AN ACT Relating to motor vehicle warranties; adding a new chapter to Title 19 RCW; and providing an effective date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. Unless the context requires to the contrary, the definitions in this section apply throughout this chapter.

(1) "Consumer" means the purchaser, other than for purposes of resale, of a used motor vehicle normally used for personal, family, or household purposes and subject to a warranty, and the spouse or child of the purchaser if the motor vehicle is transferred to the spouse or child during the duration of any warranty applicable to the motor vehicle, and any other person entitled by the terms of the warranty to enforce the obligations of the warranty.

(2) "Used motor vehicle" means a passenger motor vehicle, excluding motorcycles, motor homes, and off-road vehicles, that has been driven more than the limited use necessary in moving or road testing a new vehicle prior to delivery.

(3) "Dealer" means a person or business that sells or offers for sale a used vehicle after selling or offering for sale three or more used vehicles in the previous twelve-month period, but does not include a bank or financial institution, a business selling a used vehicle to an employee of that business, a lessor selling a leased vehicle to that vehicle's lessee, a family member of the lessee, or an employee of the lessee, or the state, its agencies, and political subdivisions of the state.

(4) "Warranty" means any undertaking in connection with the sale by a dealer of a used motor vehicle to refund, repair, replace, maintain, or take other action with respect to the used motor vehicle and provided at no extra charge beyond the price of the used motor vehicle.

(5) "Service contract" means a contract in writing for any period of time or any specific mileage to refund, repair, replace, maintain, or take other action with respect to a used motor vehicle and provided at an extra charge beyond the price of the used motor vehicle.

(6) "Repair insurance" means a contract in writing for any period of time or any specific mileage to refund, repair, replace, maintain, or take other action with respect to a used motor vehicle and which is regulated by the insurance commissioner.

NEW SECTION. Sec. 2. (1) A dealer shall not sell a used motor vehicle to a consumer without giving the consumer a written warranty which at minimum applies for the following terms:

(a) If the used motor vehicle has thirty-six thousand miles or less, the warranty shall be at minimum sixty days or three thousand miles, whichever comes first.

(b) If the used motor vehicle has more than thirty-six thousand miles, the warranty shall be at minimum thirty days or one thousand miles, whichever comes first.

(2) The written warranty shall require the dealer or the dealer's agent to repair or, at the election of the dealer, reimburse the consumer for the reasonable cost of repairing the failure of a covered part. Covered parts shall at least include the following items:

(a) Engine. All lubricated parts, water pump, fuel pump, manifolds, engine block, cylinder head, rotary engine housings and flywheel.

(b) Transmission. The transmission case, internal parts, and the torque converter.

(c) Drive axle. Front and rear drive axle housings and internal parts, axle shafts, propeller shafts and universal joints.

(d) Brakes. Master cylinder, vacuum assist booster, wheel cylinders, hydraulic lines and fittings and disc brake calipers.

(e) Radiator.

(f) Steering. The steering gear housing and all internal parts, power steering pump, valve body, piston and rack.

(g) Alternator, generator, starter, ignition system excluding the battery.

(3) The repair or reimbursement shall be made by the dealer notwithstanding the fact that the warranty period has expired, provided the consumer notifies the dealer of the failure of a covered part within the specified warranty period.

(4) If the manufacturer's warranty is in effect at the time of the sale of the used motor vehicle, then the warranty specified in this section shall be required only to the extent that the warranty required by this section exceeds the manufacturer's warranty in coverage or duration.

(5) The written warranty may contain additional language excluding coverage:

(a) For a failure of a covered part caused by a lack of customary maintenance;

(b) For a failure of a covered part caused by collision, abuse, negligence, theft, vandalism, fire or other casualty and damage from the environment (windstorm, lightning, road hazards, etc.);

(c) If the odometer has been stopped or altered such that the vehicle's actual mileage cannot be readily determined or if any covered part has been altered such that a covered part was thereby caused to fail;

(d) For maintenance services and the parts used in connection with such services such as seals, gaskets, oil, or grease unless required in connection with the repair of a covered part;

(e) For a motor tuneup;

(f) For a failure resulting from racing or other competition;

(g) For a failure caused by towing a trailer or another vehicle unless the used motor vehicle is equipped for this as recommended by the manufacturer;

(h) If the used motor vehicle is used to carry passengers for hire;

(i) If the used motor vehicle is rented to someone else;

(j) For repair of valves and/or rings to correct low compression and/or oil consumption which are considered normal wear;

(k) To the extent otherwise permitted by law, for property damage arising or allegedly arising out of the failure of a covered part; and

(l) To the extent otherwise permitted by law, for loss of the use of the used motor vehicle, loss of time, inconvenience, commercial loss or consequential damages.

