Second Regular Session
Seventy-fourth General Assembly
STATE OF COLORADO
INTRODUCED
LLS NO. 24-1136.01 Jery Payne x2157
SENATE BILL 24-192
Senate Committees House Committees
Business, Labor, & Technology
A BILL FOR AN ACT
C
ONCERNING CHANGES TO THE LAW REQUIRING PERSONS IN THE101
BUSINESS OF SELLING MOTOR VEHICLES TO MAKE A CONSUMER102
WHOLE IF THE MOTOR VEHICLE FAILS TO PERFORM .103
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov
.)
Current law, which is commonly known as the "lemon law",
requires a manufacturer, a manufacturer's agent, or a manufacturer's
authorized dealer (dealer) to replace or buy back a motor vehicle if the
consumer notified the dealer within the earlier of the warranty period or
one year after original delivery of the motor vehicle (notification time),
SENATE SPONSORSHIP
Michaelson Jenet,
HOUSE SPONSORSHIP
(None),
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law. and the motor vehicle underwent a reasonable number of attempts to
repair. The number of repairs are considered reasonable if:
! The motor vehicle was out of service for repairs for a
cumulative total of 30 or more business days; or
! The dealer tried unsuccessfully to repair the motor vehicle
4 or more times.
The bill:
! Expands the lemon law to cover motor vehicles affected by
safety-based nonconformities;
! Expands the notification time to include the earlier of the
first 36,000 miles or 3 years after original delivery of the
motor vehicle;
! Clarifies that, for any claim a consumer raises against a
manufacturer, the lemon law is not an affirmative defense
against the consumer's claim when the statute of limitations
is tolled for a period of time after the consumer has
presented a claim and submitted the motor vehicle for
repair but before the threshold for cure has been met;
! Lowers the number of out-of-service business days from 30
to 21; and
! Lowers the number of required attempts to repair from 4 to
3.
Current law requires the manufacturer to be notified of a defect
and be given an opportunity to cure the defect in order to be subject to the
reasonable repairs presumption. The bill adds a 10-day limit on the
opportunity to cure the defect.
Current law allows a dealer, when buying back a motor vehicle, to
deduct a reasonable allowance for use. The bill sets a formula for
determining the reasonable allowance for use.
Current law exempts from the lemon law motor vehicles that have
a problem that does not affect the market value of the motor vehicle. The
bill adds that the problem must not affect the safety of the motor vehicle
to qualify for the exemption.
The bill changes the statute of limitations from the earlier of 6
months after the expiration of a warranty or within one year after the
original delivery of the motor vehicle to 42 months after the original
delivery.
The bill requires a dealer to allow an agent of a purchaser to
inspect a motor vehicle unless the dealer provides a 7-day free-look
period in which the purchaser may return the motor vehicle and receive
a refund of all money paid to the dealer to purchase the motor vehicle.
The dealer must notify purchasers of this inspection right. The dealer is
required to give certain notices that the motor vehicle was returned,
including notifying the department of revenue (department). The
department must put a brand on the title to notify subsequent purchasers.
