Pub. 15 2016-2017 Issue 4

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S 15 new jersey auto retailer W W W . N J C A R . O R G FORECAST  continued on page 16 NEW JERSEY LEGISLATIVE FORECAST FOR 2017 BY PATRICK COX, ESQ. T he 2016-2017 Legislative Session has re - opened, and there are a number of proposed Bills already filed or in the pipeline that NJ CAR will be monitoring closely. With a lame-duck Governor and the new presidential administration breaking al l the rules and dominating the political news, things could become a little bit unpredictable. Following is a review of the more significant proposalsNJ CARwill bewatching, some of which may require grass- roots action by the Coalition’s membership. Proposed, not formally filed: A Cap on Doc Fees. Doc Fees continue to be a constant target for consumer protection advocates, with at least one Bill always pending in the Leg- islature to establish a limit or maximum amount that can be charged for a doc fee, as is the case in both New York and Penn- sylvania. Given that both of our neighbor states have adopted maximum doc fee laws (and both set quite low) , just maintaining the status quo here in New Jersey is a victory. 2017 only promises more of the same, but no major change is likely through the cur- rent gubernatorial term. While there has been little traction for a frontal attack on doc fees, State regula- tors (and the plaintiffs’ bar) have found an indirect means of attack, through the advertising regulations. It has been the general practice of the industry NOT to include “doc fees” in the “advertised price” of vehicles, instead setting forth only the vehicle price. However, the ad- vertising regulations set forth the exact wording of a mandatory disclosure which must be included in all advertisements. This disclosure states “Price(s) include(s) all costs to be paid by a consumer, except for licensing costs, registration fees, and taxes.” The term “doc fees” is not present in the disclaimer. Since the doc fee is not included in the exclusion, the argument goes, then they must be included in the price. At this point, NJ CAR advises that doc fees should be disclosed, either in the price or in a separate disclosure, follow- ing the mandatory disclosure language quoted above. This disclosure could be as simple as “Price does not include dealer’s documentary fee of $____.” Adopting this practice has the great benefit of pro- viding a legitimate public policy argument in opposition to the proposal to cap fees, based on free market theory. Full disclo- sure allows market forces to come to bear on doc fees, as consumers will choose to buy from the dealership with the lowest doc fee. Thus, natural competitive forces will protect the consumer and ensure that doc fees remain reasonable. A-215- Invalidates consumer contracts which require a waiver of right to file a consumer complaint. A-759- Prohibits certain provisions in consumer contracts. These proposals would prohibit arbitration clauses in consumer contracts. NJ CAR stronglyopposes theprohibitionof arbitration, as the use of arbitration clauses is the only pro- tection the industry has against abusive class actions basedonharmless technicalmistakes– lawsuits which provide no benefit to anyone except the attorneyswho file them. NJCAR’s position is supported by the federal Arbitra- tion Act, which states that it is the policy of the United States to favor arbitration and to enforce all arbitration clauses validly entered into, except in extraordinary cases. Sound public policy favors arbitration and other forms of alternative dispute resolution, which provide a quicker, more economical means to resolve disputes while reducing the burden on the courts. These proposals contradict the provisions of the federal Arbitration Act. A-2790 - “Used Car Buyers’ Bill of Rights”; prohibits “as is” sales of used motor vehicles. Modelled on a California law, this Bill requires dealers to offer buyers a 48-hour period, during which they can cancel their contract and return a vehicle for any or no reason. This may sound bad, but the law says the dealership can charge an ad- ditional fee for this cancellation right, and that the buyer must pay a re-stocking fee if a vehicle is returned. Between these two fees, allowed under the law, a dealership