Rhode Island Used Car Lemon Law Statutes

SECTION 31-5.4-1

§ 31-5.4-1 Sale of used motor vehicles - Definitions. - As used in this chapter, the following words have the following meanings:

(1) "Consumer" means the purchaser, other than for purposes of resale, of a used motor vehicle normally used for personal, family, or household purposes and subject to a warranty, and the spouse or child of the purchaser if the motor vehicle is transferred to the spouse or child during the duration of any warranty applicable to the motor vehicle, and any other person entitled by the terms of such warranty to enforce the obligations of the warranty;

(2) "Dealer" means any person or business which sells or offers for sale a used vehicle after selling or offering for sale three (3) or more used vehicles in the previous twelve (12) month period, but does not include a bank or financial institution, a business selling a used vehicle to an employee of that business, a lessor selling a leased vehicle to that vehicle's lessee, a family member of the lessee, or an employee of the lessee, or the state, its agencies, bureaus, boards, commissions, and authorities, and all of the political subdivisions of the state, including the agencies and authorities of any subdivision;

(3) "Repair insurance" means a contract in writing for any period of time or any specific mileage to refund, repair, replace, maintain, or take other action with respect to a used motor vehicle and which is regulated by the department of business regulation;

(4) "Service contract" means a contract in writing for any period of time or any specific mileage to refund, repair, replace, maintain, or take other action with respect to a used motor vehicle and provided at an extra charge beyond the price of the used motor vehicle;

(5) "Used motor vehicle" means a passenger motor vehicle, excluding motorcycles, motor homes, and off-road vehicles, which has been driven more than the limited use necessary in moving or road-testing a new vehicle prior to delivery;

(6) "Warranty" means any undertaking in connection with the sale by a dealer of a used motor vehicle to refund, repair, replace, maintain, or take other action with respect to the used motor vehicle and provided at no extra charge beyond the price of the used motor vehicle.

SECTION 31-5.4-2

§ 31-5.4-2 Written warranty required - Terms. (a) No dealer shall sell a used motor vehicle to a consumer without giving the consumer a written warranty which shall at minimum apply for the following terms: (1) If the used motor vehicle has thirty-six thousand (36,000) miles or less, the warranty shall be at a minimum of sixty (60) days or three thousand (3,000) miles, whichever comes first.

(2) If the used motor vehicle has more than thirty-six thousand (36,000) miles, but not more than one hundred thousand (100,000) miles, the warranty shall be at a minimum of thirty (30) days or one thousand (1,000) miles, whichever comes first.

(b) The written warranty shall require the dealer or his or her agent to repair or, at the election of the dealer, reimburse the consumer for the reasonable cost of repairing the failure of a covered part. Covered parts shall at least include the following items: (1) Engine. All lubricated parts, water pump, fuel pump, manifolds, engine block, cylinder head, rotary engine housings, and flywheel.

(2) Transmission. The transmission case, internal parts, and the torque converter.

(3) Drive axle. Front and rear drive axle housings and internal parts, axle shafts, propeller shafts, and universal joints.

(4) Brakes. Master cylinder, vacuum assist booster, wheel cylinders, hydraulic lines and fittings, and disc brake calipers.

(6) Steering. The steering gear housing and all internal parts, and the power steering pump, valve body, piston, and rack.

(7) The alternator, generator, starter, and ignition system, excluding the battery.

(c) Any required repair or reimbursement shall be made by the dealer notwithstanding the fact that the warranty period has expired, provided the consumer notifies the dealer of the failure of a covered part within the specified warranty period.

(d) If a new car warranty is in effect at the time of the sale of the used motor vehicle, then the warranty specified in this section shall be required only for the period of time, if any, between the expiration of the new car warranty and the period specified in subsection (a) of this section.

