New Legislation Regarding Damage Disclosure to Motor Vehicles

by | Feb 17, 2017 | Automotive Law

KY LEGISLATIVE UPDATE

To All Dealers:

KADA priority issue (HB 294) on damage disclosure, is scheduled to be heard by the House Transportation Committee on Tuesday, February 21st.  (See details below)

Please contact your state legislators and ask them to co-sponsor/support this bill.

You can find your legislator by going to the link below:

http://legislature.ky.gov/

HB 294 – Introduced by Representative Suzanne Miles – co-sponsors D. Hale and DJ Johnson – An ACT relating to the disclosure of damages by motor vehicle dealers – Amends KRS 186A.540 and KRS 190.0491 to clarify that sellers and dealers must disclose accident damage to a motor vehicle, raise the damage threshold for reporting from $1,000 to $2,000; exempt wheels, tires and glass from the calculation of the damage reporting threshold:

  • Increases the damage disclosure threshold from $1,000 to $2,000
  • Exclude repair estimates from the language of the bill
  • Exclude repair for wheels, tires and glass
  • Provides for updates to the legislation effecting both used and new vehicles

Talking Points:

  • Currently motor vehicle dealers are required to disclose repairs in excess of $1,000 to a prospective purchaser of a vehicle.
  • This amount has not been updated since 2000.  Net rate of inflation in that period has been 39.4%.
  • Vehicles have become more complicated to repair and parts prices have increased with this complexity.
  • Reconditioning of an automobile for sale primarily include cosmetic repairs that do not impact drivability or long term value. 
  • The replacement and painting of a bumper cover plus the replacement of a cracked windshield will easily exceed the $1,000 threshold. 
  • HB 294 increases the threshold from $1,000 to $2,000 reflecting cost increases over the past 16 years. 
  • In addition, HB 294 exempts the replacement of tires, wheels and glass from the calculation.  This provides a clearer picture of the vehicle repairs, rather than including consumable items like tires and components that are not directly tied to the value of the vehicle but are costly and easily replaced.
  • This bill passed both Transportation Committees in 2016, but became entangled in unrelated floor amendments in the Senate during the closing days of the Session.