NEW SECTION. Sec. 3. (1) If the dealer or the dealer's agent fails to correct a malfunction or defect as required by the warranty specified in this section that substantially impairs the value of the used motor vehicle to the consumer after a reasonable period of time, the dealer shall accept return of the used motor vehicle from the consumer and refund to the consumer the full purchase price including sales or use tax, less a reasonable allowance for any damage not attributable to normal wear or usage, and adjustment for any modifications which either increase or decrease the market value of the vehicle. In determining the purchase price to be refunded, the purchase price shall de deemed equal to the sum of the actual cash difference paid for the used motor vehicle plus, if the dealer elects to not return any vehicles traded-in by the consumer, the wholesale value of any such traded-in vehicles as listed in the national auto dealers association used car guide, or such other guide as may be specified in regulations promulgated by the director of licensing, as adjusted for mileage, improvements, and any major physical or mechanical defects in the traded-in vehicle at the time of trade-in. The contract of sale for the used motor vehicle shall include conspicuous language indicating that if the consumer is entitled to a refund under this section, the value of any vehicle traded-in by the consumer, if the dealer elects to not return it to the consumer, for purposes of determining the amount of such refund will be determined by reference to the national auto dealers association used car guide wholesale value, or such other guide as may be approved by the director of licensing, as adjusted for mileage, improvements, and any major physical or mechanical defects, rather than the value listed in the sales contract. Refunds shall be made to the consumer and lienholder, if any, as their interests may appear on the records of ownership kept by the department of licensing. If the amount to be refunded to the lienholder will be insufficient to discharge the lien, the dealer shall notify the consumer in writing by registered or certified mail that the consumer has thirty days to pay the lienholder the amount which, together with the amount to be refunded by the dealer, will be sufficient to discharge the lien. The notice to the consumer shall contain conspicuous language warning the consumer that failure to pay such funds to the lienholder within thirty days will terminate the dealer's obligation to provide a refund. If the consumer fails to make the payment within thirty days, the dealer has no further responsibility to provide a refund under this section. Alternatively, the dealer may elect to offer to replace the used motor vehicle with a comparably priced vehicle, with such adjustment in price as the parties may agree to. The consumer shall not be obligated to accept a replacement vehicle, but may instead elect to receive the refund provided under this section. It is an affirmative defense to any claim under this section that:

(a) The malfunction or defect does not substantially impair such value; or

(b) The malfunction or defect is the result of abuse, neglect, or unreasonable modifications or alterations of the used motor vehicle.

(2) It shall be presumed that a dealer has had a reasonable opportunity to correct a malfunction or defect in a used motor vehicle, if:

(a) The same malfunction or defect has been subject to repair three or more times by the selling dealer or the dealer's agent within the warranty period, but the malfunction or defect continues to exist; or

(b) The vehicle is out of service by reason of repair or malfunction or defect for a cumulative total of fifteen or more days during the warranty period. The period shall not include days when the dealer is unable to complete the repair because of the unavailability of necessary repair parts. The dealer shall be required to exercise due diligence in attempting to obtain necessary repair parts. However, if a vehicle has been out of service for a cumulative total of forty-five days, even if a portion of that time is attributable to the unavailability of replacement parts, the consumer shall be entitled to the replacement or refund remedies provided in this section.

(3) The term of any warranty, service contract, or repair insurance shall be extended by any time period during which the used motor vehicle is in the possession of the dealer or the dealers agent for the purpose of repairing the used motor vehicle under the terms and obligations of the warranty, service contract, or repair insurance.

(4) The term of any warranty, service contract, or repair insurance, and the fifteen day out-of-service period, shall be extended by any time during which repair services are not available to the consumer because of a war, invasion, strike, fire, flood, or other natural disaster.

NEW SECTION. Sec. 4. (1) Any agreement entered into by a consumer for the purchase of a used motor vehicle which waives, limits, or disclaims the rights set forth in this chapter are void as contrary to public policy. Further, if a dealer fails to give the written warranty required by this chapter, the dealer nevertheless shall be deemed to have given the warranty as a matter of law.

(2) Nothing in this section in any way limits the rights or remedies which are otherwise available to a consumer under any other law.

(3) This chapter does not apply to used motor vehicles sold for less than one thousand five hundred dollars. Further, this chapter does not apply to the sale of antique vehicles registered pursuant to RCW 46.16.310.

NEW SECTION. Sec. 5. (1) If a dealer has established or participates in an informal dispute settlement procedure which complies in all respects with Part 703 of Title 16 of the Code of Federal Regulations, the provisions of this chapter concerning refunds or replacement do not apply to any consumer who has not first resorted to such procedure.

(2) In no event is a consumer who has resorted to an informal dispute settlement procedure precluded from seeking the rights or remedies available by law.

(3) In an action brought to enforce this chapter, the court may award reasonable attorney's fees to a prevailing plaintiff.

(4) Any action brought pursuant to this chapter shall be commenced within four years of the date of original delivery of the used motor vehicle to the consumer.

NEW SECTION. Sec. 6. Sections 1 through 5 of this act shall constitute a new chapter in Title 19 RCW.

NEW SECTION. Sec. 7. This act shall take effect on November 1, 1985.