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NEW JERSEY REGISTER
VOLUME 40, ISSUE 9
ISSUE DATE: MAY 5, 2008
RULE PROPOSALS

LAW AND PUBLIC SAFETY
DIVISION OF CONSUMER AFFAIRS
Office of the Director

 

Proposed New Rules: N.J.A.C. 13:45A-26B.3 and 26B.4
Proposed Amendments: N.J.A.C. 13:45A-26B.1 and 26B.2

Automotive Sales Practices

Authorized By: Lawrence DeMarzo, Acting Director, Division of Consumer Affairs.
Authority: N.J.S.A. 56:8-1 et seq.
Calendar Reference: See Summary below for explanation of exemption to calendar requirement.

Proposal Number: PRN 2008-138.
Submit written comments by July 4, 2008 to:

   Lawrence DeMarzo, Acting Director
   State of New Jersey
   Division of Consumer Affairs
   Office of the Director
   P.O. Box 45027
   Newark, New Jersey 07101

The agency proposal follows:

Summary

The Division of Consumer Affairs (Division) proposes new rules and amendments to the existing rules dealing with automotive sales practices in Subchapter 26B, concerning the manner in which automotive dealers are to set forth pre-delivery and documentary service fees on the sales document for a motor vehicle. The Division is proposing to delete a requirement that sales documents contain a statement indicating that consumers have the right to a written itemized price for every pre-delivery service, which is performed. The amendments do not change the existing requirement that the sales document include an itemization of the price for every pre-delivery service performed.

The proposed amendment to the definitions at N.J.A.C. 13:45A-26B.1 adds definitions for "documentary service" and "pre-delivery service." "Documentary service" is defined as, but not limited to, the preparation and processing of documents in connection with the transfer of license plates, registration, or title, and the preparation and processing of other documents relating to the sale of a motor vehicle. For purposes of this subchapter concerning automotive sales practices, "Pre-delivery service" is defined as, but not limited to, items which are often described or labeled as dealer preparation, vehicle preparation, pre-delivery handling and delivery, or any other service of similar import.

The proposed amendment to N.J.A.C. 13:45A-26B.2 focuses the rule on the manner in which pre-delivery service fees are to be addressed on the sales document for a motor vehicle. The existing rule requires automotive dealers to itemize and price on the sales document each pre-delivery service being performed. The existing rule also requires dealers to include a statement on the sales document for new motor vehicles that indicates that a buyer has a right to a written itemized price for each pre-delivery service performed. The amendments proposed to the rule would delete the requirement that dealers include this statement. The rule is proposed for amendment to require that the itemization of each pre-delivery service be in at least 10-point type.

The rule continues to prohibit the dealer from accepting, charging, or obtaining monies or anything of value from the consumer for any pre-delivery services for which the dealer may receive reimbursement from another person or entity.

The Division proposes to delete the portion of the rule dealing with documentary service fees as it is being addressed in a separate new rule proposed at N.J.A.C. 13:45A-26B.3.

Proposed new rule N.J.A.C. 13:45A-26B.3 addresses documentary service fees, which had previously been stated in N.J.A.C. 13:45A-26B.2(a)2. The proposed new rule requires the automotive dealership to itemize in writing, in at least 10-point type, each documentary service being performed along with the specific fee being charged for each documentary service on the sales document.

Proposed new rule N.J.A.C. 13:45A-26B.4 sets forth a provision that was deleted from N.J.A.C. 13:45A-26B.2, which stated that violators of Subchapter 26B have violated the Consumer Fraud Act (Act), N.J.S.A. 56:8-1 et seq., and that prosecution of a violator of this rule does not preclude other prosecutions under the Act.

As the Division has provided a 60-day comment period on this notice of proposal, this notice is exempted from the rulemaking calendar requirement pursuant to N.J.A.C. 1:30-3.3.

Social Impact

The proposed new rules and proposed amendments are expected to be beneficial to automotive dealers as they will no longer be required to include certain statements in sales documents making the sales document shorter. The proposed new rules and proposed amendments are expected to be beneficial to consumers, as they will simplify the sales documents.

Economic Impact

The proposed new rules and proposed amendments may provide a slight economic benefit for automotive dealers, as they will no longer be required to include certain statements in sales documents making the sales document shorter and slightly less costly to produce.

Federal Standard Statement

A Federal standards analysis is not required because the new rules and amendments are not proposed under the authority of or in order to implement, comply with or participate in any program under Federal law. This notice of proposal is undertaken pursuant to the authority of New Jersey law, N.J.S.A. 56:8-1 et seq., which does not incorporate or refer to Federal law, standards or requirements.

Jobs Impact

The Division does not believe that the proposed new rules or amendments will either increase or decrease the number of jobs in New Jersey.

Agriculture Industry Impact

The Division does not expect the proposed amendments or new rules to have any impact on the agriculture industry in the State.

Regulatory Flexibility Analysis

The Regulatory Flexibility Act (RFA), N.J.S.A. 52:14B-16 et seq., requires the Division to estimate the number of small businesses to which the proposed amendments and new rules will apply. If, for purposes of the RFA, dealers of motor vehicles are "small businesses" within the meaning of the statute, the following analysis applies.

