a. Prior to executing a bill of sale with a consumer for the purchase of an automobile, a second-hand automobile dealer shall offer such consumer an automobile contract cancellation option that authorizes such consumer to cancel the sales contract, subject to the conditions set forth in this section. Until such option is declined in writing or forfeited by such consumer, such dealer may retain possession of and title to such automobile.
b. An automobile contract cancellation option shall be contained in a document separate from any sales, purchase, or financing agreement or contract and its terms shall be incorporated into the bill of sale governing each sale. The form and content of such automobile contract cancellation option document shall be prescribed by the commissioner by rule. The automobile contract cancellation option document shall contain, at a minimum, the following:
1. The name of the second-hand automobile dealer and the consumer;
2. A description of the second-hand automobile and the vehicle identification number of such automobile;
3. A statement specifying that the consumer may exercise the option to cancel the sales contract no later than the dealer's close of business on the second business day following the day on which the bill of sale was signed by the consumer or the day on which the retail installment contract was signed by the consumer, whichever occurs later;
4. A statement that the consumer has the option to cancel the sales contract and obtain a full refund and that such option will apply only if, within the two business day period specified in the automobile contract cancellation option document, such consumer personally delivers to the second-hand automobile dealer a written statement signed by such consumer, pursuant to paragraph 8 of this subdivision, exercising the option to cancel the sales contract;
5. A statement clearly indicating the date and time by which the option to cancel the sales contract may be exercised;
6. A statement specifying that the second-hand automobile dealer may retain possession of and title to such vehicle until such consumer declines in writing the option to cancel the sales contract or forfeits such option;
7. A statement that, when signed by the consumer, acknowledges receipt of the automobile contract cancellation option document and indicates whether such consumer has accepted or declined the option offered therein;
8. A statement that, if signed by such consumer, will either execute the cancellation of the sales contract, provided all necessary conditions for such cancellation have been met, or decline such cancellation, provided further that the consumer has previously accepted the automobile contract cancellation option;
9. A statement specifying that the consumer will execute documents reasonably necessary to effectuate the cancellation of the sales contract and the refund as reasonably required to comply with applicable law; and
10. If the sales contract includes a trade-in automobile, a statement specifying the consumer's rights in connection with such automobile and the terms and conditions that apply if such consumer elects to use the trade-in automobile during the cancellation period.
c. A consumer who has accepted an automobile contract cancellation option may exercise the option to cancel the sales contract no later than the dealer's close of business on the second business day following the day on which either the bill of sale or the retail installment contract was signed by such consumer, whichever such signing occurred later. A consumer shall forfeit the option to cancel the sales contract by failing to respond in writing to the business within such cancellation period.
d. A consumer's timely in-person delivery to the second-hand automobile dealer of the automobile contract cancellation option with such consumer's signature shall constitute sufficient written notice to such dealer of such consumer's exercise of the option to cancel the sales contract.
e. Upon delivery in person by a consumer of a written, signed statement exercising the option to cancel the sales contract in compliance with an automobile contract cancellation option, the second-hand automobile dealer shall immediately cancel the contract and provide such consumer with a full refund, including any sales tax collected in connection with the purchase.
f. The second-hand automobile dealer shall provide a consumer with a copy of the contract cancellation option document containing such consumer's signature accepting or declining the terms of the option. If the consumer exercises such option, the dealer shall provide such consumer with a copy of the document submitted by such consumer exercising such option.
g. A consumer who accepts an automobile contract cancellation option as part of a sales contract in which a trade-in automobile is included shall pay a refundable deposit of $100, and may:
1. Leave the trade-in automobile with the second-hand automobile dealer, who shall retain such automobile until the consumer exercises the option to cancel the sales contract or the option expires. If the consumer exercises the option to cancel the sales contract, such dealer shall keep the $100 deposit and return the trade-in automobile to the consumer no later than the day on which the consumer exercises such option. If the consumer declines to exercise the option to cancel the sales contract, such dealer shall return the $100 deposit to the consumer. If such dealer inadvertently sells or otherwise transfers title to the trade-in automobile as a result of bona fide error, notwithstanding reasonable procedures designed to avoid that error, such sale or transfer of title shall not be considered a violation of this paragraph, and the full refund described in subdivision e of this section shall include the retail market value of such trade-in automobile, or its value as stated in the sales contract, whichever is greater; or
2. Use the trade-in automobile during the cancellation period for a non-refundable fee of $50 payable to the second-hand automobile dealer. During such cancellation period, the consumer shall be prohibited from driving more than 250 miles in the trade-in automobile and must return such automobile in the same condition as when such automobile was presented to such dealer as a trade-in automobile, excepting any reasonable wear and tear. If the consumer declines to exercise the option to cancel the sales contract, such dealer shall return the $100 deposit to the consumer, provided that if the consumer does not comply with the terms and conditions governing the use of such trade-in automobile during the cancellation period, the dealer may either cancel the sales contract or keep such deposit. The dealer shall not be required to deliver the second-hand automobile to the consumer until the trade-in automobile has been delivered to the dealer.
h. A second-hand automobile dealer shall not increase the price of an automobile or impose a fee on a consumer in connection with the exercise of an automobile contract cancellation option except as provided in subdivision g of this section.
i. A second-hand automobile dealer shall not require that a consumer declines an automobile contract cancellation option or declines cancelling a sales contract as a condition for the purchase of a second-hand automobile.
(L.L. 2017/197, 10/16/2017, eff. 2/13/2018)