March 20, 2018

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New York City proposes new disclosure requirements for used car dealers

The New York City Department of Consumer Affairs (DCA) has proposed new rules for used car dealers that would require dealers to provide the following disclosures to buyers:

  • A financing disclosure that includes the “sale terms,” “financing terms,” and pricing information for add-on products and services.  The financing terms include three APRs: “the Annual Percentage Rate (APR)” (presumably, the contract APR),  the “lowest APR offered to buyer by any finance company for loan with same term and down payment,” and the “APR offered to buyer by selected finance company”
  • A disclosure of the buyer’s right to cancel

The proposal would also require dealers to conspicuously post a “Used Car Consumer Bill of Rights” in any office or area of the dealer’s location where consumers negotiate and execute sales contracts and maintain an “automobile contract cancellation option report” that must be made available to the DCA upon request.

The American Financial Services Association sent a letter to the DCA commenting on the proposal in which AFSA stated that it believes the proposed disclosures “would confuse consumers and provide little additional consumer benefit.”  AFSA specifically took aim at the proposal’s requirement for three APRs to be disclosed.  AFSA observed that “in many cases, these rates will be different, forcing a consumer to interpret and understand as many as three different rates for the same transaction and may leave a consumer with the impression that the contract APR is lower than it actually is.”

Copyright © by Ballard Spahr LLP


About this Author

Barbara S. Mishkin, Ballard Spahr, Philadelphia, Deceptive Practices Lawyer, Fair Debt Collection Practices Act, Gramm Leach Bliley
Of Counsel

Barbara Mishkin focuses on consumer compliance and banking law. The federal laws with which Ms. Mishkin has dealt extensively include the Truth in Lending Act, Equal Credit Opportunity Act, Real Estate Settlement Procedures Act, Fair Credit Reporting Act, Fair Debt Collection Practices Act, and Gramm-Leach-Bliley Act. She also has significant experience with state usury and lender licensing laws, as well as state laws prohibiting unfair and deceptive acts and practices.

American Bar Association, member, Consumer Financial Services Committee;...