Legislature finds that the purchase of a new motor vehicle is a
major, high cost consumer transaction and the inability to
correct defects in these vehicles creates a major hardship and
an unacceptable economic burden on the consumer. It is the
intent of this act to require the manufacturer of a new motor
vehicle to correct defects originally covered under the
manufacturer's warranty which are identified and reported within
a specified period. It is the further intent of this act to
provide procedures to expeditiously resolve disputes between a
consumer and a manufacturer when defects in a new motor vehicle
are not corrected within a reasonable time, and to provide to
award specific remedies where the uncorrected defect
substantially impairs the use, value, or safety of the new motor
used in this act:
means a buyer or lessee, other than for purposes of resale or
sublease, of a motor vehicle; a person to whom a motor vehicle
is transferred during the duration of a warranty applicable to
the motor vehicle; or any other person entitled by the terms of
the warranty to enforce the obligations of the warranty.
means a person who is actively engaged in the business of
buying, selling or exchanging motor vehicles at retail and who
has an established place of business.
means the Director of the Division of Consumer Affairs in the
Department of Law and Public Safety, or his designee.
means the Division of Consumer Affairs in the Department of Law
and Public Safety.
agreement" means a contract or other written agreement in
the form of a lease for the use of a motor vehicle by a person
for a period of time exceeding 60 days, whether or not the
lessee has the option to purchase or otherwise become the owner
of the motor vehicle at the expiration of the lease.
means a person who leases a motor vehicle pursuant to a lease
means a person who holds title to a motor vehicle leased to a
lessee under a lease agreement or who holds the lessor's rights
under such an agreement.
means a security interest in a motor vehicle.
holder" means a person with a security interest in a motor
vehicle pursuant to a lien.
means a person engaged in the business of manufacturing,
assembling or distributing motor vehicles, who will, under
normal business conditions during the year, manufacture,
assemble or distribute to dealers at least 10 new motor
informal dispute settlement procedure" means an arbitration
process or procedure by which the manufacturer attempts to
resolve disputes with consumers regarding motor vehicle
nonconformities and repairs that arise during the vehicle's
warranty" or "warranty" means any warranty,
whether express or implied of the manufacturer, of a new motor
vehicle of its condition and fitness for use, including any
terms or conditions precedent to the enforcement of obligations
under the warranty.
vehicle" means a passenger automobile or motorcycle as
defined in R.S.39:1-1 which is purchased or leased in the State
of New Jersey or which is registered by the Division of Motor
Vehicles in the Department of Law and Public Safety, except the
living facilities of motor homes.
means a defect or condition which substantially impairs the use,
value or safety of a motor vehicle.
allowance for vehicle use" means the mileage at the time
the consumer first presents the motor vehicle to the dealer or
manufacturer for correction of a nonconformity times the
purchase price, or the lease price if applicable, of the
vehicle, divided by one hundred thousand miles.
Report of nonconformity; repairs.
a consumer reports a nonconformity in a motor vehicle to the
manufacturer or its dealer during the first 18,000 miles of
operation or during the period of two years following the date
of original delivery to a consumer, whichever is earlier, the
manufacturer shall make, or arrange with its dealer to make,
within a reasonable time, all repairs necessary to correct the
nonconformity. Such repairs if made after the first 12,000 miles
of operation or after the period of one year following the date
of original delivery to the consumer, whichever is earlier,
shall be paid for by the consumer, unless otherwise covered by a
manufacturer's warranty, and shall be recoverable as a cost
under section 14 of this act.
If, during the period specified in section 3 of this act, the
manufacturer or its dealer is unable to repair or correct a
nonconformity within a reasonable time, the manufacturer shall
accept return of the motor vehicle from the consumer. The
manufacturer shall provide the consumer with a full refund of
the purchase price of the original motor vehicle including any
stated credit or allowance for the consumer's used motor
vehicle, the cost of any options or other modifications
arranged, installed, or made by the manufacturer or its dealer
within 30 days after the date of original delivery, and any
other charges or fees including, but not limited to, sales tax,
license and registration fees, finance charges, reimbursement
for towing and reimbursement for actual expenses incurred by the
consumer for the rental of a motor vehicle equivalent to the
consumer's motor vehicle and limited to the period during which
the consumer's motor vehicle was out of service due to a
nonconformity, less a reasonable allowance for vehicle use.
