BILL REQ. #:  S-4539.1 

Read first time 01/23/08.   Referred to Committee on Consumer Protection & Housing.

     AN ACT Relating to used vehicle purchases; amending RCW 46.70.011; adding new sections to chapter 46.70 RCW; and creating new sections.

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

NEW SECTION.  Sec. 1   This act may be known and cited as the used vehicle buyer's bill of rights act.

Sec. 2   RCW 46.70.011 and 2006 c 364 s 1 are each amended to read as follows:
     As used in this chapter:
     (1) "Vehicle" means and includes every device capable of being moved upon a public highway and in, upon, or by which any persons or property is or may be transported or drawn upon a public highway, excepting devices moved by human or animal power or used exclusively upon stationary rails or tracks.
     (2) "Motor vehicle" means every vehicle which is self-propelled and every vehicle which is propelled by electric power obtained from overhead trolley wires, but not operated upon rails, and which is required to be registered and titled under this title ((46 RCW, Motor Vehicles)).
     (3) "Recreational vehicle" means a travel trailer, motor home, truck camper, or camping trailer that is primarily designed and used as temporary living quarters, is either self-propelled or mounted on or drawn by another vehicle, is transient, is not occupied as a primary residence, and is not immobilized or permanently affixed to a mobile home lot.
     (4) "Vehicle dealer" means any person, firm, association, corporation, or trust, not excluded by subsection (5) of this section, engaged in the business of buying, selling, listing, exchanging, offering, brokering, leasing with an option to purchase, auctioning, soliciting, or advertising the sale of new or used vehicles, or arranging or offering or attempting to solicit or negotiate on behalf of others, a sale, purchase, or exchange of an interest in new or used motor vehicles, irrespective of whether the motor vehicles are owned by that person. Vehicle dealers shall be classified as follows:
     (a) A "motor vehicle dealer" is a vehicle dealer that deals in new or used motor vehicles, or both;
     (b) A "mobile home and travel trailer dealer" is a vehicle dealer that deals in mobile homes, park trailers, or travel trailers, or more than one type of these vehicles;
     (c) A "miscellaneous vehicle dealer" is a vehicle dealer that deals in motorcycles or vehicles other than motor vehicles or mobile homes and travel trailers or any combination of such vehicles;
     (d) A "recreational vehicle dealer" is a vehicle dealer that deals in travel trailers, motor homes, truck campers, or camping trailers that are primarily designed and used as temporary living quarters, are either self-propelled or mounted on or drawn by another vehicle, are transient, are not occupied as a primary residence, and are not immobilized or permanently affixed to a mobile home lot.
     (5) The term "vehicle dealer" does not include, nor do the licensing requirements of RCW 46.70.021 apply to, the following persons, firms, associations, or corporations:
     (a) Receivers, trustees, administrators, executors, guardians, or other persons appointed by, or acting under a judgment or order of, any court; or
     (b) Public officers while performing their official duties; or
     (c) Employees of vehicle dealers who are engaged in the specific performance of their duties as such employees; or
     (d) Any person engaged in an isolated sale of a vehicle in which that person is the registered or legal owner, or both, thereof; or
     (e) Any person, firm, association, corporation, or trust, engaged in the selling of equipment other than vehicles, subject to registration, used for agricultural or industrial purposes; or
     (f) A real estate broker licensed under chapter 18.85 RCW, or an affiliated licensee, who, on behalf of another negotiates the purchase, sale, lease, or exchange of a manufactured or mobile home in conjunction with the purchase, sale, exchange, rental, or lease of the land upon which the manufactured or mobile home is, or will be, located; or
     (g) Owners who are also operators of the special highway construction equipment or of the highway construction equipment for which a vehicle license and display vehicle license number plate is required as defined in RCW 46.16.010; or
     (h) Any bank, trust company, savings bank, mutual savings bank, savings and loan association, credit union, and any parent, subsidiary, or affiliate thereof, authorized to do business in this state under state or federal law with respect to the sale or other disposition of a motor vehicle owned and used in their business; or with respect to the acquisition and sale or other disposition of a motor vehicle in which the entity has acquired an interest as a lessor, lessee, or secured party; or
     (i) Any person who is regularly engaged in the business of acquiring leases or installment contracts by assignment, with respect to the acquisition and sale or other disposition of a motor vehicle in which the person has acquired an interest as a result of the business.
     (6) "Vehicle salesperson" means any person who for any form of compensation sells, auctions, leases with an option to purchase, or offers to sell or to so lease vehicles on behalf of a vehicle dealer.
     (7) "Department" means the department of licensing, which shall administer and enforce the provisions of this chapter.
     (8) "Director" means the director of licensing.
     (9) "Manufacturer" means any person, firm, association, corporation, or trust, resident or nonresident, who manufactures or assembles new and unused vehicles or remanufactures vehicles in whole or in part and further includes the terms:
     (a) "Distributor," which means any person, firm, association, corporation, or trust, resident or nonresident, who in whole or in part offers for sale, sells, or distributes any new and unused vehicle to vehicle dealers or who maintains factory representatives.
