HB 272: "An Act relating to motor vehicle dealers."

00 HOUSE BILL NO. 272 01 "An Act relating to motor vehicle dealers." 02 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03 * Section 1. AS 08.66.015 is amended to read: 04 Sec. 08.66.015. Sale of motor vehicle. (a) A person who does business as a 05 dealer in the state may not offer to sell or sell a motor vehicle as a new [OR 06 CURRENT MODEL] motor vehicle unless the motor vehicle retains the 07 manufacturer's certificate of origin. 08 (b) A person who does business as a dealer in the state may not offer to sell or 09 sell a motor vehicle as a [NEW OR] current model motor vehicle [HAVING A 10 MANUFACTURER'S WARRANTY] unless 11 (1) the dealer has a current sales and service agreement with the 12 manufacturer [AND THE AGREEMENT REQUIRES THE DEALER, UPON 13 DEMAND OF THE MOTOR VEHICLE BUYER, TO PERFORM OR ARRANGE 14 FOR, WITHIN A REASONABLE DISTANCE OF THE DEALER'S PLACE OF 15 BUSINESS IN THE STATE, THE REPAIR AND REPLACEMENT WORK

01 REQUIRED OF THE MANUFACTURER UNDER THE WARRANTY]; or 02 (2) the vehicle is a current model used vehicle received as a trade- 03 in in the normal course [DEALER OFFERS TO GIVE THE BUYER A REBATE 04 TO COVER THE REPAIR AND REPLACEMENT WORK THAT THE DEALER 05 CANNOT PERFORM OR ARRANGE FOR WITHIN A REASONABLE 06 DISTANCE OF THE DEALER'S PLACE] of business. 07 * Sec. 2. AS 45.25.400(b) is amended to read: 08 (b) A motor vehicle dealer may use the term "manufacturer's suggested retail 09 price," "MSRP," or "list price" in an advertisement for the sale of a motor vehicle, 10 subject to the restriction on price comparisons in AS 45.25.450 and the following: 11 (1) the advertised price must reference the final price listed by the 12 manufacturer on the monroney sticker, including accessories and options physically 13 attached to the vehicle at the time of delivery to the dealer, plus any transportation 14 charges, and minus all manufacturer discounts and savings; 15 (2) the manufacturer's suggested retail price or the list price does not 16 include charges added by the dealer or options added to the vehicle by the dealer; and 17 (3) whenever using the term "manufacturer's suggested retail price," 18 "MSRP," or "list price," the dealer [SHALL PROVIDE IN THE ADVERTISEMENT 19 A CLEAR AND CONSPICUOUS DISCLOSURE THAT STATES THAT A SALE] 20 may not represent that a savings occurs at a lower [HAVE OCCURRED AT 21 THAT] price. 22 * Sec. 3. AS 45.25.410 is amended to read: 23 Sec. 45.25.410. Availability of advertised items. A motor vehicle dealer 24 may not advertise a new motor vehicle [VEHICLES AND RELATED GOODS OR 25 SERVICES] at a specified dealer price with the intent not to supply reasonably 26 expected demand, unless the advertisement discloses the number of vehicles in stock 27 at the advertised price. 28 * Sec. 4. AS 45.25.460(a) is amended to read: 29 (a) In addition to the provisions of AS 45.50.471 and regulations adopted 30 under AS 45.50.471, a motor vehicle dealer [MAY NOT] 31 (1) shall include in [EXCLUDE FROM] an advertisement of a motor

01 vehicle for sale all [THAT TAXES, IF APPLICABLE, VEHICLE REGISTRATION 02 FEES, FINANCE CHARGES, CHARGES FOR THE ISSUANCE OF ANY 03 CERTIFICATE OF COMPLIANCE OR NONCOMPLIANCE REQUIRED BY 04 STATUTE, OR OTHER] fees or charges, except fees or charges to be paid to a third 05 party [THAT ARE NOT OTHERWISE INCLUDED IN THE ADVERTISED PRICE 06 WILL BE ADDED TO THE ADVERTISED PRICE AT THE TIME OF THE SALE]; 07 (2) may not represent the dealer document preparation fee as a 08 government fee; 09 (3) may not advertise a specific motor vehicle for sale without 10 identifying the vehicle by either its vehicle identification number, vehicle stocking 11 number, or license number; 12 (4) may not advertise that free merchandise, gifts, or services will be 13 provided by the dealer if a vehicle is purchased; in this paragraph, "free" includes 14 merchandise or services offered for sale at a price less than the dealer's cost for the 15 merchandise or services; 16 (5) may not use the term "rebate," "cash back," or a similar term in 17 advertising the sale of a motor vehicle unless the rebate is expressed in a specific 18 dollar amount and is in fact a rebate offered by the vehicle manufacturer or distributor 19 directly to the retail buyer of the vehicle; 20 (6) may not require a person, in order to receive the advertised credit 21 terms, to pay a higher price for a motor vehicle and any related goods or services than 22 the cash price the same person would have to pay to purchase the same vehicle and 23 related goods or services; 24 (7) may not advertise a guaranteed trade-in allowance or range of 25 allowances unless the guarantee is provided by the manufacturer or distributor; 26 (8) may not affix to a new motor vehicle a supplemental price sticker 27 containing a price that represents the dealer's asking price if the supplemental price 28 sticker exceeds the manufacturer's suggested retail price, unless the supplemental 29 sticker 30 (A) clearly and conspicuously, in the largest print appearing on 31 the sticker other than the print size used for the dealer's name, discloses that