(e) The written warranty may contain additional language excluding coverage: (1) For a failure of a covered part caused by a lack of customary maintenance;

(2) For a failure of a covered part caused by collision, abuse, negligence, theft, vandalism, fire, or other casualty and damage from the environment (windstorm, lightning, road hazards, etc.);

(3) If the odometer has been stopped or altered so that the vehicle's actual mileage cannot be readily determined or if any covered part has been altered so that a covered part was thereby caused to fail;

(4) For maintenance services and the parts used in connection with those services such as seals, gaskets, oil, or grease unless required in connection with the repair of a covered part;

(5) For a motor tune-up;

(6) For a failure resulting from racing or other competition;

(7) For a failure caused by towing a trailer or another vehicle unless the used motor vehicle is equipped for this as recommended by the manufacturer;

(8) If the used motor vehicle is used to carry passengers for hire;

(9) If the used motor vehicle is rented to someone else;

(10) For repair of valves and/or rings to correct low compression and/or oil consumption which are considered normal wear;

(11) To the extent otherwise permitted by law, for property damage arising or allegedly arising out of the failure of a covered part; and

(12) To the extent otherwise permitted by law, for loss of the use of the used motor vehicle, loss of time, inconvenience, commercial loss, or consequential damages.

SECTION 31-5.4-3

§ 31-5.4-3 Failure to honor warranty. (a) If the dealer or his or her agent fails to correct a malfunction or defect as required by the warranty specified in this section which substantially impairs the value of the used motor vehicle to the consumer after a reasonable period of time, the dealer shall accept the return of the used motor vehicle from the consumer and refund to the consumer the full purchase price including sales or compensating use tax, less a reasonable allowance for any damage not attributable to normal wear or usage, and an adjustment for any modifications which either increase or decrease the market value of the vehicle. In determining the purchase price to be refunded, the purchase price shall be deemed equal to the sum of the actual cash difference paid for the used motor vehicle plus, if the dealer elects to not return any vehicles traded-in by the consumer, the wholesale value of those traded-in vehicles as listed in the National Auto Dealers' Association Used Car Guide, or any other guide that may be specified in regulations promulgated by the administrator of the division of motor vehicles, as adjusted for mileage, improvements, and any major physical or mechanical defects in the traded-in vehicle at the time of trade-in. The contract of sale for the used motor vehicle shall include conspicuous language indicating that if the consumer should be entitled to a refund pursuant to this section, the value of any vehicle traded-in by the consumer, if the dealer elects to not return it to the consumer, for purposes of determining the amount of the refund will be determined by reference to the National Auto Dealers' Association Used Car Guide wholesale value, or any other guide that may be approved by the administrator of the division of motor vehicles, as adjusted for mileage, improvements, and any major physical or mechanical defects, rather than the value listed in the sales contract. Refunds shall be made to the consumer and lienholder, if any, as their interests may appear on the records of ownership kept by the division of motor vehicles. If the amount to be refunded to the lienholder will be insufficient to discharge the lien, the dealer shall notify the consumer in writing by registered or certified mail that the consumer has thirty (30) days to pay the lienholder the amount which, together with the amount to be refunded by the dealer, will be sufficient to discharge the lien. The notice to the consumer shall contain conspicuous language warning the consumer that failure to pay those funds to the lienholder within thirty (30) days will terminate the dealer's obligation to provide a refund. If the consumer fails to make the payment within thirty (30) days, the dealer shall have no further responsibility to provide a refund under this section. Alternatively, the dealer may elect to offer to replace the used motor vehicle with a comparably priced vehicle, with any adjustment in price that the parties may agree to. The consumer shall not be obligated to accept a replacement vehicle, but may instead elect to receive the refund provided under this section. It shall be an affirmative defense to any claim under this section that: (1) The malfunction or defect does not substantially impair the used motor vehicle's value; or

(2) The malfunction or defect is the result of abuse, neglect, or unreasonable modifications or alterations of the used motor vehicle.

