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Under a change to the Consumer Fraud and Deceptive Business Practices Act that takes effect July 1, 2017, all sales agreements for used cars are voidable unless they include the following language: “Illinois law requires that this vehicle will be free of a defect in a power train component for 15 days or 500 miles after delivery, whichever is earlier, except with regard to particular defects disclosed on the first page of this agreement. ‘Power train component’ means the engine block, head, all internal engine parts, oil pan and gaskets, water pump, intake manifold, transmission, and all internal transmission parts, torque converter, drive shaft, universal joints, rear axle and all rear axle internal parts, and rear wheel bearings. You (the consumer) will have to pay up to $100 for each of the first 2 repairs if the warranty is violated.” This slipped through the cracks at our bank, and we will not have contracts with this updated language for two weeks. How should we address this in our sales agreements until the new contracts arrive? – IBA Compliance Connection

IBA Compliance Connection

Your go to source for compliance!

Under a change to the Consumer Fraud and Deceptive Business Practices Act that takes effect July 1, 2017, all sales agreements for used cars are voidable unless they include the following language: “Illinois law requires that this vehicle will be free of a defect in a power train component for 15 days or 500 miles after delivery, whichever is earlier, except with regard to particular defects disclosed on the first page of this agreement. ‘Power train component’ means the engine block, head, all internal engine parts, oil pan and gaskets, water pump, intake manifold, transmission, and all internal transmission parts, torque converter, drive shaft, universal joints, rear axle and all rear axle internal parts, and rear wheel bearings. You (the consumer) will have to pay up to $100 for each of the first 2 repairs if the warranty is violated.” This slipped through the cracks at our bank, and we will not have contracts with this updated language for two weeks. How should we address this in our sales agreements until the new contracts arrive?

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While we cannot provide legal advice, we think that adding a simple addendum to your current contract which includes this new language should suffice. 

For resources related to our guidance, please see:

  • Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/2L: An agreement for the sale of a used motor vehicle subject to this Section is voidable at the option of the consumer, unless it contains on its face the following conspicuous statement printed in boldface 10-point or larger type set off from the body of the agreement:

Illinois law requires that this vehicle will be free of a defect in a power train component for 15 days or 500 miles after delivery, whichever is earlier, except with regard to particular defects disclosed on the first page of this agreement. 'Power train component' means the engine block, head, all internal engine parts, oil pan and gaskets, water pump, intake manifold, transmission, and all internal transmission parts, torque converter, drive shaft, universal joints, rear axle and all rear axle internal parts, and rear wheel bearings. You (the consumer) will have to pay up to $100 for each of the first 2 repairs if the warranty is violated.