence, or collision. The burden of establishing that a claim for repairs is not within this Section shall be on the selling dealer. The dealer's share of such repair costs is:

(1) in the case of a motor vehicle which is not more than 2 years old, 50%;

(2) in the case of a motor vehicle which is 2 or more, but less than 3 years old, 25%;

(3) in the case of a motor vehicle which is 3 or more, but less than 4 years old, 10%; and

(4) in the case of a motor vehicle which is 4 or more years old, none.

(b) Notwithstanding the foregoing, such a dealer and a purchasing consumer may negotiate a sale and purchase that is not subject to this Section if there is stamped on any purchase order, contract, agreement, or other instrument to be signed by the consumer as a part of that transaction, in at least 10-point bold type immediately above the signature line, the following:

"THIS VEHICLE IS SOLD AS IS WITH NO WARRANTY

AS TO MECHANICAL CONDITION"

(c) As used in this Section, "Power Train components" means the engine block, head, all internal engine parts, oil pan and gaskets, water pump, intake manifold, transmission, and all internal transmission parts, torque converter, drive shaft, universal joints, rear axle and all rear axle internal parts, and rear wheel bearings.

(d) The repair liability means that the dealer will make necessary Power Train component repairs in his shop, or in the shop of his service affiliate, on the basis of his regular list price charge for parts and labor, where the flat rate list price does not exceed 50% of the selling price of the vehicle at the time repairs are requested.

(e) The age of the vehicle shall be measured according to the manufacturer's model year designation as shown on the Certificate of Title or Registration Certificate. Vehicles shall be designated as current year models, one year old, 2 year old, and so forth according to the time that has elapsed since January 1 of the appropriate model year so designated.

(f) This Section does not preclude the issuance of a warranty or guarantee by a motor vehicle dealer or motor car manufacturer that meets or exceeds the basic provisions of paragraph (a).

(g) After the effective date of this amendatory Act of 1989, executives' and officials' cars when so advertised shall have been used exclusively by executives of the parent motor car manufacturer's personnel or by an executive of an authorized dealer in the same make of car. These cars, so advertised, shall not have been sold to a member of the public prior to the appearance of the advertisement.

Any person who violates this Section commits an unlawful practice within the meaning of this Act.

(Source: P.A. 86-351; 87-1140.)