Nothing herein shall be construed to preclude a manufacturer
from making an offer to replace the vehicle in lieu of a refund;
except that the consumer may, in any case, reject a
manufacturer's offer of replacement and demand a refund. Refunds
shall be made to the consumer and lien holder, if any, as their
interests appear on the records of ownership maintained by the
Director of the Division of Motor Vehicles. In the event that
the consumer accepts an offer to replace the motor vehicle in
lieu of a refund, it shall be the manufacturer's responsibility
to insure that any lien on the returned motor vehicle is
transferred to the replacement vehicle.
A consumer who leases a new motor vehicle shall have the same
remedies against a manufacturer under this section as a consumer
who purchases a new motor vehicle. If it is determined that the
lessee is entitled to a refund pursuant to subsection a. of this
section, the consumer shall return the leased vehicle to the
lessor or manufacturer and the consumer's lease agreement with
the motor vehicle lessor shall be terminated and no penalty for
early termination shall be assessed. The manufacturer shall
provide the consumer with a full refund of the amount actually
paid by the consumer under the lease agreement, including any
additional charges as set forth in subsection a. of this section
if actually paid by the consumer, less a reasonable allowance
for vehicle use. The manufacturer shall provide the motor
vehicle lessor with a full refund of the vehicle's original
purchase price plus any un-recovered interest expense, less the
amount actually paid by the consumer under the agreement.
Refunds shall be made to the lessor and lien holder, if any, as
their interests appear on the records of ownership maintained by
the Director of the Division of Motor Vehicles.
Presumption of inability to correct nonconformity; written
It is presumed that a manufacturer or its dealer is unable to
repair or correct a nonconformity within a reasonable time if,
within the first 18,000 miles of operation or during the period
of two years following the date of original delivery of the
motor vehicle to a consumer, whichever is the earlier date:
Substantially the same nonconformity has been subject to repair
three or more times by the manufacturer or its dealer and the
nonconformity continues to exist; or
The motor vehicle is out of service by reason of repair for one
or more nonconformities for a cumulative total of 20 or more
calendar days since the original delivery of the motor vehicle
and a nonconformity continues to exist.
The presumption contained in subsection a. of this section shall
apply against a manufacturer only if the manufacturer has
received written notification, by or on behalf of the consumer,
by certified mail return receipt requested, of a potential claim
pursuant to the provisions of this act and has had one
opportunity to repair or correct the defect or condition within
10 calendar days following receipt of the notification.
Notification by the consumer shall take place any time after the
motor vehicle has had substantially the same nonconformity
subject to repair two or more times or has been out of service
by reason of repair for a cumulative total of 20 or more
The two-year term and the 20-day period specified in this
section shall be extended by any period of time during which
repair services are not available to the consumer because of a
war, invasion or strike, or a fire, flood, or other natural
Statements to consumers.
At the time of purchase in the State of New Jersey, the
manufacturer through its dealer, or at the time of lease in the
State of New Jersey, the lessor, shall provide directly to the
consumer the following written statement on a separate piece of
paper, in 10-point bold-face type:
IF THIS VEHICLE IS DEFECTIVE, YOU MAY BE ENTITLED UNDER NEW
JERSEY LAW TO A REFUND OF THE PURCHASE PRICE OR YOUR LEASE
PAYMENTS. FOR COMPLETE INFORMATION REGARDING YOUR RIGHTS AND
REMEDIES UNDER THE RELEVANT LAW, CONTACT THE NEW JERSEY
DEPARTMENT OF LAW AND PUBLIC SAFETY, DIVISION OF CONSUMER
Each time a consumer's motor vehicle is returned from being
examined or repaired during the period specified in section 3 of
this act, the manufacturer through its dealer shall provide to
the consumer an itemized, legible statement of repair which
indicates any diagnosis made and all work performed on the
vehicle and provides information including, but not limited to,
the following: a general description of the problem reported by
the consumer or an identification of the problem reported by the
consumer or an identification of the defect or condition; the
amount charged for parts and the amount charged for labor, if
paid for by the consumer; the date and the odometer reading when
the vehicle was submitted for repair; and the date and odometer
reading when the vehicle was made available to the consumer.
