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Legislative Memo

Ken Pokalsky
Vice President of Government Affairs
T 518.465.7511
www.bcnys.org

BILL:

A.602 (Dinowitz)

Support

SUBJECT:

Automobile Manufacturers' Warranty Adjustment Programs

 

DATE:

April 22, 2013

 

The Business Council opposes this legislation which would require automobile manufacturers to notify eligible consumers of the adoption of a warranty adjustment program by the manufacturer.

The bill mandates that the notification be sent by first-class mail within 90 days of the manufacturer issued warranty adjustment repair policy.

Offering a "warranty adjustment" is another way of saying the manufacturer is providing a goodwill repair free of charge.Automakers voluntarily offer these free repairs to vehicles that are no longer under warranty. Consumers are typically made aware of these special policies by the automobile dealer when there is a particular defect to an automobile model.

The bill seeks to provide consumers with information about warranty adjustments, when they are offered, as a mandatory disclosure.It would also require manufacturers to implement procedures to assure reimbursement of consumers eligible under a warranty adjustment program who incurred expenses for repair prior to acquiring knowledge of the program.

The problem with this legislation is that it treats these "warranty adjustments" as if they were safety recalls. Safety recalls are instituted by either the manufacturer or mandated by the National Highway Traffic Safety Administration (NHTSA) and requires notification and repair to all models with a particular defect. The warranty adjustment repairs are voluntary policy decisions automakers make when a particular defect is exhibited at a consistent level in a particular model. Automakers will only make free repairs on vehicles that exhibit certain characteristics after being diagnosed as eligible by an authorized dealer.

The manufacturer is not required to provide these warranty adjustments and we fear that legislation such as this, with these new mandates will lead to the discontinuance of these goodwill repairs to customers.

Moreover, automakers will incur great costs in mailing out the mandated notices to a consumer who may no longer even own the vehicle. Vehicles that may be eligible for a free repair are often older models of second owners who cannot be contacted due to privacy laws.

Additionally, the bill will mandate that automakers reimburse a consumer for a repair that was not even determined to be eligible by a dealer but instead made by an independent repair shop with no way of knowing whether the repair was eligible or not.

For these reasons, The Business Council recommends disapproval of A.602.