New York City Adopts New Requirements For Used Car Dealers
The New York City Department of Consumer Affairs (DCA) has adopted new rules for used car dealers, requiring all licensed dealers to make additional disclosures to consumers and creating a new consumer bill of rights for the industry. The new rules went into effect on June 24, 2018.
Under the new rules, dealers must provide a financing statement in a prescribed form prior to the execution of any retail installment contract (RIC). The form includes “sale terms,” “financing terms,” and pricing information for any add-on products or services. The financing terms must include two annual percentage rates: the contract APR (which presumably is the APR for the financing that the buyer will actually be receiving and will be the APR that is disclosed in the TILA disclosures that are part of the buyer’s RIC) and the “lowest APR offered to buyer by any finance company with the same term, number of payments, collateral, and down payment” (which presumably is intended to reveal to the buyer if the dealer could have obtained comparable financing for the buyer at a lower APR).
Consumers must also be given an automobile contract cancellation option form that offers a consumer a two-weekday cancellation period. A consumer may use this form to cancel the purchase and receive a full refund.
Finally, the new rules create a “Used Car Consumer Bill of Rights,” a copy of which must be provided to each consumer and posted conspicuously anywhere contracts are negotiated or executed. The posting should be made in English and any other language in which the dealer does business, so long as the DCA has issued a version of the bill of rights in that other language.