SB24-192
-2- Failing to comply with the bill is a ground for discipline for a
manufacturer, distributor, motor vehicle dealer, wholesale motor vehicle
auction dealer, wholesaler, buyer agent, used motor vehicle dealer
licensee, motor vehicle salesperson, or business disposal licensee.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, 42-10-101, amend2
the introductory portion, (1), and (2); and add (2.5) as follows:3
42-10-101. Definitions. As used in this article
ARTICLE 10, unless4
the context otherwise requires:5
(1) "Consumer" means the purchaser, other than for purposes of6
resale, of a motor vehicle normally THAT IS BOUGHT OR used for personal,7
family, or household purposes; any person to whom such THE motor8
vehicle is transferred for the same purposes during the duration of a9
manufacturer's express warranty for such THE motor vehicle; and any10
other person entitled by the terms of such THE warranty to enforce the11
obligations of the warranty.12
(2) "Motor vehicle" means a self-propelled private passenger13
vehicle, including
MOTORCYCLES AS DEFINED IN SECTION 42-1-102 (55),14
pickup trucks, and vans, designed primarily for travel on the public15
highways and used to carry not more than ten persons, which is sold to a16
consumer in this state; except that the term does not include motor homes17
as defined in section 42-1-102 (57) or vehicles designed to travel on three
18
or fewer wheels in contact with the ground A MOTOR VEHICLE THAT HAS19
BEEN MODIFIED FOR COMMERCIAL USE .20
(2.5) "S
AFETY-BASED NONCONFORMITY " MEANS A21
LIFE-THREATENING NONCONFORMITY THAT :22
(a) I
MPEDES THE CONSUMER'S ABILITY TO CONTROL OR OPERATE23 SB24-192-3- THE MOTOR VEHICLE FOR ORDINARY USE OR REASONABLY INTENDED1
PURPOSES;2
(b) C
REATES A RISK OF FIRE OR EXPLOSION; OR3
(c) R
EQUIRES A STOP-SALE DIRECTIVE UNDER SECTION 44-20-141.4
SECTION 2. In Colorado Revised Statutes, amend 42-10-102 as5
follows:6
42-10-102. Repairs to conform vehicle to warranty. (1) If a7
motor vehicle
HAS A SAFETY-BASED NONCONFORMITY OR does not8
conform to a warranty and the consumer reports the nonconformity to the9
manufacturer, its
THE MANUFACTURER 'S agent, or its THE10
MANUFACTURER'S authorized dealer during the term of such warranty or11
during a period of one year WITHIN THE FIRST THIRTY-SIX THOUSAND12
MILES OF THE MOTOR VEHICLE 'S OPERATION OR WITHIN THREE YEARS13
following the date of the original delivery of the motor vehicle to a14
consumer, whichever is the OCCURS earlier, date, the manufacturer, its15
THE MANUFACTURER 'S agent, or its THE MANUFACTURER 'S authorized16
dealer shall make such repairs as are necessary to conform the
MOTOR17
vehicle to such
THE warranty, notwithstanding the fact that such THE18
repairs are made after the expiration of such term or such one-year THE19
period.20
(2) T
HIS SECTION IS NOT AN AFFIRMATIVE DEFENSE AGAINST A21
CONSUMER'S CLAIM WHEN THE STATUTE OF LIMITATIONS IS TOLLED FOR A22
PERIOD OF TIME AFTER THE CONSUMER HAS PRESENTED A CLAIM AND23
SUBMITTED THE MOTOR VEHICLE FOR REPAIR BUT BEFORE THE THRESHOLD24
FOR CURE HAS BEEN MET.25
SECTION 3. In Colorado Revised Statutes, 42-10-103, amend26
(1), (2)(a), (2)(b), and (2)(c); and add (4) as follows:27
SB24-192
-4- 42-10-103. Failure to conform vehicle to warranty -1
replacement or return of vehicle. (1) If the manufacturer, its THE2
MANUFACTURER'S agent, or its THE MANUFACTURER'S authorized dealer3
is unable to conform the motor vehicle to the warranty by repairing or4
