NEW JERSEY AS IS CAR SALE FREQUENTLY ASKED QUESTIONS

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INTRODUCTION

This article discusses New Jersey as is car sale frequently asked questions – questions about when a person buys a used car from a New Jersey used car dealer in “as is” condition.

NEW JERSEY AS IS CAR SALE FREQUENTLY ASKED QUESTION #1

WHAT IS AN AS IS CAR SALE?

Under the New Jersey Used Car Lemon Law, when a car buyer buys a car "as is" from a New Jersey used car dealer, it means that the used car is being sold by a dealer to a consumer without any warranty, either express or implied, and with the consumer being solely responsible for the cost of any repairs to that vehicle.

NEW JERSEY AS IS CAR SALE FREQUENTLY ASKED QUESTION #2

CAN A USED CAR DEALER USE AN AS IS DISCLAIMER TO PROTECT THE DEALER FROM BEING SUED FOR HIDDEN PROBLEMS OR ISSUES WITH A VEHICLE?

As explained below, New Jersey laws and regulations prevent a used car dealer from using an as is disclaimer to protect the dealer from facing liability for hiding a vehicle’s predelivery problems or for selling a vehicle without disclosing certain information about the vehicle. An as is disclaimer should not defeat all claims that a consumer might have if those claims are based on the dealer’s violation of New Jersey laws and regulations covering used car advertising and sales and covering the sale of goods or services to consumers under the New Jersey Consumer Fraud Act.

NEW JERSEY AS IS CAR SALE FREQUENTLY ASKED QUESTION #3

CAN A USED CAR DEALER SELL A CAR AS IS?

Under the New Jersey Used Car Lemon Law, a New Jersey used car dealer can sell a car as is if they meet certain requirements. The used car dealer must provide a clear written explanation, prior to sale, of what is meant by the term "as is". A consumer, as a result of a price negotiation for the purchase of a used motor vehicle with over 60,000 miles, may elect to waive the dealer's obligation to provide a warranty on the used car. The waiver shall be in writing and separately stated in the agreement of retail sale or in an attachment thereto and separately signed by the consumer. The waiver shall state the dealer's obligation to provide a warranty on used motor vehicles offered for sale, as set forth in the New Jersey Used Car Lemon Law. The waiver shall indicate that the consumer, having negotiated the purchase price of the used motor vehicle and obtained a price adjustment, is electing to waive the dealer's obligation to provide a warranty on the used motor vehicle and is buying the used motor vehicle "as is."

NEW JERSEY AS IS CAR SALE FREQUENTLY ASKED QUESTION #4

WHEN CAN’T A USED CAR DEALER SELL A CAR AS IS?

Under the New Jersey Used Car Lemon Law, for certain cars, a used car dealer must give the buyer of the car a warranty. To qualify for a mandatory New Jersey used car warranty, the vehicle and sale must meet the following requirements:

  • sold by a person selling or offering for sale the car, truck or SUV selling or offering for sale 3 or more used vehicles in the previous 12 month period or a lessor who is a dealer and who sells or offers for sale a used passenger motor vehicle, subject to a motor vehicle lease agreement which was in effect for more than 90 days, to a consumer who is not the lessee, or a family member or employee of the lessee upon the termination of the lease agreement.
  • not purchased for the purpose of resale.
  • the subject of a “sale” (the transfer of title of a used vehicle from the owner-seller to the purchaser-consumer) and not one where the owner-seller obtained title to or was granted the right to sell a used vehicle by operation of law.
  • not sold by a public entity or unit of the government.
  • the type normally used for personal, family or household purposes
  • passenger motor vehicles and are not motorcycles, motor homes or off road vehicles.
  • transferred from the person who first acquired it from the manufacturer or dealer and so used as to become what is commonly known as “secondhand” within the ordinary meaning thereof.
  • purchased for over $3,000.
  • less than 7 model years old at time of sale.
  • never declared a total loss by an insurance company.
  • not equipped with an odometer that registered over 100,000 miles at time of sale.
  • not the subject of a written waiver of the buyer’s right to a warranty from the selling dealer (if the vehicle had over 60,000 miles). 

NEW JERSEY AS IS CAR SALE FREQUENTLY ASKED QUESTION #5

WHEN A USED CAR DEALER SELLS A CAR AS IS, WHAT DISCLOSURES ARE THEY REQUIRED TO MAKE?

