SUMMARY--Provides right to rescind contract for sale of used vehicle under certain circumstances. (BDR 52-745)
FISCAL NOTE: Effect on Local Government: No.
Effect on the State or on Industrial Insurance: No.
EXPLANATION - Matter in italics is new; matter in brackets [ ] is material to be omitted.
AN ACT relating to motor vehicles; providing a right to rescind a contract for the sale of a used vehicle under certain circumstances; and providing other matters properly relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1 Chapter 597 of NRS is hereby amended by adding thereto a new section to read as follows:
1. A contract entered into by a used vehicle dealer for the sale of a used vehicle must contain a provision authorizing the buyer to rescind the contract within 2 business days after the date on which the contract is consummated by notifying the used vehicle dealer in writing. The notice of rescission must be delivered in person or by mail postmarked by midnight of the second business day.
2. The buyer may not rescind the contract pursuant to this section if the used vehicle has been driven 100 miles or more between the time that the contract was consummated and the time that the used vehicle is returned to the used vehicle dealer, as evidenced by the number of miles registered on the odometer of the used vehicle.
3. If the used vehicle dealer:
(a) Accepts a vehicle from the buyer as security or down payment on the contract, the used vehicle dealer shall not effectuate the transfer of the title to the vehicle accepted as security or down payment until after the period for rescission expires.
(b) Effectuates the transfer of title before the period for rescission expires and the contract is rescinded pursuant to this section, the used vehicle dealer is liable to the buyer for the fair market value of the vehicle accepted as security or down payment.
4. If the contract is rescinded pursuant to this section, the buyer is liable to the used vehicle dealer for:
(a) The fair market rental value of the used vehicle, not to exceed $40 for each day, or fraction thereof, for the period during which the buyer possessed the used vehicle; and
(b) The value of any excess wear and tear on that vehicle.
5. If the contract is rescinded pursuant to this section, within 2 calendar days after the required notice of rescission is delivered:
(a) The buyer shall return the used vehicle to the used vehicle dealer.
(b) The used vehicle dealer shall:
(1) Return to the buyer each vehicle accepted by the used vehicle dealer as security or down payment on the contract; and
(2) Refund to the buyer all money paid as a deposit, down payment or other consideration on the contract, less the amount owed by the buyer pursuant to subsection 4.
6. If the contract is rescinded pursuant to this section and the amount of money paid as a deposit, down payment or other consideration on the contract is insufficient to cover the amount owed to the used vehicle dealer pursuant to subsection 4, the used vehicle dealer may commence a civil action in any court of competent jurisdiction to recover the remaining amount owed to him.
7. As used in this section:
(a) "Excess wear and tear" includes:
(1) Broken, damaged or discolored glass;
(2) Damage to the body, fenders, metalwork, lights, trim or paint of the used vehicle;
(3) The removal of equipment that was a part of the used vehicle when the buyer accepted delivery of the used vehicle, if the buyer has not substituted replacement equipment which is suitable to the used vehicle dealer;
(4) Any missing wheel cover, jack or wheel wrench;
(5) Any torn, damaged or stained floor cover, seat, headliner, upholstery, dashboard, interior work or trunkliner;
(6) Any wheel or tire, including the spare tire, that is missing or not in a safe condition;
(7) Damage from flood water, hail or sand; and
(8) Any other damage that makes the vehicle unsafe or unlawful to operate.
(b) "Used vehicle" has the meaning ascribed to it in NRS 482.132.
(c) "Used vehicle dealer" has the meaning ascribed to it in NRS 482.133.
Sec. 2 NRS 97.299 is hereby amended to read as follows:
97.299 1. The commissioner of financial institutions shall prescribe, by regulation, forms for the application for credit and contracts to be used in the sale of vehicles if:
(a) The sale involves the taking of a security interest to secure all or a part of the purchase price of the vehicle;
(b) The application for credit is made to or through the seller of the vehicle;
(c) The seller is a dealer; and
(d) The sale is not a commercial transaction.
2. The forms prescribed pursuant to subsection 1 must meet the requirements of NRS 97.165, must be accepted and acted upon by any lender to whom the application for credit is made and, in addition to the information required in NRS 97.185 and required to be disclosed in such a transaction by federal law, must:
(a) Identify and itemize the items embodied in the cash sale price, including the amount charged for a contract to service the vehicle after it is purchased.
(b) In specifying the amount of the buyer's down payment, identify the amounts paid in money and allowed for property given in trade and the amount of any manufacturer's rebate applied to the down payment.
(c) Contain a description of any property given in trade as part of the down payment.
