New car dealers' bill has fewer consumer protections

Posted: Friday, April 12, 2002

JUNEAU (AP) -- The House Finance Committee has stripped some consumer protection provisions from a car dealers' bill after hearing objections from the industry.

The committee on Wednesday pulled out language that would have required dealers to disclose what they know about used cars they're selling and do inspections of the cars in some cases.

Auto dealers said the requirements were too vague and could amount to a warranty that would hold them liable for problems they did not know about.

''It was really open-ended,'' said Rick Morrison of Eero Volkswagen in Anchorage and a board member of Alaska Automobile Dealers Association.

Steve Conn, executive director of the Alaska Public Interest Research Group, said car buyers are entitled to the information that would have been required and consumer advocates had already compromised away other protections.

''This was a particularly ugly sellout at the 11th hour by the car dealers, who had pretended to work with the consumers and the Department of Law,'' Conn said.

Morrison said the dealers had made their opposition to the deleted provisions known all along.

Attorney Ed Sniffen of the state Department of Law's Fair Business Practices Section said the measure still contains some good provisions for consumers.

''But I think it could be a much better bill if we could resolve some of these used-car inspection'' issues, Sniffen said.

The disputed section of the bill would have required dealers to ask those selling them used cars what they know about the car's accident and repair history. Dealers would then have to disclose that information to potential buyers.

The deleted language also would have required dealers to conduct an inspection of the vehicle, including at a minimum placing the vehicle on a rack and inspecting it under the hood, if there was reason to believe it had defects that might make it unsafe to drive.

Morrison said the inspection requirement was too vague, and it could mean anything from pulling the wheels off to pulling the transmission out or lifting the carpet.

''We would be expected then to catch anything and everything, which you can't do,'' he said.

Dealers said that could create the equivalent of a warranty, with consumers then being able to come back and ask for repairs or refunds if the dealer missed something.

Morrison said the provision would actually hurt consumers by raising the cost of doing business, which would raise car prices.

The dealers are willing to continue working on compromise language as the bill moves through the process, he said.

Sniffen disputed Morrison's interpretation of the section.

''The further inspection wouldn't have created any kind of warranty,'' Sniffen said. Consumers would still have responsibility to look out for themselves, he said.

The provisions were aimed at arming consumers with more information to make their decisions and keeping really unsafe vehicles off the road, Sniffen said.

The department handles more complaints about used cars than any other problem, Sniffen said.

The bill still contains some consumer protections, including prohibitions against advertising that a car is being sold at a reduced price when the original price was never a realistic one.

The bill also provides protections for dealers in their contracts with manufacturers, including prohibitions against a manufacturer locating a new franchise too near an existing franchise.

Voting against removing the consumer protection provisions were Reps. Con Bunde, R-Anchorage; Eric Croft, D-Anchorage; John Davies, D-Fairbanks; and John Harris, R-Valdez. Voting for the change were Reps. Jim Whitaker, R-Fairbanks; Bill Hudson, R-Juneau; Ken Lancaster, R-Soldotna; Bill Williams, R-Saxman; Carl Moses, D-Unalaska; and Eldon Mulder, R-Anchorage.

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