Legislature(2005 - 2006)CAPITOL 17
03/21/2005 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB203 | |
| HB216 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 203 | TELECONFERENCED | |
| *+ | HB 216 | TELECONFERENCED | |
| += | HB 180 | TELECONFERENCED | |
HB 203-MOTOR VEHICLE DEALER SALES CHAIR ANDERSON announced that the first order of business would be HOUSE BILL NO. 203, "An Act relating to a motor vehicle dealer's selling certain motor vehicles as new model motor vehicles or as new model motor vehicles having a manufacturer's warranty." JON BITTNER, Staff to Representative Anderson, Alaska State Legislature, presented HB 203 on behalf of Representative Anderson, sponsor. He explained: House Bill 203 revisits statutory language proposed in the previous legislature in House Bill 272. House Bill 272 was an extensive bill that dealt with many aspects of motor vehicle sales. The language in HB 203 was removed from House Bill 272 after it became obvious there was a need for further discussion with the affected parties. The sponsor of HB 203 as well as the sponsor of the Senate companion bill, SB 138, are currently working on hammering out a compromise regarding the exact language of this bill with the interested parties. MR. BITTNER continued: You'll notice that the sponsor statement in the sectional analysis of your bill packets refer to a committee substitute to HB 203; I apologize for any confusion this may have caused. The Senate introduced a committee substitute to the companion bill last week in [Senate Labor and Commerce Standing Committee], and I was working off of that version. Later there was concern about the new language and it was decided that we should wait until the various parties involved come to a consensus before we introduce a committee substitute. ... What the sponsor is trying to achieve here is amiable and equitable compromise between new and used car dealerships that affects the highest amount of consumer protection as well as allowing a reasonable amount of flexibility to dealers so that they are not unnecessarily burdened. House Bill 203 will amend AS 08.66.015 to modify the circumstances under which car dealers can sell motor vehicles as new or current models. Our goal here is to determine a standard for what defines a new motor vehicle so that cars which have been previously owned will not be sold to consumers as a new vehicle. The sponsor feels that both the consumers' and the dealers' needs can be addressed in a future version of HB 203 and look forward to being able to return to this committee with a product that is both affective and fair. 3:40:30 PM REPRESENTATIVE GUTTENBERG pointed out that the sponsor statement says that a new vehicle must retain a manufacturer's certificate of origin and the manufacturer's warranty, and the dealer must have the current sales and service agreement with the manufacture of the vehicle. He asked if all dealers are going to be able to get a manufacturer's sales and service agreement. MR. BITTNER replied that other witnesses present who will be able to answer that question. 3:41:51 PM STEVEN ALLWINE, Alaska Auto Dealers Association, noted that he is also a local automobile dealer. He stated: This [bill] is not as much about new car dealers as used car dealers; this is about people who, in a lot of respects, might create a situation where a consumer doesn't know if they are buying a new car or a used car, and whether in fact there is a warranty or there is no warranty on that vehicle. There are ways that you can circumvent the system and purchase a vehicle that is new and then subsequently manufacture a used car. ... If you have a situation where you have a connection with a rental car company, you can go in to that rental car company, make an arrangement, extract their inventory that they have ordered from the factory under some very specific incentives, and in fact come up with a price differential that is different than a new car dealer will. 3:43:25 PM MR. ALLWINE continued: This also works if you go across country because manufacturers place incentives in different markets to varying degrees. So you, in a given situation, can go to the East Coast and buy a car from a dealer and bring it to this part of the world and effectively have purchased that car for less money than the dealer in the State of Alaska ... would purchase the car for. ... The kink is in those situations, that vehicle may no longer be a new car. It may not have warranty or the warranty may have already started and expired. In certain situations, if you buy what they call a gray market vehicle, that vehicle potentially could have no warranty on it. 3:44:21 PM MR. ALLWINE stated: So the issue isn't always whether it's used car dealers or new car dealers; the issue is what does a customer perceive when they walk in and look at a car. And if you walk in and look at a car, even if it's on a used car dealer's lot, and that car is a current model, 2005, and it has 2,200 miles on it, I don't care what the salesman tells you, you're perception is going to be that that's a new vehicle. And that may be a problem to the consumer in the long run. And new car dealers, unfortunately, are the people who have to handle those problems when they come up. The current statute that's on the books now needs to be changed for one very important reasons: the statute was done in 1993 and it was to preclude brokers from creating the image that they were new car dealers and holding their vehicles out as new cars. We have found over time that what has happened is the statute was written wrong and so essentially, [as a Chrysler dealer] if I take in a 2005 Ford right now, I am out of compliance. MR. ALLWINE urged the committee to review the committee substitute from the Senate, and to address this issue. 3:46:04 PM REPRESENTATIVE GUTTENBERG commented that rather than going state by state, a better recourse would be to simply go to the manufacturer. MR. ALLWINE noted that he sits on the Dodge Dealer Council for the Western Business Center which has approached manufacturers with this request, but the manufacturer's say that they cannot do that right now. REPRESENTATIVE LYNN asked if this topic had anything to do with "the old Canadian car issue." MR. ALLWINE replied that it does not. He said, "It has to do with automobile retailers circumventing the law, going into a gray area, and creating a vehicle that in the normal consumer's mind would represent a new car, when in reality it may not be." REPRESENTATIVE LYNN asked if this had anything to do with gray market cars coming from Europe. MR. ALLWINE replied that it can, but "we have the ability under the current statute to do it within the country; we don't have to go ... other places to do it." 3:48:44 PM REPRESENTATIVE CRAWFORD commented that because of the change of the value of the U.S. dollar to the Canadian dollar, "some of that has corrected itself over the last couple of years." MR. ALLWINE responded, "That is correct but that also works the other way because this issue has come up where dealers in the southern states were marketing into Mexico." He noted that the statute still needs to be corrected, however. REPRESENTATIVE GUTTENBERG asked if there are any new car dealers that don't offer the manufacturer's warranty. MR. ALLWINE replied that if an individual buys a car through a new car dealer, the manufacturer's warranty will be on that new car because the manufacturer is required to warranty the vehicle. He continued, "There are given circumstances if you are a subsequent owner where in reality that warranty may cease to exist." REPRESENTATIVE GUTTENBERG remarked that he bought a new car this year, but the warranty was not with the same company that is the manufacturer. 3:50:57 PM MR. ALLWINE commented that this was a service contract. He explained that when an individual purchases a new vehicle from a new car dealer, the warranty is from the manufacturer. Any subsequent coverages that the individual purchases are service contract coverages. He continued, "That's part of the issue we have here; it is conceivable that you can walk into a ... retailer's lot, look at a vehicle with [2,000-3,000] miles on it that's 60 or 90 days old, and it does not have a manufacturer's warranty. But you think that that's a new vehicle." He reiterated that a new car should have a manufacturer's warranty, and if it doesn't have one, it's not a new vehicle. CHAIR ANDERSON stated that HB 203 would be held over.
| Document Name | Date/Time | Subjects |
|---|