     (b) "Factory branch," which means a branch office maintained by a manufacturer for the purpose of selling or offering for sale, vehicles to a distributor, wholesaler, or vehicle dealer, or for directing or supervising in whole or in part factory or distributor representatives, and further includes any sales promotion organization, whether a person, firm, or corporation, which is engaged in promoting the sale of new and unused vehicles in this state of a particular brand or make to vehicle dealers.
     (c) "Factory representative," which means a representative employed by a manufacturer, distributor, or factory branch for the purpose of making or promoting for the sale of their vehicles or for supervising or contracting with their dealers or prospective dealers.
     (10) "Established place of business" means a location meeting the requirements of RCW 46.70.023(1) at which a vehicle dealer conducts business in this state.
     (11) "Principal place of business" means that dealer firm's business location in the state, which place the dealer designates as their principal place of business.
     (12) "Subagency" means any place of business of a vehicle dealer within the state, which place is physically and geographically separated from the principal place of business of the firm or any place of business of a vehicle dealer within the state, at which place the firm does business using a name other than the principal name of the firm, or both.
     (13) "Temporary subagency" means a location other than the principal place of business or subagency within the state where a licensed vehicle dealer may secure a license to conduct the business and is licensed for a period of time not to exceed ten days for a specific purpose such as auto shows, shopping center promotions, tent sales, exhibitions, or similar merchandising ventures. No more than six temporary subagency licenses may be issued to a licensee in any twelve-month period.
     (14) "Wholesale vehicle dealer" means a vehicle dealer who buys and sells other than at retail.
     (15) "Retail vehicle dealer" means a vehicle dealer who may buy and sell at both wholesale and retail.
     (16) "Listing dealer" means a used mobile home dealer who makes contracts with sellers who will compensate the dealer for obtaining a willing purchaser for the seller's mobile home.
     (17) "Auction" means a transaction conducted by means of exchanges between an auctioneer and the members of the audience, constituting a series of oral invitations for offers for the purchase of vehicles made by the auctioneer, offers to purchase by members of the audience, and the acceptance of the highest or most favorable offer to purchase.
     (18) "Auction company" means a sole proprietorship, partnership, corporation, or other legal or commercial entity licensed under chapter 18.11 RCW that only sells or offers to sell vehicles at auction or only arranges or sponsors auctions.
     (19) "Buyer's agent" means any person, firm, partnership, association, limited liability company, limited liability partnership, or corporation retained or employed by a consumer to arrange for or to negotiate, or both, the purchase or lease of a new motor vehicle on behalf of the consumer, and who is paid a fee or receives other compensation from the consumer for its services.
     (20) "New motor vehicle" means any motor vehicle that is self-propelled and is required to be registered and titled under Title 46 RCW, has not been previously titled to a retail purchaser or lessee, and is not a "used vehicle" as defined under RCW 46.04.660.
     (21) "Used vehicle" has the same meaning as in RCW 46.04.660.
     (22) "Service contract" has the same meaning as in RCW 48.110.020.
     (23) "Retail installment contract" has the same meaning as in RCW 63.14.010.
     (24) "Theft deterrent device" means any of the following devices installed by the vehicle dealer after a motor vehicle is sold: (a) A vehicle alarm system; (b) a window etch product; (c) a body part marking product; (d) a steering lock; (e) a pedal or ignition lock; or (f) a fuel or ignition kill switch.
     (25) "Surface protection product" means any of the following products installed by the seller after a motor vehicle is sold: (a) Undercoating; (b) rustproofing; (c) chemical or film paint sealant or protectant; or (d) chemical sealant or stain inhibitor for carpet and fabric.
     (26) "Contract cancellation option agreement" means an agreement that meets the requirements of section 7 of this act.
     (27) "Cash price" means the amount for which the vehicle dealer would sell and transfer to the buyer unqualified title to the motor vehicle, if the motor vehicle were sold for cash at the seller's place of business on the date the contract is executed, including taxes to the extent imposed on the cash sale and the cash price of accessories or services related to the sale including, but not limited to, delivery, installation, alterations, modifications, improvements, document preparation fees, a service contract, a vehicle contract cancellation option agreement, and payment of a prior credit or lease balance remaining on the motor vehicle being traded in.
     (28) "Down payment" means the payment that the buyer pays or agrees to pay to the vehicle dealer in cash or property value or money's worth at or before delivery by the seller to the dealer of the motor vehicle described in the sale contract. "Down payment" includes the amount of any portion of the down payment, the payment of which is deferred until no later than the due date of the second otherwise scheduled payment, if the amount of the deferred down payment is not subject to a finance charge. "Down payment" does not include any administrative finance charge charged, received, or collected by the seller as provided in this chapter.