Under the New Jersey Used Car Lemon Law and applicable New Jersey regulations, when a used car dealer legally sells a consumer a vehicle as is, the used car dealer must still make many disclosures to the consumer. If the used car dealer does any of the following acts, they are potentially liable for a New Jersey Consumer Fraud Act violation:

  • To misrepresent the mechanical condition of a used car.
  • To fail to disclose, prior to sale, any material defect in the mechanical condition of used car which is known to the dealer.
  • To represent that a used car, or any component thereof, is free from material defects in mechanical condition at the time of sale, unless the dealer has a reasonable basis for this representation at the time it is made.
  • The failure to disclose that the used car had been previously damaged and that substantial repair or body work has been performed on it when such prior repair or body work is known or should have been known by the advertiser; for the purposes of this subsection, "substantial repair or body work" shall mean repair or body work having a retail value of $ 1,000 or more.
  • To fail to disclose, prior to sale, the existence and terms of any written warranty, service contract or repair insurance currently in effect on a used car provided by a person other than the dealer, and subject to transfer to a consumer, if known to the dealer;
  • To misrepresent the terms of any written warranty, service contract or repair insurance currently in effect on a used car provided by a person other than the dealer, and subject to transfer to a consumer;
  • To fail to disclose, prior to sale, the existence and terms of any written warranty, service contract or repair insurance offered by the dealer in connection with the sale of a used car;
  • To misrepresent the terms of any warranty, service contract or repair insurance offered by the dealer in connection with the sale of a used car;
  • To represent, prior to sale, that a used car is sold with a warranty, service contract or repair insurance when the vehicle is sold without any warranty, service contract or repair insurance;
  • To fail to disclose, prior to sale, that a used car is sold without any warranty, service contract, or repair insurance;
  • To fail to provide a clear written explanation, prior to sale, of what is meant by the term "as is," if a used car is sold "as is"
  • To require a person in connection with a sale of a vehicle or other merchandise to require or request the consumer to sign any document as evidence or acknowledgment of the sales transaction, of the existence of the sales contract, or of the discharge by the person of any obligation to the consumer specified in or arising out of the transaction or contract, unless the dealer shall at the same time provide the consumer with a full and accurate copy of the document so presented for signature. However, this requirement doesn’t apply to orders placed through the mail by the consumer for merchandise.
  • To fail to display on or near the vehicle the Used Car Buyers Guide, if required by the Federal Trade Commission's Used Car Rule, 16 C.F.R. Part 455.2.

A New Jersey used car dealer’s failure to provide this information results in a violation of the New Jersey Consumer Fraud Act. These types of New Jersey Consumer Fraud violations are called per se or technical consumer fraud violations.

In addition to the above requirements, in any advertisement offering for sale a used car at an advertised price, the following information must be included:

  • The advertiser's business name and business address;
  • A statement that "price(s) include(s) all costs to be paid by a consumer, except for licensing costs, registration fees, and taxes". If the statement appears as a footnote, it must be set forth in at least 10 point type. Under the New Jersey Automotive Advertising regulations, "all costs to be paid by a consumer" means manufacturer-installed options, freight, transportation, shipping, dealer preparation, and any other costs to be borne by a consumer except licensing costs, registration fees, and taxes;
  • The year, make, model, and number of engine cylinders of the advertised used car;
  • Whether the transmission is automatic or manual; whether the brakes and steering mechanism are power or manual; and whether the vehicle has air conditioning, unless those items are standard equipment on the advertised used car. This provision shall not apply to advertisements for motorcycles;
  • The last eight digits of the vehicle identification number, preceded by the letters "VIN". This provision shall not apply to radio and television broadcasts, or to advertisements for motorcycles; and
  • A list of any dealer installed options on the advertised used car and the retail price of each, as determined by the dealer.
  • The actual odometer reading as of the date the advertisement is placed for publication; and
  • The nature of prior use unless previously and exclusively owned or leased by individuals for their personal use, when such prior use is known or should have been known by the advertiser.

A New Jersey used car dealer’s failure to provide this information results in a violation of the New Jersey Consumer Fraud Act. These types of New Jersey Consumer Fraud violations are called per se or technical consumer fraud violations.

