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92_SB1851eng SB1851 Engrossed LRB9215626DHmg 1 AN ACT in relation to business transactions. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Motor Vehicle Franchise Act is amended by 5 changing Section 5 as follows: 6 (815 ILCS 710/5) (from Ch. 121 1/2, par. 755) 7 Sec. 5. Delivery and preparation obligations; damage 8 disclosures. Every manufacturer shall specify in writing to 9 the dealer the delivery and preparation obligations of its 10 motor vehicle dealers prior to delivery of new motor vehicles 11 to retail buyers. A copy of the delivery and preparation 12 obligations of its motor vehicle dealers and a schedule of 13 the compensation to be paid to its motor vehicle dealers for 14 the work and services they shall be required to perform in 15 connection with such delivery and preparation obligations 16 shall be presented to the dealer and the obligations 17 specified therein shall constitute any such dealer's only 18 predelivery obligations as between such dealer and such 19 manufacturer. The compensation as set forth on said schedule 20 shall be reasonable. 21 A manufacturer, factory branch, distributor, distributor 22 branch, or wholesaler of new motor vehicles sold or 23 transferred to a motor vehicle dealer in this State shall 24 disclose to the motor vehicle dealer, in writing, before 25 delivery of a vehicle to the motor vehicle dealer all 26 in-transit, post-manufacture, or other damage to the vehicle 27 that was sustained or incurred by the motor vehicle at any 28 time after the manufacturing process was complete but before 29 delivery of the vehicle to the dealer. This disclosure is 30 not required when the cost to repair does not exceed 6% of 31 the manufacturer's suggested retail price of the vehicle SB1851 Engrossed -2- LRB9215626DHmg 1 based upon the dealer's actual retail repair cost, including 2 labor, parts, and materials if the damage is repaired or 3 retail estimate to repair if the vehicle is not repaired. New 4 motor vehicles that are repaired may be sold as new and shall 5 be fully warranted by the manufacturer. 6 For purposes of this Section, "manufacturer's suggested 7 retail price" means the retail price of the new motor vehicle 8 suggested by the manufacturer including the retail delivered 9 price suggested by the manufacturer for each separately 10 priced accessory or item of optional equipment physically 11 attached to the new motor vehicle at the time of delivery. 12 Whenever a new motor vehicle sustains or incurs any 13 in-transit, post-manufacture, or other damage at any time 14 after the manufacturing process is complete, but before 15 delivery of the vehicle to the motor vehicle dealer, the 16 dealer may within a reasonable period of time after delivery 17 of the motor vehicle notify the manufacturer or distributor 18 of that damage and either: 19 (1) revoke acceptance of the delivery of the new 20 motor vehicle whereby ownership of the motor vehicle 21 shall revert to the manufacturer, and the dealer shall 22 incur no obligations, financial, or otherwise for that 23 new motor vehicle; or 24 (2) request authorization from the manufacturer to 25 repair the damage sustained or incurred by the new motor 26 vehicle. If the manufacturer refuses or fails to 27 authorize repair of the damage within 3 days of the 28 request by the dealer, the dealer may then revoke 29 acceptance of the delivery of the new motor vehicle; 30 ownership shall revert to the manufacturer; and the 31 dealer shall incur no obligations, financial, or 32 otherwise for that new motor vehicle. 33 A motor vehicle dealer shall disclose to the purchaser 34 before delivery of the new motor vehicle, in writing, any SB1851 Engrossed -3- LRB9215626DHmg 1 damage that the dealer has actual knowledge was sustained or 2 incurred by the motor vehicle at any time after the 3 manufacturing process was complete but before delivery of the 4 vehicle to the purchaser. This disclosure is not required 5 when the cost to repair does not exceed 6% of the 6 manufacturer's suggested retail price of the vehicle based 7 upon the dealer's actual retail repair cost, including labor, 8 parts, and materials if the damage is repaired or the retail 9 estimate to repair the vehicle if it is not repaired. 10 Damage to glass, tires, bumpers, video and telephonic 11 components, and in-dash audio equipment is not to be 12 considered in determining the cost of repair if replaced with 13 the manufacturer's original equipment. 14 If disclosure is not required under this Section, a 15 purchaser may not revoke or rescind a sales contract due to 16 the fact the new vehicle was damaged and repaired before 17 completion of the sale. In that circumstance, nondisclosure 18 does not constitute a misrepresentation or omission of fact. 19 A manufacturer, factory branch, distributor, distributor 20 branch, or wholesaler of new motor vehicles shall, 21 notwithstanding the terms of any franchise agreement, 22 indemnify and hold harmless the motor vehicle dealer 23 obtaining a new motor vehicle from the manufacturer, factory 24 branch, distributor, distributor branch, or wholesaler from 25 and against any liability, including reasonable attorney's 26 fees, expert witness fees, court costs, and other expenses 27 incurred in the litigation, so long as such fees and costs 28 are reasonable, that the motor vehicle dealer may be 29 subjected to by the purchaser of the vehicle because of 30 damage to the motor vehicle that occurred before delivery of 31 the vehicle to the dealer and that was not disclosed in 32 writing to the dealer prior to delivery of the vehicle. This 33 indemnity obligation of the manufacturer, factory branch, 34 distributor, distributor branch, or wholesaler applies SB1851 Engrossed -4- LRB9215626DHmg 1 regardless of whether the damage falls below the 6% threshold 2 under this Section. The failure of the manufacturer, factory 3 branch, distributor, distributor branch, or wholesaler to 4 indemnify and hold harmless the motor vehicle dealer is a 5 violation of this Section. 6 (Source: P.A. 91-485, eff. 1-1-00.)