NEW SECTION.  Sec. 3   A new section is added to chapter 46.70 RCW to read as follows:
     (1) A used vehicle dealer must make the disclosures required under this section in writing and in at least twelve-point font.
     (2) Before the execution of a sales contract for a used vehicle, the used vehicle dealer shall provide to the buyer, and obtain the buyer's signature on, a separate written disclosure that sets forth the following information:
     (a) A description and price of each item sold if the contract includes a charge for the item, including:
     (i) A service contract;
     (ii) An insurance product;
     (iii) A debt cancellation agreement;
     (iv) A theft deterrent device;
     (v) A surface protection product; and
     (vi) A contract cancellation option agreement.
     (b) The sum of all charges disclosed under (a) of this subsection must be labeled "Total of After Market Items."
     (c) If the dealer has arranged financing for the buyer or is providing a line of credit for the buyer, or if the buyer is purchasing the vehicle through a retail installment contract, the dealer must also disclose:
     (i) The amount that would be calculated under the contract as the regular installment payment if charges for the items disclosed under (a) of this subsection are not included in the contract. The amount disclosed must be labeled "Installment Payment EXCLUDING Listed Items";
     (ii) The amount that would be calculated under the contract as the regular installment payment if charges for the items disclosed under (a) of this subsection are included in the contract. The amount disclosed must be labeled "Installment Payment INCLUDING Listed Items"; and
     (iii) A notice that the buyer does not have to accept the dealer's offer to finance the sale of the vehicle.
     (3) Any used vehicle transaction that does not meet the requirements of this section is voidable at any time by the buyer.

NEW SECTION.  Sec. 4   A new section is added to chapter 46.70 RCW to read as follows:
     (1) Any document, including sales contracts, retail installment contracts, documents related to financing a used vehicle transaction, and any disclosures required by state or federal law, provided to a buyer from a used vehicle dealer must be translated into the language in which the deal was actually negotiated.
     (2) Any used vehicle transaction that does not meet the requirements of this section is voidable at any time by the buyer.

NEW SECTION.  Sec. 5   A new section is added to chapter 46.70 RCW to read as follows:
     (1) A used vehicle dealer shall not state or imply that the financing the dealer is offering the buyer is the best loan that the buyer qualifies for.
     (2) If a used vehicle dealer arranges financing for the buyer and receives any compensation, points, or reimbursement from the lender, the dealer must itemize and disclose this compensation to the buyer.
     (3) Any used vehicle transaction that does not meet the requirements of this section is voidable at any time by the buyer.

