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HOT TOPICS
2015 GNYADA Membership Directory
51
DAMAGE DISCLOSURE REQUIREMENTS
When is Damage Disclosure Required?
New York requires dealers to disclose damages to a new vehicle that occurred prior to sale and delivery to
a consumer or another dealer when those damages exceed a threshold amount. In NY, if the retail cost of
parts and labor to repair physical damage exceeds 5% of MSRP, dealers must give a written notice to the
consumer.
Manufacturers are Covered, too
NY law also requires disclosure by manufacturers, distributors, and dealers who are transferring or selling
a damaged vehicle to another dealer. A written notice of the repairs must be provided before the buyer
pays for the vehicle.
Exception
No notice requirement applies to identical replacement of stolen or damaged accessories or their
components used to make the repairs.
Penalties
A consumer who does not receive the
written notice is entitled to a full refund of
the purchase price of the vehicle plus any
trade-in allowance plus fees and charges
(within four months of the purchase). The
law includes a deduction for mileage using
a complicated formula.
A retail dealer who suffers a loss because
they were not notified of prior damages
by a manufacturer, distributor, or another
retail dealer is entitled to reimbursement
from the seller who failed to provide such
notice.
In addition, any dealer or his/her employee
who violates this law is subject to a fine of
up to $50 for the first offense and $250 for
each subsequent offense.
GNYADA recommends that you keep a
signed copy of a Damage Disclosure Form
in the deal jacket. See sample form at right.