correcting the defect or condition which THAT substantially impairs the5
use and market value of such OR SAFETY OF THE motor vehicle after a6
reasonable number of attempts, the manufacturer shall, at its THE7
MANUFACTURER'S option, replace the motor vehicle with a comparable8
motor vehicle or accept return of the motor vehicle from the consumer9
and refund to the consumer the full purchase price, including the sales10
tax, license fees, and registration fees and any similar governmental11
charges, less a reasonable allowance for the consumer's use of the motor12
vehicle. Refunds shall be made to the consumer and lienholder, if any, as13
their interests may appear. A reasonable allowance for use shall be IS that14
amount directly attributable to use by the consumer and any previous15
consumer prior to the consumer's first written report of the nonconformity16
to the manufacturer, agent, or dealer and during any subsequent period17
when the
MOTOR vehicle is not out of service by reason of repair.18
(2) (a) It shall be presumed that
A reasonable number of attempts19
IS PRESUMED TO have been undertaken to conform a motor vehicle to the20
warranty if:21
(I) The same A nonconformity has been subject to repair four22
THREE or more times by the manufacturer, its THE MANUFACTURER 'S23
agent, or its THE MANUFACTURER'S authorized dealer within the warranty24
term or during a period of one year THE FIRST THIRTY-SIX THOUSAND25
MILES OR WITHIN THREE YEARS following the date of the original delivery26
of the motor vehicle to the consumer, whichever is the OCCURS earlier,27
SB24-192
-5- date, but such THE nonconformity continues to exist; or1
(II) The motor vehicle is out of service by reason of repair for a2
cumulative total of thirty TWENTY-ONE or more business days of the3
repairer during the term MILEAGE specified in subparagraph (I) of this4
paragraph (a) SUBSECTION (2)(a)(I) OF THIS SECTION or during the TIME5
period specified in said subparagraph (I) SUBSECTION (2)(a)(I) OF THIS6
SECTION, whichever is the OCCURS earlier; date. OR7
(III) A
SAFETY-BASED NONCONFORMITY HAS BEEN SUBJECT TO8
TWO OR MORE REPAIR ATTEMPTS BY THE MANUFACTURER , THE9
MANUFACTURER'S AGENT, OR THE MANUFACTURER'S AUTHORIZED DEALER10
WITHIN THE FIRST THIRTY-SIX THOUSAND MILES OF OPERATION OR WITHIN11
THREE YEARS FOLLOWING THE DATE OF THE ORIGINAL DELIVERY OF THE12
MOTOR VEHICLE TO THE CONSUMER , WHICHEVER OCCURS EARLIER , BUT13
THE SAFETY-BASED NONCONFORMITY CONTINUES TO EXIST .14
(b) For the purposes of this subsection (2), the term of a warranty,15
the one-year
THREE-YEAR period, and the thirty-day TWENTY-ONE-DAY16
period shall be IS extended by any period of time during which repair17
services are not available to the consumer because of war, invasion,18
strike, or fire, flood, or other natural disaster.19
(c) In no event shall A presumption under paragraph (a) of this20
subsection (2) SUBSECTION (2)(a) OF THIS SECTION DOES NOT apply21
against a manufacturer unless the manufacturer has received prior written22
notification by certified mail from or on behalf of the consumer and has23
been provided an opportunity to cure the
ALLEGED defect alleged. Such
24
WITHIN TEN DAYS AFTER RECEIPT OF THE NOTIFICATION . THE defect shall25
count COUNTS as one nonconformity subject to repair under subparagraph26
(I) of paragraph (a) of this subsection (2) SUBSECTION (2)(a)(I) OF THIS27
SB24-192
-6- SECTION.1
(4) A
