23
c. Failure to honor warranty.
1. If the dealer or his agent fails to correct a malfunction or defect as
required by the warranty specified in this section which substantially impairs the value
of the used motor vehicle to the consumer after a reasonable period of time, the dealer
shall accept return of the used motor vehicle from the consumer and refund to the
consumer the full purchase price, or in the case of a lease contract all payments made
under the contract, including sales or compensating use tax, less a reasonable allowance
for any damage not attributable to normal wear or usage, and adjustment for any
modifications which either increase or decrease the market value of the vehicle or of the
lease contract, and in the case of a lease contract, shall cancel all further payments due
from the consumer under the lease contract. In determining the purchase price to be
refunded or in determining all payments made under a lease contract to be refunded, the
purchase price, or all payments made under a lease contract, shall be deemed equal to
the sum of the actual cash difference paid for the used motor vehicle, or for the lease
contract, plus, if the dealer elects to not return any vehicles traded-in by the consumer,
the wholesale value of any such traded-in vehicles as listed in the National Auto Dealers
Association Used Car Guide, or such other guide as may be specified in regulations
promulgated by the commissioner of motor vehicles, as adjusted for mileage,
improvements, and any major physical or mechanical defects in the traded-in vehicle at
the time of trade-in. The dealer selling or leasing the used motor vehicle shall deliver
to the consumer a written notice including conspicuous language indicating that if the
consumer should be entitled to a refund pursuant to this section, the value of any vehicle
traded-in by the consumer, if the dealer elects to not return it to the consumer, for
purposes of determining the amount of such refund will be determined by reference to
the National Auto Dealers Association Used Car Guide wholesale value, or such other
guide as may be approved by the commissioner of motor vehicles, as adjusted for
mileage improvements, and any major physical or mechanical defects, rather than the
value listed in the sales contract. Refunds shall be made to the consumer and lienholder,
if any, as their interests may appear on the records of ownership kept by the department
of motor vehicles. If the amount to be refunded to the lienholder will be insufficient to
discharge the lien, the dealer shall notify the consumer in writing by registered or
certified mail that the consumer has thirty days to pay the lienholder the amount which,
together with the amount to be refunded by the dealer, will be sufficient to discharge the
lien. The notice to the consumer shall contain conspicuous language warning the
consumer that failure to pay such funds to the lienholder within thirty days will terminate
the dealer's obligation to provide a refund. If the consumer fails to make such payment
within thirty days, the dealer shall have no further responsibility to provide a refund
under this section. Alternatively, the dealer may elect to offer to replace the used motor
vehicle with a comparably priced vehicle, with such adjustment in price as the parties
may agree to. The consumer shall not be obligated to accept a replacement vehicle, but
may instead elect to receive the refund provided under this section. It shall be an
affirmative defense to any claim under this section that:
(a) The malfunction or defect does not substantially impair such value; or
(b) The malfunction or defect is the result of abuse, neglect or unreasonable
modifications or alterations of the used motor vehicle.