H. B. 2082
(By Delegate Michael)
[Introduced February 14, 2001
; referred to the
Committee on the Judiciary then Finance.]
A BILL to amend chapter seventeen-a of the code of West Virginia,
one thousand nine hundred thirty-one, as amended, by adding
thereto a new article, designated article six-e, relating to
providing for automobile trade-in protection for automobile
dealers; setting forth legislative findings and conclusions;
providing definitions; providing that disclosure of hidden
defects is required by person trading or selling automobile to
dealer; providing that intentionally and fraudulently failing
to disclose hidden defects is actionable; and, requiring the
department of motor vehicles to prescribe form disclosure
statements.
Be it enacted by the Legislature of West Virginia:
That chapter seventeen-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding
thereto a new article, designated article six-e, to read as
follows:
ARTICLE 6E. DISCLOSURE OF DEFECTS BY TRADERS OR SELLERS.
§17A-6E-1. Findings and conclusions.
The Legislature hereby finds that the sale of automobiles
constitutes a substantial portion of economic activity in this
state but historically has been the source of friction and
animosity between dealers of automobiles and consumers. The
Legislature further finds that a substantial contributing factor to
this historical pattern exists when individuals trade in or sell
used vehicles to dealers with hidden defects that are not readily
detectable but which ultimately constitute a major detraction from
the value of a vehicle after trade in or sale to the dealer. When
this occurs, the dealer is forced to shift the added burden of cost
on to other consumers who purchase automobiles. Accordingly, the
Legislature concludes that individuals who trade in or sell used
vehicles to automobile dealers should be required to disclose any
known hidden defects of a substantial nature.
§17A-6E-2. Definitions.
For the purposes of this article, the following words and phrases have the following meanings:
(a) "Material defect" means any damage, defect or deficiency
which by virtue of its existence devalues the blue book wholesale
value, or in the event no blue book value is ascertainable, then
the wholesale market value, of an automobile by twenty-five percent
or more;
(b) "Blue book" means the reference guide published by the
national automobile dealers association (NADA) which assigns
wholesale and retail values to automobiles;
(c) "Hidden material defect" means a material defect which,
upon reasonable inspection by a person possessing more than average
knowledge about the value of used automobiles, is not evident or
ascertainable upon normal and reasonable inspection.
§17A-6E-3. Requirement of disclosure of hidden material defects.
(a) Any person who sells or trades any used automobile to any
automobile dealer operating in this state is required to complete
a written disclosure statement setting forth all hidden material
defects of the automobile that the person is aware exists. In the
event a person knowingly and fraudulently fails to disclose
material defects, that person is liable in damages to the dealer in
an amount commensurate to the devaluation of the automobile attributable to the hidden material defect.
(b) The department of motor vehicles shall prescribe a form
disclosure statement as required by this section.
NOTE: The purpose of this bill is to require persons who trade
or sell used vehicles to auto dealers to disclose hidden defects
which devalue the used car by 25% or more of its book or market
wholesale value.
This article is new; therefore, strike-throughs and
underscoring have been omitted.
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