Failure to comply with the provisions of this section
constitutes an unlawful practice pursuant to section 2 of P.L.
1960, c. 39 (C. 56:8-2).
Sale, leasing of returned motor vehicle.
If a motor vehicle is returned to the manufacturer under the
provisions of this act or a similar statute of another state or
as the result of a legal action or an informal dispute
settlement procedure, it shall not be resold or re-leased in New
The manufacturer provides to the dealer or lessor and the dealer
or lessor provides to the consumer the following written
statement on a separate piece of paper, in 10-point bold-face
THIS VEHICLE WAS RETURNED TO THE MANUFACTURER BECAUSE IT DID NOT
CONFORM TO THE MANUFACTURER'S WARRANTY AND THE NONCONFORMITY WAS
NOT CORRECTED WITHIN A REASONABLE TIME AS PROVIDED BY LAW;"
The dealer or lessor obtains from the consumer a signed receipt
certifying, in a conspicuous and understandable manner, that the
written statement required under this subsection has been
provided. The director shall prescribe the form of the receipt.
The dealer or lessor may fulfill his obligation to obtain a
signed receipt under this paragraph by making such a notation,
in a conspicuous and understandable manner, on the vehicle buyer
order form accompanying the sale or lease of that vehicle; and
The dealer or lessor, in accordance with the provisions of
section 1 of P.L.1993, c.21 (C.39:10-9.3), notifies the Director
of the Division of Motor Vehicles in the Department of Law and
Public Safety of the sale or transfer of ownership of the motor
Nothing in this section shall be construed as imposing an
obligation on a dealer or lessor to determine whether a
manufacturer is in compliance with the terms of this section nor
shall it be construed as imposing liability on a dealer or
lessor for the failure of a manufacturer to comply with the
terms of this section.
Failure to comply with the provisions of this section
constitutes an unlawful practice pursuant to section 2 of
P.L.1960, c.39 (C.56:8-2).
Informal dispute settlement procedure.
If a manufacturer has established, or participates in, an
informal dispute settlement procedure pursuant to section 110 of
Pub. L. 93-637 (15 U.S.C. s.2310) and the rules promulgated
there under, or the requirements of this section, a consumer may
submit a dispute regarding motor vehicle nonconformities to the
dispute settlement body provided by that procedure but a
consumer shall not be required to first participate in the
informal dispute settlement procedure before participating in
the division's summary hearing procedure under this act.
If a consumer chooses to use a manufacturer's informal dispute
settlement procedure established pursuant to this section, the
findings and decisions of the dispute settlement body shall
state in writing whether the consumer is entitled to a refund
under the presumptions and criteria set out in this act and the
findings and decisions shall be admissible against the consumer
and the manufacturer in any legal action.
If the dispute settlement body determines that a consumer is
entitled to relief under this act, the consumer shall be
entitled to a refund as authorized by section 4 of this act.
In any informal dispute settlement procedure established
pursuant to this section:
Participating arbitrators shall be trained in arbitration and
familiar with the provisions of this act.
Documents shall not be submitted to any dispute settlement body
unless the documents have been provided to each of the parties
in the dispute at least seven days prior to commencement of the
dispute settlement hearing. The parties shall be given the
opportunity to comment on the documents in writing or with oral
No party shall participate in the informal dispute settlement
procedure unless all other parties are also present and given an
opportunity to be heard, or unless the other parties consent to
proceeding without their presence and participation.
A consumer shall be given an adequate opportunity to contest a
manufacturer's assertion that a nonconformity falls within
intended specifications for the vehicle by having the basis of
the manufacturer's claim appraised by a technical expert
selected and paid for by the consumer prior to the
manufacturer's informal dispute settlement procedure. If the
dispute settlement body rules in favor of the consumer, his
costs and reasonable attorney's fees shall also be awarded.