The RFA requires the Division to set forth the reporting, recordkeeping and other compliance requirements of the proposal, including the kinds of professional services likely to be needed to comply with its requirements. The RFA further requires the Division to estimate the initial and annual compliance costs of the proposed amendments and new rules and set forth whether the rules establish differing compliance requirements for small businesses.

The proposed new rules and amendments impose no reporting or recordkeeping requirements.

The proposed amendments and new rules do impose compliance requirements on automotive dealers. The proposed amendments to N.J.A.C. 13:45A-26B.2 and new rule at N.J.A.C. 13:45A-26B.3 require automotive dealers who charge pre-delivery and/or documentary service fees to itemize the actual service being performed and set forth in writing on the sales document the fee for each specific service that was performed.

Compliance costs will vary among the differing automotive dealers as they may need to develop a new sales document to address the itemizing of the service and fees but once a new sales document form has been developed there should be no additional costs to dealerships. Automotive dealers will not need any professional services to comply with the proposed amendments and new rules.

In order to ensure that the protections afforded by the proposal benefit all consumers, no differing compliance requirements have been established for small businesses and the rules will be applied uniformly to all dealers of motor vehicles.

Smart Growth Impact

The proposed amendments and new rules will have no impact on the achievement of smart growth and implementation of the State Development and Redevelopment Plan.

Full text of the proposal follows (additions indicated in boldface thus; deletions indicated in brackets [thus]):

SUBCHAPTER 26B.  AUTOMOTIVE SALES PRACTICES

13:45A-26B.1  Definitions

The following words and terms, when used in this subchapter, shall have the following meanings unless the context indicates otherwise.

. . .

"Documentary service" means, but is not limited to, the preparation and processing of documents in connection with the transfer of license plates, registration, or title, and the preparation and processing of other documents relating to the sale or lease of a motor vehicle.

"Documentary service fee" means any monies or other thing of value, which an automotive dealer accepts from a consumer in exchange for [the performance of certain] a documentary service[s which include, but are not limited to, the preparation and processing of documents in connection with the transfer of license plates, registration, or title, and the preparation and processing of other documents relating to the sale of a motor vehicle to said consumer;].

"Pre-delivery service" means, but is not limited to, items that are often described or labeled as dealer preparation, vehicle preparation, pre-delivery handling and delivery, or any other service of similar import.

"Pre-delivery service fee" means any monies or other thing of value, which an automotive dealer accepts from a consumer in exchange for the performance of a pre-delivery service[s] upon a motor vehicle[, and includes, but is not limited to, items which are often described or labeled as dealer preparation, vehicle preparation, predelivery service, handling and delivery, or any other term of similar import;].

. . .

13:45A-26B.2  [Unlawful practices] Pre-delivery service fees

[(a) Without limiting any other practices which may be unlawful under the Consumer Fraud Act, N.J.S.A. 56:8-1 et seq., the following practices involving the sale of motor vehicles by automotive dealers shall be unlawful thereunder.

1. With respect to pre-delivery service fees:]

(a) In connection with the sale of a motor vehicle, which includes the assessment of a pre-delivery service fee, automotive dealers shall not:

[i.] 1. [Accepting, charging, or obtaining] Accept, charge, or obtain from a consumer monies, or any other thing of value, in exchange for the performance of any pre-delivery service for which the automotive dealer receives payment, credit, or other value from any person or entity other than a retail purchaser of the motor vehicle; or

[ii.] 2. [Accepting, charging, or obtaining] Accept, charge, or obtain from a consumer monies, or any other thing of value, in exchange for the performance of any pre-delivery service without first itemizing the actual pre-delivery service, which is being performed and setting forth in writing, in at least 10-point type, on the sales document the price for each specific pre-delivery service[;].

[iii. Except in connection with the sale of used motor vehicles, failing to conspicuously place upon the front of the sales document which contains a pre-delivery service fee, in ten-point bold face type, the following statement:

"You have a right to a written itemized price for each specific pre-delivery service which is to be performed. The automotive dealer may not charge for pre-delivery services for which the automotive dealer is reimbursed by the manufacturer."

2. With respect to documentary service fees:

i. Accepting, charging, or obtaining from a consumer monies, or any other thing of value, in exchange for the performance of any documentary service without first itemizing the actual documentary service which is being performed and setting forth in writing on the sale document the price for each specific documentary service; or

ii. Representing to a consumer that a governmental entity requires the automotive dealer to perform any documentary service;

iii. Failing to conspicuously place upon the front of the sales document which contains a documentary service fee, in ten-point bold face type, the following:

"You have a right to a written itemized price for each specific documentary service which is to be performed."]

13:45A-26B.3  Documentary service fee

(a) In connection with the sale of a motor vehicle, which includes the assessment of a documentary service fee, automotive dealers shall not:

1. Represent to a consumer that a governmental entity requires the automotive dealer to perform any documentary service: or

2. Accept, charge, or obtain from a consumer monies, or any other thing of value, in exchange for the performance of any documentary service without first itemizing the actual documentary service, which is being performed and setting forth in writing, in at least 10-point type, on the sale document the price for each specific documentary service.

13:45A-26B.4  Violations

Without limiting the prosecution of any other practices, which may be unlawful under the Consumer Fraud Act, N.J.S.A. 56:8-1 et seq., any violations of this subchapter shall comprise a violation of the Consumer Fraud Act.



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