01 the supplemental sticker price is the dealer's asking price, or words of similar 02 meaning, and is not the manufacturer's suggested retail price; 03 (B) clearly and conspicuously discloses the manufacturer's 04 suggested retail price; and 05 (C) states, if the supplemental sticker price is greater than the 06 sum of the manufacturer's suggested retail price and the price of the items 07 added by the dealer, the difference and describes it as additional dealer mark- 08 up; 09 (9) may not advertise or otherwise represent, or knowingly allow to be 10 advertised or represented on behalf of the dealer, that a down payment is not required 11 in connection with the sale of a motor vehicle when a down payment is in fact 12 required; 13 (10) may not advertise an offer for the sale, lease, or purchase of a 14 motor vehicle that [CREATES THE FALSE IMPRESSION THAT THE VEHICLE IS 15 BEING OFFERED BY A PRIVATE PARTY OR A MOTOR VEHICLE AGENT OR 16 THAT] does not contain the name of the dealer; 17 (11) [USE AN ADVERTISEMENT FOR A MOTOR VEHICLE 18 THAT CONTAINS LANGUAGE THAT FALSELY, IMPLICITLY, OR 19 EXPLICITLY SUGGESTS THAT, TO TAKE ADVANTAGE OF AN OFFER, A 20 CONSUMER MUST ACT WITHIN A CERTAIN PERIOD OF TIME WHEN, IN 21 FACT, THE VEHICLES WILL CONTINUE TO BE AVAILABLE AT THE 22 ADVERTISED PRICE BEYOND THAT TIME PERIOD; 23 (12) REQUIRE A BUYER OF A NEW MOTOR VEHICLE, AS A 24 CONDITION OF SALE AND DELIVERY, TO ALSO PURCHASE SPECIAL 25 FEATURES, APPLIANCES, ACCESSORIES, OR EQUIPMENT NOT DESIRED 26 OR REQUESTED BY THE BUYER UNLESS THE SPECIAL FEATURES, 27 APPLIANCES, EQUIPMENT, OR ACCESSORIES ARE ALREADY INSTALLED 28 ON THE VEHICLE WHEN RECEIVED BY THE DEALER; 29 (13)] may not represent and sell as a new motor vehicle a 30 demonstrator vehicle or a motor vehicle that is a used motor vehicle; in this paragraph, 31 "demonstrator vehicle"

01 (A) means a motor vehicle 02 (i) that has been assigned by a dealer for use by the 03 dealership as an executive vehicle for promotional purposes, including 04 being driven in the community; 05 (ii) that has not been licensed by a retail buyer; and 06 (iii) the title of which has not been transferred to a retail 07 buyer; 08 (B) does not include a motor vehicle that has only been driven 09 to demonstrate the motor vehicle to a prospective buyer; 10 (12) may not [(14)] advertise that the dealer finances any person or 11 does not reject any person's credit, or make similar claims; 12 (13) may not [(15)] advertise or make a statement, declaration, or 13 representation in an advertisement that cannot be substantiated in fact; the burden of 14 proof of the factual basis for the statement, declaration, or representation is on the 15 dealer. 16 * Sec. 5. AS 45.25.510(a) is amended to read: 17 (a) Before entering into a new motor vehicle sales contract, a new motor 18 vehicle dealer shall disclose in writing to a buyer of the new motor vehicle any known 19 damage and repair to the new motor vehicle if the damage exceeds five percent of the 20 manufacturer's suggested retail price as calculated at the dealer's authorized warranty 21 rate for labor and parts, or $1,000, whichever amount is greater. A new motor 22 vehicle dealer is not required to disclose to a buyer that glass, tires, bumpers, or 23 cosmetic parts of a new motor vehicle were damaged at any time if the damaged item 24 has been replaced with original or comparable equipment. A replaced part is not part 25 of the cumulative damage required to be disclosed under this subsection. 26 * Sec. 6. AS 45.25.610(c) is amended to read: 27 (c) If [NOTWITHSTANDING THE REQUIREMENTS OF THIS SECTION, 28 IF] a motor vehicle dealer arranges financing for a buyer, the motor vehicle dealer 29 may deliver the motor vehicle to the buyer before final approval by the financing 30 entity if 31 (1) the buyer and seller sign an agreement separate from the motor

01 vehicle installment contract on an 8 1/2 x 11 inch sheet of paper that clearly and 02 conspicuously informs the buyer that final financing arrangements have not yet been 03 approved and that clearly sets out the amount that will be financed, the annual 04 percentage rate of the finance charge, the amount of the finance charge, the number 05 and frequency of payments, and the amount of each payment; 06 (2) the separate agreement clearly and conspicuously informs the 07 buyer that accepting delivery of the vehicle before final financing approval obligates 08 the buyer to terms of the motor vehicle sales contract if the terms on the separate 09 agreement are identical to the terms finally approved by the financing entity; and 10 (3) the separate agreement provides that the separate agreement, the 11 motor vehicle sales contract, and any and all other conditions of the purchase will be 12 void if any of the terms contained in the separate agreement are changed by either the 13 motor vehicle dealer or the financing institution as a condition of sale or final 14 financing approval. 15 * Sec. 7. AS 45.25.610(d) is amended to read: 16 (d) If a buyer's final financing is not approved [WITHIN SEVEN BUSINESS 17 DAYS FROM THE DATE OF THE SEPARATE AGREEMENT] and, as a result, the 18 transaction is not completed, the motor vehicle dealer shall return the buyer's entire 19 down payment, and the buyer's trade-in, if any, shall be returned to the buyer in the 20 same condition and with not more than 100 [10] miles accumulated on the odometer 21 from when the motor vehicle was delivered to the motor vehicle dealer. 22 * Sec. 8. AS 45.25.460(b) and 45.25.610(b) are repealed.