  • A person transferring ownership of a motor vehicle shall give the transferee the following written disclosure:
    • Disclosure of the cumulative mileage registered on the odometer.
    • Disclosure that the actual mileage is unknown, if the transferor knows that the odometer reading is different from the number of miles the vehicle has actually traveled.
  • A person transferring ownership of a motor vehicle may not violate a regulation prescribed under this section or give a false statement to the transferee in making the disclosure required by such a regulation.
  • A person acquiring a motor vehicle for resale may not accept a written disclosure under this section unless it is complete.
  • Anyone who repairs or replaces an odometer and it no longer registers the same mileage as before its repair or replacement (if the mileage of a vehicle following its repair cannot remain the same), the person must adjust the odometer to the “0” mark and then place a disclosure sticker on the vehicle’s left door frame.
  • A person may not, with intent to defraud, remove or alter a notice attached to a motor vehicle as required by the Law.
  • Advertising, selling, using, installing or having installed in a motor vehicle a device that causes its odometer to register the wrong mileage.
  • Disconnecting, resetting, altering or having disconnected, reset or altered a motor vehicle’s odometer in order to change the actual mileage stated on the odometer.
  • Operating a motor vehicle if the operator knows that its odometer is disconnected or not operating if the action is taken with the intent to defraud.
  • Engaging in a conspiracy to violate the odometer repair and odometer disclosure sections of the Federal Odometer Law.

The Federal Odometer Law may require other mandatory disclosures.

NEW JERSEY AS IS CAR SALE FREQUENTLY ASKED QUESTION #6

IF THE DEALER SELLS A CAR AS IS BUT FAILS TO MAKE THE MANDATORY DISCLOSURES LISTED ABOVE, DOES THE CUSTOMER HAVE TO PROVE THAT THE DEALER ACTED WITH BAD INTENT?

For any of the mandatory disclosures listed above, if a dealer fails to make the disclosures to the customer when selling a car as is, proof of intent on the dealer’s part when they commit the misconduct isn’t necessary.

NEW JERSEY AS IS CAR SALE FREQUENTLY ASKED QUESTION #7

WHAT REMEDIES ARE AVAILABLE TO CONSUMER FRAUD VICTIMS?

The New Jersey Consumer Fraud Act is a powerful weapon against fraud in new and used vehicle sales and leasing because the Act provides strong remedies to consumers harmed by misconduct committed by car dealers. A violation of the New Jersey Consumer Fraud Act may allow the consumer to recover the following remedies against a dealer:

  • Treble damages for an ascertainable loss of money or property caused by the New Jersey Consumer Fraud Act violation.
  • Attorney’s fee award for prosecuting the claim.
  • Cancellation of fraudulent debts.
  • Refund of money lost due to the New Jersey Consumer Fraud Act violation.

NEW JERSEY AS IS CAR SALE FREQUENTLY ASKED QUESTION #8

CAN I ONLY SUE A CAR DEALERSHIP FOR CONSUMER FRAUD?

A consumer fraud claim can be brought against an individual person or his or her legal representative, a partnership, corporation, company, trust, business entity, association as well as their agent, employee, salesperson, partner, officer, director, member, stockholder, associate, trustee or beneficiary of a trust. This means that car dealers, their salespeople, their management and their owners all may be sued for consumer fraud. However, to be successful in a consumer fraud claim against an individual or business, a consumer must show that the individual or business actually committed conduct that violates the New Jersey Consumer Fraud Act.

NEW JERSEY AS IS CAR SALE FREQUENTLY ASKED QUESTION #9

WHAT IF THE MISCONDUCT COMMITTED BY THE USED CAR DEALER ISN’T A PER SE VIOLATION OF A LAW OR REGULATION?

New Jersey used car sale fraud can take many forms. Laws and regulations covering car sales and car warranties are not intended to point out each and every situation that might result in a court finding that a used car dealer committed fraud. The New Jersey Consumer Fraud Act is a powerful law that protects consumers from misconduct committed by used car dealers when they sell used cars. A used car dealer should not be allowed to use an as is disclaimer to protect themselves if the dealer takes affirmative acts that violate the New Jersey Consumer Fraud Act or if they omit information from their disclosures about a used vehicle. Many of us have heard the phrase: “let the buyer beware.” That statement allows little relief to a New Jersey consumer. That statement does not reflect current law in New Jersey. Here, we have a more ethical approach in business dealings with one another. Therefore, each of us may rely on representations made by another in a used car dealer transaction. This approach is reflected in the New Jersey Consumer Fraud Act. For example, any of the following affirmative acts committed by a used car dealer might support a New Jersey Consumer Fraud claim against the dealer:

  • “Unconscionable commercial practice” - an activity which is basically unfair or unjust which materially departs from standards of good faith, honesty in fact and fair dealing in the public marketplace. To be unconscionable, there must be factual dishonesty and a lack of fair dealing.
  • “Deception” - conduct or advertisement which is misleading to an average consumer to the extent that it is capable of, and likely to, mislead an average consumer. It does not matter that at a later time it could have been explained to a more knowledgeable and inquisitive consumer. It does not matter whether the conduct or advertisement actually have misled the customer. The fact that the dealer may have acted in good faith is irrelevant. It is the capacity to mislead that is important.
  • “Fraud” - a perversion of the truth, a misstatement or a falsehood communicated to another person creating the possibility that that other person will be cheated.
  • “False pretense” - an untruth knowingly expressed by a wrongdoer.
  • “False promise” - an untrue commitment or pledge, communicated to another person, to create the possibility that that other person will be misled.
  • “Misrepresentation” - an untrue statement made about a fact which is important or significant to the sale/advertisement, communicated to another person to create the possibility that other person will be misled. A “misrepresentation” is a statement made to deceive or mislead.