(b) It shall be presumed that a dealer has had a reasonable opportunity to correct a malfunction or defect in a used motor vehicle, if: (1) The same malfunction or defect has been subject to repair three (3) or more times by the selling dealer or his or her agent within the warranty period, but the same malfunction or defect continues to exist; or

(2) The vehicle is out of service by reason of repair or malfunction or defect for a cumulative total of fifteen (15) or more days during the warranty period. That period shall not include days when the dealer is unable to complete the repair because of the unavailability of necessary repair parts. The dealer shall be required to exercise due diligence in attempting to obtain necessary repair parts. If, however, a vehicle has been out of service for a cumulative total of forty-five (45) days, even if a portion of that time is attributable to the unavailability of replacement parts, the consumer shall be entitled to the replacement or refund remedies provided in this section.

(c) The term of any warranty, service contract, or repair insurance shall be extended by any time period during which the used motor vehicle is in the possession of the dealer or his or her duly authorized agent for the purpose of repairing the used motor vehicle under the terms and obligations of the warranty, service contract, or repair insurance.

(d) The term of any warranty, service contract, or repair insurance, and the fifteen (15) days out-of-service period, shall be extended by any time during which repair services are not available to the consumer because of a war, invasion or strike, fire, flood, or other natural disaster.

SECTION 31-5.4-4

§ 31-5.4-4 Waiver notice. (a) Whenever any agreement is entered into by a consumer with a dealer for the purchase of a used motor vehicle which waives or disclaims the rights set forth in this chapter, the dealer shall post a notice unobstructed and conspicuously on the windshield of the vehicle to be sold. The notice shall be at least eight and one-half inches (8 1/2") by eleven inches (11") in size, in bold print one inch in height, and shall state, "NO WARRANTY AS TO CONDITION - SOLD AS IS".

(b) Whenever any dealer enters into an agreement with a consumer for a purchase of a motor vehicle, any waiver or disclaimer of the rights set forth in this chapter shall be printed on the bill of sale in a type size larger and of a different color than any other type on the bill of sale. The waiver shall be separately initialed by the purchaser and the dealer.

(c) Nothing in this section shall in any way limit the rights or remedies which are otherwise available to a consumer under any other law.

(d) Notwithstanding subsection (a) of this section, this chapter shall not apply to used motor vehicles sold for less than one thousand five hundred dollars ($1,500). Further, this chapter shall not apply to the sale of classic cars registered pursuant to this title.

SECTION 31-5.4-5

§ 31-5.4-5 Arbitration and enforcement. (a) If a dealer has established or participates in an informal dispute settlement procedure which complies in all respects with the provisions of 16 CFR Part 703 the provisions of this chapter concerning refunds or replacement shall not apply to any consumer who has not first resorted to that procedure.

(b) In no event shall a consumer who has resorted to an informal dispute settlement procedure be precluded from seeking the rights or remedies available by law.

(c) In an action brought to enforce the provisions of this chapter, the court may award reasonable attorneys' fees to a prevailing plaintiff.

(d) Any action brought pursuant to this chapter shall be commenced within four (4) years of the date of original delivery of the used motor vehicle to the consumer.

SECTION 31-5.4-6

§ 31-5.4-6 Disclosure of rights. (a) The director of the department of administration shall promulgate rules, regulations and forms to implement the notice provision in subsection (b) of this section. The forms promulgated by the director shall be used by every dealer in the sale of every automobile protected by this chapter.

(b) Clear and conspicuous notice of the warranties created by this chapter of the rights pertaining to them and of the implied warranty of merchantability shall be given to the consumer in writing at the time the consumer purchases a used motor vehicle from the dealer. Each notice required by this section shall describe the procedures available to redress violations of this section and shall contain the telephone number of the department of administration.

(c) A seller's failure to provide the buyer with the documents and forms promulgated by the director of the department of administration pursuant to this section shall constitute prima facie evidence of bad faith and unfair and deceptive trade practice under § 6-13.1-1. Violations of this section shall be actionable by the buyer under §§ 31-5.4-5 and 6-13.1-5.2.