REASONABLE ALLOWANCE FOR USE , AS DESCRIBED IN2
SUBSECTION (1) OF THIS SECTION, MUST BE OBTAINED BY MULTIPLYING3
THE TOTAL CONTRACT PRICE OR LESSEE COST OF THE MOTOR VEHICLE BY4
A FRACTION HAVING AS ITS DENOMINATOR ONE HUNDRED THOUSAND AND5
HAVING AS THE FRACTION'S NUMERATOR THE SUM OF:6
(a) T
HE NUMBER OF MILES THAT THE MOTOR VEHICLE TRAVELED7
BEFORE THE CONSUMER'S FIRST REPORT OF THE NONCONFORMITY TO THE8
MANUFACTURER, THE MANUFACTURER'S AGENT, OR THE MANUFACTURER'S9
DEALER OR LESSOR; AND10
(b) T
HE NUMBER OF MILES THAT THE MOTOR VEHICLE TRAVELED11
DURING ANY SUBSEQUENT PERIOD WHEN THE MOTOR VEHICLE WAS NOT12
OUT OF SERVICE BY REASON OF REPAIR.13
SECTION 4. In Colorado Revised Statutes, 42-10-104, amend14
(1) introductory portion and (1)(a) as follows:15
42-10-104. Affirmative defenses. (1) It shall be
IS an affirmative16
defense to any claim under this article ARTICLE 10 that:17
(a) An alleged nonconformity does not substantially impair the18
SAFETY OF OR use and market value of a motor vehicle; or19
SECTION 5. In Colorado Revised Statutes, amend 42-10-107 as20
follows:21
42-10-107. Statute of limitations. Any action brought to enforce22
the provisions of this article shall
THIS ARTICLE 10 MUST be commenced23
within six months following the expiration date of any warranty term or24
within one year FORTY-TWO MONTHS following the date of the original25
delivery of a motor vehicle to a consumer; whichever is the earlier date;26
except that the statute of limitations shall be IS tolled during the period27
SB24-192
-7- the consumer has submitted to arbitration under section 42-10-106.1
SECTION 6. In Colorado Revised Statutes, add 42-10-108 and2
42-10-109 as follows:3
42-10-108. Third-party inspection - disclosure. (1) I
F A MOTOR4
VEHICLE IS RETURNED PURSUANT TO SECTION 42-10-103 (1), THE5
MANUFACTURER, THE MANUFACTURER'S AGENT, OR THE MANUFACTURER'S6
AUTHORIZED DEALER SHALL ALLOW A THIRD -PARTY AGENT OF A7
POTENTIAL PURCHASER TO INSPECT A MOTOR VEHICLE BEFORE SELLING8
THE MOTOR VEHICLE UNLESS THE MANUFACTURER , THE MANUFACTURER'S9
AGENT, OR THE MANUFACTURER 'S AUTHORIZED DEALER PROVIDES A10
SEVEN-DAY FREE-LOOK PERIOD IN WHICH THE PURCHASER MAY RETURN11
THE MOTOR VEHICLE AND RECEIVE A REFUND OF ALL MONEY PAID TO12
PURCHASE THE MOTOR VEHICLE .13
(2) I
F THE MOTOR VEHICLE IS RETURNED PURSUANT TO SECTION14
42-10-103
(1), THE MANUFACTURER, THE MANUFACTURER'S AGENT, OR15
THE MANUFACTURER'S AUTHORIZED DEALER SHALL DISCLOSE, BEFORE THE16
MOTOR VEHICLE IS PURCHASED, TO EACH POTENTIAL PURCHASER OF THE17
MOTOR VEHICLE THE RIGHT DESCRIBED IN SUBSECTION (1) OF THIS18
SECTION.19
42-10-109. Buy back notice. (1) I
F THE MOTOR VEHICLE IS20
RETURNED PURSUANT TO SECTION 42-10-103 (1), A MANUFACTURER, A21
MANUFACTURER'S AGENT, OR A MANUFACTURER'S AUTHORIZED DEALER22
SHALL:23
(a) N
OTIFY A POTENTIAL PURCHASER THAT THE MOTOR VEHICLE24
WAS RETURNED TO THE MANUFACTURER , THE MANUFACTURER'S AGENT,25
OR THE MANUFACTURER 'S AUTHORIZED DEALER PURSUANT TO SECTION26
42-10-103
(1);27
SB24-192
-8- (b) NOTIFY THE DEPARTMENT OF REVENUE THAT THE MOTOR1
VEHICLE WAS RETURNED TO THE MANUFACTURER , THE MANUFACTURER'S2
AGENT, OR THE MANUFACTURER 'S AUTHORIZED DEALER PURSUANT TO3
SECTION 42-10-103 (1);4
(c) A
TTACH A DECAL TO THE MOTOR VEHICLE THAT READS5
"L
EMON LAW BUYBACK AND REPAIR" IN A CLEAR AND CONSPICUOUS OR6
EASILY VISIBLE LOCATION ON THE DATE THE MOTOR VEHICLE IS RETURNED7
AND SHALL NOT REMOVE THE DECAL UNTIL THE MOTOR VEHICLE IS SOLD ;8
AND9
(d) A