NEW SECTION.  Sec. 6   A new section is added to chapter 46.70 RCW to read as follows:
     (1) The used vehicle purchase contract must contain a notice in at least twelve-point, boldface type immediately above the contract signature line that reads as follows:

     "THERE IS NO COOLING-OFF PERIOD UNLESS YOU OBTAIN A CONTRACT CANCELLATION OPTION. Washington law does not provide for a "cooling-off" or other cancellation period for vehicle sales. Therefore, you cannot cancel this contract later simply because you change your mind, decide the vehicle costs too much, or wish you had acquired a different vehicle. After you sign below, you may only cancel this contract with the agreement of the seller or for legal cause, such as fraud. However, Washington law does require a seller to offer a 3-day contract cancellation option on used vehicles with a purchase price of less than $40,000, subject to certain statutory conditions. See the vehicle contract cancellation option agreement for details."

     (2) Any used vehicle transaction that does not meet the requirements of this section is voidable at any time by the buyer.

NEW SECTION.  Sec. 7   A new section is added to chapter 46.70 RCW to read as follows:
     (1) A vehicle dealer shall not sell a used vehicle without offering the buyer a contract cancellation option agreement that allows the buyer to return the vehicle without cause. This section does not apply to a used vehicle having a purchase price of forty thousand dollars or more.
     (2) The purchase price for the contract cancellation option agreement shall not exceed:
     (a) Seventy-five dollars for a vehicle with a cash price of five thousand dollars or less;
     (b) One hundred fifty dollars for a vehicle with a cash price of more than five thousand dollars but not more than ten thousand dollars;
     (c) Two hundred fifty dollars for a vehicle with a cash price of more than ten thousand dollars but not more than thirty thousand dollars; or
     (d) One percent of the purchase price for a vehicle with a cash price of more than thirty thousand dollars but not more than forty thousand dollars.
     (3) To comply with this section, a contract cancellation option agreement must be contained in a document that is separate from the sale contract or other vehicle purchase agreement and must contain, at a minimum:
     (a) The name of the seller and the buyer;
     (b) A description and the vehicle identification number of the vehicle purchased;
     (c) A statement specifying the time within which the buyer must exercise the right to cancel the purchase under the contract cancellation option agreement and return the vehicle to the dealer. The dealer shall not specify a time that is earlier than the dealer's close of business on the third day following the day on which the vehicle was originally delivered to the buyer by the dealer;
     (d) A statement that clearly and conspicuously specifies the dollar amount of any restocking fee that the buyer must pay to the dealer to exercise the right to cancel the purchase under the contract cancellation option agreement. The restocking fee shall not exceed: One hundred seventy-five dollars if the vehicle's cash price is five thousand dollars or less; three hundred fifty dollars if the vehicle's cash price is more than five thousand dollars but less than ten thousand dollars; and five hundred dollars if the vehicle's cash price is ten thousand dollars or more. The dealer shall apply toward the restocking fee the price paid by the buyer for the contract cancellation option agreement. The price for the purchase of the contract cancellation option agreement is not otherwise subject to setoff or refund;
     (e) A statement specifying the maximum number of miles that the vehicle may be driven after its original delivery by the dealer to the buyer to remain eligible for cancellation under the contract cancellation option agreement. A dealer shall not specify fewer than two hundred fifty miles in the contract cancellation option agreement;
     (f) A statement that the contract cancellation option agreement gives the buyer the right to cancel the purchase and obtain a full refund minus the purchase price for the contract cancellation option agreement, and that the right to cancel applies only if, within the time specified in the contract cancellation option agreement, the following are personally delivered to the selling dealer by the buyer:
     (i) A written notice exercising the right to cancel the purchase signed by the buyer;
     (ii) Any restocking fee specified in the contract cancellation option agreement minus the purchase price for the contract cancellation option agreement;
     (iii) The original contract cancellation option agreement, vehicle purchase contract, and related documents, if the seller provided these original documents to the buyer;
     (iv) All original vehicle title and registration documents, if the seller provided these original documents to the buyer; and
     (v) The vehicle:
     (A) Free of all liens and encumbrances, other than any lien or encumbrance created by or incident to the sales contract, any loan arranged by the dealer, or any loan obtained by the buyer from a third party;
     (B) In the same condition as when it was delivered by the dealer to the buyer, except for reasonable wear and tear and any defect or mechanical problem that manifests or becomes evident after delivery and that was not caused by the buyer; and
     (C) Which must not have been driven beyond the mileage limit specified in the contract cancellation option agreement.
     The agreement may also provide that the buyer will execute documents reasonably necessary to effectuate the cancellation and refund and as reasonably required to comply with applicable law; and
     (g) At the bottom of the contract cancellation option agreement, a statement that may be signed by the buyer to indicate the buyer's election to exercise the right to cancel the purchase under the terms of the contract cancellation option agreement, the last date and time by which the option to cancel may be exercised, and followed by a line for the buyer's signature. A particular form of the statement is not required, but the following statement is sufficient: "By signing below, I elect to exercise my right to cancel the purchase of the vehicle described in this agreement." The buyer's delivery of the contract cancellation option agreement to the dealer with the buyer's signature following this statement constitutes sufficient written notice exercising the right to cancel the purchase under (f) of this subsection.
     (4) The dealer shall provide the buyer with the statement required under subsection (3) of this section in duplicate to enable the buyer to return the signed cancellation notice and retain a copy of the contract cancellation option agreement.
     (5) No later than the second day following the day on which the buyer exercises the right to cancel the purchase in compliance with the contract cancellation option agreement, the dealer shall cancel the contract and provide the buyer with a full refund, including the appropriate portion of the sales tax.
     (6) If the buyer was not charged for the contract cancellation option agreement, the dealer shall return to the buyer, no later than the day following the day on which the buyer exercises the right to cancel the purchase, any motor vehicle that the buyer left with the seller as a down payment or trade-in. If the dealer has sold or otherwise transferred title to the motor vehicle that was left as a down payment or trade-in, the full refund described in subsection (3)(f) of this section must include the fair market value of the motor vehicle left as a down payment or trade-in, or its value as stated in the contract or purchase order, whichever is greater.
     (7) If the buyer was charged for the contract cancellation option agreement, the dealer shall retain any motor vehicle the buyer left with the dealer as a down payment or trade-in until the buyer exercises the right to cancel or the right to cancel expires. If the buyer exercises the right to cancel the purchase, the dealer shall return to the buyer, no later than the day following the day on which the buyer exercises the right to cancel the purchase, any motor vehicle that the buyer left with the seller as a down payment or trade-in. If the dealer has inadvertently sold or otherwise transferred title to the motor vehicle as the result of a bona fide error, notwithstanding reasonable procedures designed to avoid that error, the inadvertent sale or transfer of title is not a violation of this subsection, and the full refund described in subsection (3)(f) of this section must include the retail market value of the motor vehicle left as a down payment or trade-in, or its value as stated in the contract or purchase order, whichever is greater.
     (8) If the dealer received a portion of the purchase price by credit card, or other third-party payer on the buyer's account, the dealer may refund that portion of the purchase price to the credit card issuer or third-party payer for credit to the buyer's account.
     (9) This section does not affect or alter the legal rights, duties, obligations, or liabilities of the buyer, the dealer, or the dealer's agents or assigns, that would exist in the absence of a contract cancellation option agreement. The buyer is the owner of a vehicle when he or she takes delivery of a vehicle until the vehicle is returned to the dealer pursuant to a contract cancellation option agreement.
     (10) This section is not intended to affect the ability of a buyer to rescind the contract or revoke acceptance under any other law.
     (11) This section does not supersede or limit any disclosure obligation imposed by any other law.

NEW SECTION.  Sec. 8   A new section is added to chapter 46.70 RCW to read as follows:
     Sections 3, 5, and 6 of this act do not limit or supersede the disclosure requirements in chapter 31.04 or 63.14 RCW, or the federal truth in lending act (15 U.S.C. Sec. 1601 et seq.).

NEW SECTION.  Sec. 9   The code reviser shall alphabetize and renumber the definitions in RCW 46.70.011.