Misrepresentation of Age and Condition of Motor Vehicles FEB 2012

February 2013

                       MOTOR VEHICLES        ISSUING AGENCY:  Office of the New Mexico Attorney General.
[ NMAC - N, x/x/2013]        SCOPE:  Misrepresentation of age and condition of motor vehicles.
[ NMAC - N, x/x/2013]        STATUTORY AUTHORITY:  The New Mexico Unfair Practices Act, NMSA 1978, Section 57-12-13.
[ NMAC - N, x/x/2013]        DURATION:  Permanent.
[ NMAC - N, x/x/2013]        EFFECTIVE DATE:  xx, 2013, unless a later date is cited at the end of a section.
[ NMAC - N, x/x/2013]        OBJECTIVE:  The purpose of this rule is to protect buyer consumers from unfair and deceptive practices involving the misrepresentation of the age or condition of a motor vehicle in motor vehicle sale transactions.
[ NMAC - N, x/x/2013]        DEFINITIONS:
        A. “Alteration” shall mean the act or procedure of changing, modifying or repairing, the condition resulting from changing, modifying or repairing, or the modification to a motor vehicle’s cab, chassis, or body.  The alteration may be, but is not required to be, the result of wreck damage. Goods are altered if, as measured against the reasonable expectations of the consumer, the characteristics or value of the motor vehicle are affected in a meaningful way by the changes, modifications or repairs.  See Hale v. Basin Motor Co., 110 N.M. 314, 317-318 (N.M. 1990).
        B. “Body” shall mean the external structure of the motor vehicle exclusive of the cab and chassis.
        C.  “Cab” shall mean the compartment of a motor vehicle where the driver and passengers sit.
        D. “Chassis” means frame and working parts of the motor vehicle, including standard factory equipment, but exclusive of the body and cab.
        E.  “Costs of alterations or repairs amounting to six percent or greater of the purchase price” means the flat rate manual cost of the alteration or repair, regardless of when in time the alteration or repair took place, in comparison to the purchase price of the vehicle at the time it was sold to the buyer consumer.  Any motor vehicle transaction, where the flat rate manual cost of the alteration or repair which exceeds six percent of the cost of the vehicle at the time when it is sold to the buyer consumer is subject to this rule.
        F. “Fixed rate manual cost” means the estimated cost of repair as indicated by a nationally recognized manual commonly used in the industry of auto repair.
        G. “Knowledge” does not necessarily mean actual knowledge, but means knowledge that a prudent person would have if the person had exercised reasonable care or diligence.  One who intentionally remains ignorant is chargeable in law with knowledge.  See Stevenson v. Louis Dreyfus Corp., 112 N.M. 97, 100 (N.M. 1991).
        H.  “Motor vehicle” shall mean every vehicle that is self-propelled and every vehicle that is propelled by electric power obtained from batteries or from overhead trolley wires, but not operated upon rails.   This includes but is not limited to automobiles, trucks of all varieties, motor cycles, recreational vehicles, reconstructed motor vehicles, specially constructed motor vehicles, road tractors, all of which may be for personal, household, or commercial use.
        I.  “Purchase price” shall mean the actual price before the deduction of the value of any trade-in and shall not include such charges as taxes, registration fees, extended warranties, service contracts,  credit of disability insurance, or any other charges incidental to the purchase.
        J. “Qualified person” shall mean a person who is ASE certified in the areas of (1) painting and refinishing, (2) structural and non-structural analysis and repair and (3) mechanical and electrical components analysis and repair of motor vehicle cab, chassis, or body, or a person who possesses comparable or similar knowledge and skills, and who has continuously worked in the industry, for a period of five years or more, making alterations and repairs to the cab, chassis, or body of motor vehicles.
        K. “Repair or repairing” shall mean to restore or attempt to restore to sound condition after damage, or the fixing of a motor vehicle’s cab, chassis, or body regardless of whether or not the damage is from wreck damage.
        L. “Seller” shall mean natural persons, corporations, trusts, partnerships, associations, cooperative associations, clubs, companies, firms, joint ventures or syndicates which include either:
               (1) any person who sells, or solicits or advertises the sale of new or used motor vehicles and who is licensed pursuant to the Motor Vehicle Code,  NMSA 1978, Section 66-4-1(A); or
               (2) any person who sells four or more motor vehicles in a calendar year whether licensed to do so or not pursuant to NMSA 1978, Section 66-4-1(A).
[ NMAC - N, x/x/2013]  UNFAIR AND DECEPTIVE TRADE PRACTICE:  It is an unfair or deceptive trade practice for a seller of a motor vehicle to:
        A. fail to obtain a reasonable inspection of the motor vehicle performed by a qualified person, before prior to offering  the motor vehicle for sale, in order to comply with the affidavit requirements of the Unfair Practices Act NMSA, 1978, Section 57-12-6 (B);
        B. fail to obtain a written report of the inspection completed by the qualified person performing the inspection; the written report shall contain the name, and address of the qualified person who conducted the reasonable inspection, their specific findings of alteration or repair to the motor vehicle and the estimated fixed rate manual costs for repairs;
        C. fail to provide to the consumer prior to the sale, a copy of the inspection report and any other reports obtained by the seller in connection to the inspection of the motor vehicle if the seller’s inspection confirms that the damage to the vehicle requires an affidavit pursuant to the Unfair Practices Act NMSA, 1978, Section 57-12-6 (B);
        D. make any false or misleading representation, prior to the sale of the motor vehicle, concerning any inspection of the motor vehicle or the knowledge of the seller regarding the condition of the vehicle; or
        E. fail to retain a copy of all motor vehicle inspection reports and any other vehicle reports obtained by the seller for four years after the sale of the motor vehicle.
[ NMAC - N, x/x/2013]  REASONABLE INSPECTION OF MOTOR VEHICLE: The following nine point motor vehicle inspection is reasonable for the purposes of this rule and includes, but is not limited to:
        A.  publically available reports on the age or condition of the motor vehicle such as the national motor vehicle title information system report, carfax, or auto check;
        B. inspection of the motor vehicle for evidence of repainting such as:
                       (1) differences in paint color or texture;
                       (2) mismatched sizes of metallic sparkle in the paint
                       (3) embedded dirt or deep scratches in the top coat of the paint   
                        ; and

