Regulates pay-off of trade-in vehicles and certain vehicle title releases.
The introduction of S1197 could significantly streamline the trade-in process, enhancing consumer protection by ensuring that outstanding loans are settled promptly. This may lead to increased buyer confidence as consumers will have assurance that their previous liens are addressed, potentially reducing the risk of financial repercussions if a vehicle is sold without settling the existing security interests. The bill also stipulates strict timeframes within which secured parties must respond to payments, thereby introducing more accountability into these transactions.
Senate Bill S1197 aims to regulate the procedures surrounding the trade-in of used motor vehicles, specifically focusing on the payment of outstanding loans on trade-ins and the timely release of vehicle titles. This bill mandates that motor vehicle dealers remit the remaining loan balance to secured parties within 15 days of accepting a vehicle as a trade-in. Additionally, dealers are required to provide proof of payment to customers upon request. Violations of these provisions can lead to penalties of up to $1,000 for first offenses and up to $2,000 for subsequent violations.
Concerns may arise regarding the practicality of enforcing the timeframes set forth in S1197, particularly in cases where dealers or secured parties face delays due to banking processes or erroneous information that complicates title transfer. Moreover, the financial penalties imposed for non-compliance might be viewed as excessive by some stakeholders, including small dealerships that could struggle to meet these requirements under unprecedented circumstances. Therefore, ongoing discussions may center around amending provisions to protect against unintended consequences affecting the local automotive industry.