Bill Stems From Incident with Upper Township Car Dealer who Kept Trade-In Money
(TRENTON) – Legislation Assemblyman Matthew Milam sponsored to protect customers from unscrupulous motor vehicle dealers who fail to pay the remaining loan on a trade-in vehicle was released Thursday by an Assembly panel.
Milam said the bill stems from an incident in Upper Township in which a car dealer kept the money from trade-ins, never transferred the title and left families strapped with loans from their trade-in vehicle, which they no longer possessed.
“This is common sense consumer protection,” Milam said. “When people trade-in their vehicle, they certainly don’t expect to continue to be strapped with the loan on it. People shouldn’t see their credit and financial future destroyed by sloppy or dishonest business practices.”
The bill (A-2465) would require all new and used motor vehicle dealers to pay by certified check the remaining loan on a customer’s trade-in within 21 days of accepting that trade-in. The dealer would also have to make a copy of the certified check used to pay the customer’s existing loan available to the consumer, upon request.
Motor vehicle dealers who violate the bill would be guilty of a fourth-degree crime punishable by up to 18 months imprisonment and liable for a penalty of not more than $10,000 for the first offense and not more than $20,000 for the second and each subsequent offense. A dealer found in violation would also face suspension or revocation of their license.
“Three weeks is more than enough for car dealers to do what they’re supposed to do as part of a good faith transaction,” Milam said. “It’s always unfortunate when we have to legislate matters like this, but this is a step forward for both consumers and honest car dealers.”
The bill was released unanimously by the Assembly Consumer Affairs Committee. It now goes to the Assembly Speaker, who decides if and when to post it for a floor vote.
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