A motor vehicle dealer shall disclose to the purchaser before delivery of
the new motor vehicle, in writing, any damage that the dealer has actual
knowledge was sustained or incurred by the motor vehicle at any time after the
manufacturing process was complete but before delivery of the vehicle to the
purchaser. This disclosure is not required when the cost to repair does not
exceed 6% of the manufacturer's suggested retail price of the vehicle based
upon the dealer's actual retail repair cost, including labor, parts, and
materials if the damage is repaired or the retail estimate to repair the
vehicle if it is not repaired.
Damage to glass, tires, bumpers,
video and telephonic components,
and in-dash audio equipment is not to
be considered in determining the cost of repair if replaced with the
manufacturer's original equipment.
If disclosure is not required under this Section, a purchaser may not revoke
or rescind a sales contract due to the fact the new vehicle was damaged and
repaired before completion of the sale. In that circumstance, nondisclosure
does not constitute a misrepresentation or omission of fact.
A manufacturer, factory branch, distributor, distributor branch, or
wholesaler of new motor vehicles shall, notwithstanding the terms of any
franchise agreement, indemnify and hold harmless the motor vehicle dealer
obtaining a new motor vehicle from the manufacturer, factory branch,
distributor, distributor branch, or wholesaler from and against any liability,
including reasonable attorney's fees,
expert witness fees, court costs, and other expenses incurred in the
litigation, so long as such fees and costs are reasonable,
that the motor vehicle dealer may be
subjected to by the purchaser of the vehicle because of damage to the motor
vehicle that occurred before delivery of the vehicle to the dealer and that was
not disclosed in writing to the dealer prior to delivery of the vehicle. This
indemnity obligation of the manufacturer, factory branch, distributor,
distributor branch, or wholesaler applies regardless of whether the damage
falls below the 6% threshold under this Section. The failure of the
manufacturer, factory branch, distributor, distributor branch, or wholesaler to
indemnify and hold harmless the motor vehicle dealer is a violation of this
Section.
(Source: P.A. 91-485, eff. 1-1-00; 92-758, eff. 1-1-03.)
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