A dispute shall not be heard if there has been a recent attempt
by the manufacturer to repair a consumer's vehicle, but no
response has yet been received by the dispute settlement body
from the consumer as to whether the repairs were successfully
completed. This provision shall not prejudice a consumer's right
under this section.
manufacturer shall provide, and the dispute settlement body
shall consider, any relevant technical service bulletins which
have been issued by the manufacturer regarding motor vehicles of
the same make and model as the vehicle that is the subject of
Any manufacturer who establishes, or participates in, an
informal dispute settlement procedure, whether it meets the
requirements of this section or not, shall maintain, and forward
to the director at six month intervals, the following records:
The number of purchase price and lease price refunds requested,
the number awarded by the dispute settlement body, the amount of
each award and the number of awards satisfied in a timely
The number of awards in which additional repairs or a warranty
extension was the most prominent remedy, the amount or value of
each award, and the number of awards satisfied in a timely
The number and total dollar amount of awards in which some form
of reimbursement for expenses or compensation for losses was the
most prominent remedy, the amount or value of each award and the
number of awards satisfied in a timely manner; and
The average number of days from the date of a consumer's initial
request to use the manufacturer's informal dispute settlement
procedure until the date of the decision and the average number
of days from the date of the decision to the date on which
performance of the award was satisfied.
A consumer shall have the option of submitting any dispute
arising under section 4 of this act to the division for
resolution. The director may establish a filing fee, to be paid
by the consumer, fixed at a level not to exceed the cost for the
proper administration and enforcement of this act. This fee
shall be recoverable as a cost under section 14 of this act.
Upon application by the consumer and payment of any filing fee,
the manufacturer shall submit to the State hearing procedure.
The filing of the notice in subsection b. of section 5 of
P.L.1988, c.123 (C.56:12-33) shall be a prerequisite to the
filing of an application under this section.
The director shall review a consumer's application for dispute
resolution and accept eligible disputes for referral to the
Office of Administrative Law for a summary hearing to be
conducted in accordance with special rules adopted pursuant to
the "Administrative Procedure Act," P.L.1968, c.410
(C.52:14B-1 et seq.), by the Office of Administrative Law in
consultation with the director. Immediately upon acceptance of a
consumer's application for dispute resolution, the director
shall contact the parties and arrange for a hearing date with
the Clerk of the Office of Administrative Law. The hearing date
shall, to the greatest extent possible, be convenient to all
parties, but shall be no later than 20 days from the date the
consumer's application is accepted, unless a later date is
agreed upon by the consumer. The Office of Administrative Law
shall render a decision, in writing, to the director within 20
days of the conclusion of the summary hearing. The decision
shall provide a brief summary of the findings of fact,
appropriate remedies pursuant to this act, and a specific date
for completion of all awarded remedies. The director, upon a
review of the proposed decision submitted by the administrative
law judge, shall adopt, reject, or modify the decision no later
than 15 days after receipt of the decision. Unless the director
modifies or rejects the decision within the 15-day period, the
decision of the administrative law judge shall be deemed adopted
as the final decision of the director. If the manufacturer
unreasonably fails to comply with the decision within the
specified time period, the manufacturer shall be liable for
penalties in the amount of $5,000.00 for each day the
manufacturer unreasonably fails to comply, commencing on the day
after the specified date for completion of all awarded remedies.
The Office of Administrative Law is authorized to issue
subpoenas to compel the attendance of witnesses and the
production of documents, papers and records relevant to the
A manufacturer or consumer may appeal a final decision to the
Appellate Division of the Superior Court. An appeal by a
manufacturer shall not be heard unless the petition for the
appeal is accompanied by a bond in a principal sum equal to the
money award made by the administrative law judge plus $2,500.00
for anticipated attorney's fees and other costs, secured by cash
or its equivalent, payable to the consumer. The liability of the
surety of any bond filed pursuant to this section shall be
limited to the indemnification of the consumer in the action.
