H. B. 4116

(By Delegate Michael)
[Introduced January 21, 2000; 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-d, 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-d, to read as follows:

§17A-6D-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-6D-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-6D-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, he or she 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.