For any of the above affirmative acts, it is not necessary for liability under the New Jersey Consumer Fraud Act that a person actually be misled or deceived by another’s conduct. It is not necessary for the customer to show that the dealer intended to deceive. What is important is that the affirmative act must have had the potential to mislead or deceive when it was performed. The capacity to mislead is the prime ingredient of affirmative consumer fraud claims Proof of intent is not necessary an essential element for these affirmative acts.

A used car dealer may also be found liable for violating the New Jersey Consumer Fraud Act if the dealer knowingly concealed, hid/suppressed, kept something from being known/omitted, or left out or did not mention an important or significant fact purposely or with the intent that others would rely on that concealment/suppression/omission in connection with the sale/advertisement of any merchandise. For these acts of omission, a person acts “knowingly” if he/she is aware that his/her conduct is of a nature that it is practically certain that his/her conduct will cause a particular result. He/She acts with knowledge, consciously, intelligently, willfully or intentionally. To “conceal” is to hide, secrete, or withhold something from the knowledge of others or to hide from observation, cover or keep from sight or prevent discovery of. “Concealment” is a withholding of something which one is bound or has a duty to reveal so that the one entitled to be informed will remain in ignorance. To “suppress” is to put a stop to a thing actually existing, to prohibit or put down, or to prevent, subdue, or end by force. “Suppression” is the conscious effort to control or conceal unacceptable impulses, thought, feelings or acts. A person acts “purposely” if it is his/her conscious object to engage in conduct that of a certain nature or cause a particular result and he/she is aware of hopes or believes that the attendant circumstances exist. “Intent” is a design, resolve, or determination with which a person acts. It refers only to the state of mind existing when an act is done or omitted. It is not necessary that any person be, in fact, misled or deceived by another’s conduct. What is important is that the dealer must have meant to mislead or deceive when he/she/it/they acted. The fact that the dealer acted knowingly or with intent is an essential element of acts of omission and knowledge or intent must be shown. Where the alleged consumer fraud can be viewed as either an omission or an affirmative act, the dealer is liable for the conduct as an omission only where defendant committed a consumer fraud by omission and intent is shown.

New and used vehicle sales and leasing in the State often involve fraud committed by the car dealer. The customers of car dealers often purchase or lease expensive vehicles without adequate information about their rights or the dealer’s responsibilities. The New Jersey Consumer Fraud Act applies to new and used vehicle sales, requiring dealers to provide customers from specific disclosures and making it illegal for dealers to engage in certain conduct.

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Call Perlman DePetris Consumer Law for a no obligation phone consultation. Handling your case wrong from the beginning may only cost you more money and time in the end!! Try to do it right the first time by seeking legal advice from a competent lawyer! You might be entitled to be represented on a contingent basis, meaning that the attorney won’t get paid unless the case is successful and that the lawyer gets paid from your recovery instead of requiring you to pay attorney’s fees out of your own pocket up front. Other cases can be handled for a relatively small one-time payment of an up-front fixed attorney’s fee and with a contingent fee at the end of the case. Filing a claim yourself is very risky, since businesses often hire experienced defense attorneys to fight your case. Also, if you try to negotiate a settlement yourself, you may get less money than you deserve. You should always speak with an attorney before coming to any conclusions about your claim. Do not try to interpret the law by reading a website! Even if the facts of your case don’t fit Consumer Law requirements, you may be entitled to sue a used car dealer for a breach of your warranties under other state and federal laws or for a breach of contract or for some other type of claim and you may recover money damages, attorney’s fees and court costs.

DISCLAIMER

While this page gives some general background information, there is the danger that relying on this information alone could lead you to lose your claim. Laws and regulations frequently change and the law may have changed since the posting of this webpage. Factual differences between your case and cases described on this webpage can affect your chance of success. Don’t attempt to rely on the internet as the only source of information for your claim! Instead, get competent legal advice from a New Jersey licensed attorney. Call Perlman DePetris Consumer Law for a no obligation phone consultation.