                       (4) uneven paint thickness;
        C.  inspection of the motor vehicle body and cab for evidence of such
              things as:

                (1) uneven gaps between sheet metal panels;
                (2) differences between the headlamps;
                (3) paint overspray on moldings and trim;
                (4) paint tape edges in the jams;
                (5) paint chipped off of bolt heads;
                (6) paint missing around bolt heads or bolts not centered in the
                          bolt hole;

                      (7) hammer damage;
                       (8) holes drilled and plugged in jams or shell of the motor

                       (9) damage inside the trunk or under the spare tire;
        D.  inspection of the motor vehicle chassis for evidence of such things as:
                (1) pinched weld flange underneath the motor vehicle;
                (2) weld sites;
        E.  inspection of the motor vehicle’s caulking and seam sealer for
             differences and inconsistencies;

        F.  inspection of the motor vehicle’s identification number tags;
               G.  inspection of the motor vehicle parts for labels that say “R-DOT”;
               H.  inspection of the motor vehicle for any type of repairs not consistent
                    with industry standard repairs;

               I.   any additional inquiry or inspection into the motor vehicle’s age or
                    condition based upon any information the seller knows or should know
                    that and which would lead a prudent person to inquire further into
                    the motor vehicle’s age or condition.

[ NMAC - N, x/x/2013]  AFFIDAVIT REQUIRED:  It is an unfair or deceptive trade practice for a seller of a motor vehicle to fail to provide the purchaser with an affidavit at the time of sale that:
        A. describes the vehicle; and
        B. states to the best of the seller’s knowledge the specific alteration or repair which has been done to the motor vehicle in the following circumstances:
                (1) if the motor vehicle has been salvaged;
                (2) if the motor vehicle has frame damage; or
          (3) if after the reasonable inspection of the motor vehicle has been conducted, it has been determined that the alterations or repairs to any part of the motor vehicle for which the fixed rate manual costs in the aggregate amount to six percent or greater of the purchase price of the vehicle.
[ NMAC - N, x/x/2013]  SEVERABILITY:  If any part of this rule is held invalid, the remainder of the rule and applications thereof shall remain unaffected.
[ NMAC - N, x/x/2013]