NJ CAR is working with members of both the New Jersey Senate and Assembly to move the Coalition-backed Motor Vehicle Open Recall Notice and Fair Compensation Act (A4380/ S3309) through the legislative process. The bill is currently pending before both the Assembly Consumer Affairs Committee and the Senate Transportation Committee. In early June, NJ CAR launched a grassroots campaign, targeting the members of both committees and asking them to sign on as a co-sponsor of the bill, which addresses serious public safety and consumer protection issues.

Manufacturers have long done the bare minimum to notify consumers about safety defects, which has resulted in less than half of all vehicles under recall ever getting repaired. This is a serious highway safety risk, a financial windfall for OEMs, and a financial burden to consumers and dealers. 

The bill is intended to dramatically improve recall completion rates by requiring automakers to provide the NJMVC with a list of all registered vehicles with unresolved recalls more than six months old and to create a more robust notification system and outreach to the owners of affected vehicles.

This legislation is also designed to prevent automakers from unfairly manipulating the compensation they pay local dealerships and the technicians who repair vehicles on behalf of affected consumers.

The legislation amends the New Jersey Franchise Practices Act and addresses a variety of issues important to dealers and consumers. Some of the provisions that NJ CAR hopes will be included in the final legislation include the following:

• Prohibiting the sale of unsafe used vehicles under a “stop sale” or “do not drive” recall.
• Requiring all used car dealers to check the National Highway Traffic Safety Administration (NHTSA) website (safercar.gov) for open recalls on a vehicle before it is sold. 
• Codifying the existing requirement for dealers to disclose whether a vehicle is subject to any open recall at the time of sale.
• Providing a “safe harbor” defense to any consumer fraud claim, as long as the dealer checked the NHTSA website and found no recall on the vehicle before it was sold.
• Requiring automakers to provide the New Jersey Motor Vehicle Commission (NJMVC) with a list of all New Jersey-registered vehicles under recall for six (6) months or more (that have yet to be repaired) and, in cooperation with the NJMVC, to send notice to those registered vehicle owners with unresolved recalls.
• Requiring automakers to compensate their franchisees for specified costs associated with a “stop sale” or “do not drive” order.
• Defining the dealers’ recall costs more clearly and requiring OEMs to compensate dealers 1.75% per month of the book value of any used vehicle subject to a “stop sale” recall.
• Clarifying provisions in existing law, which require an automaker to pay dealers a fair retail rate of reimbursement on parts and labor to repair vehicles under recall.
• Protecting auto retailers from being subject to financial or other penalties levied by an automaker in the event they bring a claim for reimbursement of recall costs.
• Prohibiting manufacturers from recovering their cost of compliance with state law and requiring retail reimbursement to dealers for parts and services provided for warranty and safety recalls.
• Prohibiting manufacturers from arbitrarily and unilaterally reducing the retail price of parts required for warranty and safety recall services immediately preceding or during a recall campaign to avoid paying dealers fair compensation for warranty and safety recall work.