August 17, 2015
To the Honorable Members of
The Illinois House of Representatives,
99th General Assembly:
Today I veto
House Bill 3746 from the 99th General Assembly, which would impose new and
unnecessary burdens on used car dealers, single out only some dealers in the
market, and drive up the cost of used cars in Illinois.
Since at
least 1968, the Consumer Fraud and Deceptive Business Practices Act has
established certain standards to protect car buyers from “lemon” purchases. The
Act, which applies to both new car dealers and used car dealers, assigns
liability to the dealer for repairs to defective engine and other power train components
within the first 30 days after the sale. The Act also permits a dealer to sell
a car as-is, without warranty, as long as the dealer conspicuously informs the
seller prior to and at the time of sale.
House Bill
3746 would require every used car dealer – but not new car dealers that sell
used cars or private sellers – to provide a warranty of merchantability for 15
days or 500 miles. The required warranty is not limited to power train
components, but applies to any defect that could limit its use “for the ordinary
purpose of transportation on any public highway.” This requirement is both
overly-broad and ambiguous.
A significant
proportion of used car sales in Illinois are as-is. Many used car dealers do
not provide warranties for all or a portion of their sales, while others may
offer service contracts instead of dealer warranties. Requiring warranties, therefore,
would necessarily increase the cost of used cars, hurting low-income
Illinoisans the most.
Even if the
requirements of House Bill 3746 were good policy, the bill singles out only
used car dealers, exempting new car dealers that sell used cars. As noted
above, the current Consumer Fraud and Deceptive Business Practices Act applies
to both used car dealers and new car dealers. But this bill would apply only to
used car dealers, even though new car dealers sell a large portion of used
cars.
Protecting
consumers from fraudulent practices and defective goods is important. But this
bill would discriminately impose a significant mandate on an important industry
without having first established a compelling need. We must end the cycle of
regulation and taxation that hurts our economy, suppresses job creation, and
costs the State valuable revenues.
Therefore,
pursuant to Section 9(b) of Article IV of the Illinois Constitution of 1970, I
hereby return House Bill 3746, entitled “AN ACT concerning motor vehicles”,
with the foregoing objections, vetoed in its entirety.
Sincerely,
Bruce Rauner
GOVERNOR