(d) Contain a description of the method for calculating the unearned portion of the finance charge upon prepayment in full of the unpaid total of payments as prescribed in NRS 97.225.
(e) Contain a statement describing the period for rescission required by section 1 of this act for the sale of a used vehicle, including the rights and liabilities of the seller and the buyer if the contract for the sale of the used vehicle is rescinded during this period.
(f) Include the following notice in at least 10-point bold type:
NOTICE TO BUYER
Do not sign this agreement before you read it or if it contains any blank spaces. You are entitled to a completed copy of this agreement. If you pay the amount due before the scheduled date of maturity of the indebtedness and you are not in default in the terms of the contract for more than 2 months, you are entitled to a refund of the unearned portion of the finance charge. If you fail to perform your obligations under this agreement, the vehicle may be repossessed and you may be liable for the unpaid indebtedness evidenced by this agreement.
3. If a change in state or federal law requires the commissioner to amend the forms prescribed pursuant to subsection 1, the commissioner need not comply with the provisions of chapter 233B of NRS when making those amendments.
4. As used in this section:
(a) "Commercial transaction" means any sale of a vehicle to a buyer who purchases the vehicle solely or primarily for commercial use or resale.
(b) "Dealer" has the meaning ascribed to it in NRS 482.020.
(c) "Used vehicle" has the meaning ascribed to it in NRS 482.132.
Sec. 3 NRS 482.400 is hereby amended to read as follows:
482.400 1. Except as otherwise provided in subsections 2, 5 and 6, upon a transfer of the title to, or the interest of an owner in, a vehicle registered or issued a certificate of ownership under the provisions of this chapter, the person or persons whose title or interest is to be transferred and the transferee shall write their signatures with pen and ink upon the certificate of ownership issued for the vehicle, together with the residence address of the transferee, in the appropriate spaces provided upon the reverse side of the certificate.
2. The department shall provide a form for use by a dealer for the transfer of ownership of a vehicle when the spaces provided upon the reverse side of the certificate of ownership issued for the vehicle have been filled. The form must be produced in a manner which ensures that the form may not be easily counterfeited. Upon the attachment of the form to a certificate of ownership issued for a vehicle, the form becomes a part of that certificate of ownership. The department may charge a fee not to exceed $5 for each form it provides.
3. Except as otherwise provided in subsections 4, 5 and 6, and section 1 of this act, the transferee shall immediately apply for registration as provided in NRS 482.215, and shall pay the privilege taxes due.
4. [If] Except as otherwise provided in section 1 of this act, if the transferee is a dealer who intends to resell the vehicle, he shall deliver immediately to the department or its agent the certificate of registration and the license plate or plates for the vehicle. When the vehicle is resold, the purchaser shall apply for registration as provided in NRS 482.215, and shall pay the privilege taxes due. The dealer is not required to register, pay a transfer or registration fee for, or pay a privilege tax on any such vehicle.
5. If the transferee consigns the vehicle to a wholesale vehicle auctioneer:
(a) The transferee shall, within 30 days after that consignment, provide the wholesale vehicle auctioneer with the certificate of ownership for the vehicle, executed as required by subsection 1, and any other documents necessary to obtain another certificate of ownership for the vehicle.
(b) The wholesale vehicle auctioneer shall be deemed a transferee of the vehicle for the purposes of subsection 4. The wholesale vehicle auctioneer is not required to comply with subsection 1 if he:
(1) Does not take an ownership interest in the vehicle;
(2) Auctions the vehicle to a vehicle dealer or automobile wrecker licensed as such in this or any other state; and
(3) Stamps his name, his identification number as a vehicle dealer and the date of the auction on the certificate of ownership and the bill of sale and any other documents of transfer for the vehicle.
6. A charitable organization which intends to sell a vehicle which has been donated to the organization must deliver immediately to the department or its agent the certificate of registration and the license plate or plates for the vehicle. The charitable organization must not be required to register, pay a transfer or registration fee for, or pay a privilege tax on the vehicle. When the vehicle is sold by the charitable organization, the purchaser shall apply for registration as provided in NRS 482.215 and pay the privilege taxes due.
7. For the purposes of this section, "wholesale vehicle auctioneer" means a dealer who:
(a) Is engaged in the business of auctioning consigned motor vehicles to vehicle dealers or automobile wreckers, or both, who are licensed as such in this or any other state; and
(b) Does not in the ordinary course of his business buy, sell or own vehicles he auctions.
Sec. 4 The amendatory provisions of this act apply to contracts for the sale of a used vehicle that are entered into by a used vehicle dealer on or after October 1, 1997.