The bond shall not limit or impair any right of recovery
otherwise available pursuant to law, nor shall the amount of the
bond be relevant in determining the amount of recovery to which
the consumer shall be entitled. If a final decision resulting in
a refund to the consumer is upheld by the court, recovery by the
consumer shall include reimbursement for actual expenses
incurred by the consumer for the rental of a motor vehicle
equivalent to the consumer's motor vehicle and limited to the
period of time after which the consumer's motor vehicle was
offered to the manufacturer for return under this act, except in
those cases in which the manufacturer made a comparable vehicle
available to the consumer free of charge during that period. If
the court finds that the manufacturer had no reasonable basis
for its appeal or that the appeal was frivolous, the court shall
award treble damages to the consumer. Failure of the Office of
Administrative Law to render a written decision within 20 days
of the conclusion of the summary hearing as required by
subsection b. of this section shall not be a basis for appeal.
The Attorney General shall monitor the implementation and
effectiveness of this act and report to the Legislature after
three years of operation, at which time a recommendation shall
be made either to continue under the procedures set forth in
this act or to make such modifications as may be necessary to
effectuate the purposes of this act.
The Division of Consumer Affairs shall maintain an index of all
motor vehicle disputes by make and model. The division shall, at
six-month intervals, compile and maintain statistics indicating
the record of manufacturer compliance with any settlement
procedure decisions. The statistics shall be public record.
A manufacturer shall provide to the division all information on
private arbitration or private buy-back programs maintained or
instituted by the manufacturer. The information shall include
the type and number of vehicles to which these programs apply
and the reasons for establishing and maintaining the programs.
The manufacturer shall provide the division with updated
information at six month intervals.
consumer shall not be required to participate in a
manufacturer's informal dispute settlement procedure or the
division's summary hearing procedure before filing an action in
the Superior Court. However, a decision rendered in a proceeding
brought pursuant to the division's summary hearing procedure
shall be binding on the consumer and the manufacturer, subject
to the right of appeal as set forth in subsection d. of section
9 of this act, and shall preclude the institution of any other
action in the Superior Court under this act.
shall be an affirmative defense to a claim under this act that
the alleged nonconformity does not substantially impair the use,
value, or safety of the new motor vehicle or that the
nonconformity is the result of abuse, neglect, or unauthorized
modifications or alterations of the motor vehicle by anyone
other than the manufacturer or its dealer.
party to an action in the Superior Court of this State asserting
a claim, counterclaim or defense based upon violations of this
act shall mail a copy of the initial or responsive pleading
containing the claim, counterclaim or defense to the Attorney
General within 10 days after filing the pleading with the court.
Upon application to the court in which the matter is pending,
the Attorney General may intervene or appear in any status
appropriate to this matter.
Attorney, expert fees; costs.
any action by a consumer against a manufacturer brought in
Superior Court or in the division pursuant to the provisions of
this act, a prevailing consumer shall be awarded reasonable
attorney's fees, fees for expert witnesses and costs.
Use of funds.
fees, penalties and costs collected by the division pursuant to
this act shall be appropriated for purposes of offsetting costs
associated with the handling and resolution of consumer
Inherent design defect.
manufacturer shall certify to the division, within one year of
discovery, the existence of any inherent design defect common to
all motor vehicles of a particular model or make. Failure to
comply with this constitutes an unlawful practice pursuant to
section 2 of P.L. 1960, c. 39 (C. 56:8-2).
director may institute proceedings against any manufacturer who
fails to comply with any of the provisions of this act.
No liability, cause of action.
in this act shall be construed as imposing any liability on a
dealer, or creating a cause of action by a manufacturer against
a dealer, and nothing shall be construed as imposing any
liability on a dealer, or creating a cause of action by a
consumer against a dealer under section 4 of this act.
No limitation on rights.
in this act shall in any way limit the rights or remedies which
are otherwise available to a consumer under any other law.
agreement entered into by a consumer for the purchase or lease
of a new motor vehicle which waives, limits or disclaims the
rights set forth in this act shall be void as contrary to public
120 days following enactment, the director shall, subject to
approval by the Attorney General and pursuant to the provisions
of the "Administrative Procedure Act," P.L. 1968, c.
410 (C. 52:14B-1 et seq.), adopt rules and regulations necessary
to effectuate the purposes of this act.