PPLY FOR A CERTIFICATE OF TITLE PURSUANT TO ARTICLE 610
OF THIS TITLE 42 IN THE MANUFACTURER 'S, THE MANUFACTURER 'S11
AGENT'S, OR THE MANUFACTURER'S AUTHORIZED DEALER'S NAME.12
SECTION 7. In Colorado Revised Statutes, 42-6-102, amend13
(1.7)(e) and (1.7)(f); and add (1.7)(g) as follows:14
42-6-102. Definitions. As used in this part 1, unless the context15
otherwise requires:16
(1.7) "Brand" means a permanent designation or marking on a17
motor vehicle's title, associated with the vehicle identification number,18
that conveys information about the value of the vehicle or indicates that19
the vehicle:20
(e) Has had its odometer tampered with; or
21
(f) Has a designation placed on the title by another jurisdiction;
OR22
(g) H
AS BEEN RETURNED TO THE MANUFACTURER , THE23
MANUFACTURER'S AGENT, OR THE MANUFACTURER'S AUTHORIZED DEALER24
PURSUANT TO SECTION 42-10-103 (1).25
SECTION 8. In Colorado Revised Statutes, 42-6-107, amend26
(1)(a)(III) as follows:27
SB24-192
-9- 42-6-107. Certificates of title - contents - rules. (1) (a) (III) If1
a vehicle shows a brand in its THE VEHICLE'S title history, or if the vehicle2
is subject to a brand, the department shall place the appropriate brand on3
the certificate of title. If the vehicle has multiple brands, the department4
shall place the most recent brand on the certificate of title and the notice5
"other brands exist". If the brand is from a certificate of title issued in6
another jurisdiction, the brand must be carried forward to the Colorado7
certificate of title along with the name of the jurisdiction originating the8
brand. I
F A MOTOR VEHICLE IS RETURNED PURSUANT TO SECTION9
42-10-103
(1), THE APPROPRIATE BRAND IS "LEMON LAW BUYBACK AND10
R
EPAIR".11
SECTION 9. In Colorado Revised Statutes, 44-20-121, add12
(1)(d), (3)(t), (6)(q), and (6.5)(q) as follows:13
44-20-121. Licenses - grounds for denial, suspension, or14
revocation. (1) A manufacturer's or distributor's license may be denied,15
suspended, or revoked on the following grounds:16
(d) F
AILING TO COMPLY WITH ARTICLE 10 OF TITLE 42.17
(3) A motor vehicle dealer's, wholesale motor vehicle auction18
dealer's, wholesaler's, buyer agent's, or used motor vehicle dealer's license19
may be denied, suspended, or revoked on the following grounds:20
(t) F
AILING TO COMPLY WITH ARTICLE 10 OF TITLE 42.21
(6) The license of a motor vehicle salesperson may be denied,22
revoked, or suspended on the following grounds:23
(q) F
AILING TO COMPLY WITH ARTICLE 10 OF TITLE 42.24
(6.5) A business disposal license may be denied, suspended, or25
revoked on the following grounds:26
(q) F
AILING TO COMPLY WITH ARTICLE 10 OF TITLE 42.27
SB24-192
-10- SECTION 10. Act subject to petition - effective date -1
applicability. (1) This act takes effect at 12:01 a.m. on the day following2
the expiration of the ninety-day period after final adjournment of the3
general assembly; except that, if a referendum petition is filed pursuant4
to section 1 (3) of article V of the state constitution against this act or an5
item, section, or part of this act within such period, then the act, item,6
section, or part will not take effect unless approved by the people at the7
general election to be held in November 2024 and, in such case, will take8
effect on the date of the official declaration of the vote thereon by the9
governor.10
(2) This act applies to motor vehicles sold or leased on or after the11
applicable effective date of this act.12
SB24-192
-11-