Dealers Say New Mexico Car Disclosure Law Will Increase Prices

"Tom McParland" (tommcparland)
05/02/2014 at 11:48 • Filed to: used cars, dealerships, stealerships, regulations, articles

New Mexico is taking vehicle history reports to a whole new level. A new regulation that was set to go into effect on April 1st (now delayed until August) dictates that: every car —new, used or vintage, be sold with an inspection disclosure affidavit that shows any damage the car has ever experienced in its entire history, down to the door dings. Of course this new law is raising concerns with both dealers and car-buyers.

The law's wording not only makes it very difficult for dealerships to identify "every incident of damage," but dealers also argue that this could also have the impact of devaluing every used car car sold in the state. For example: You have two used Nissan Maxima's of similar miles, both have minor dings and wear from years of use. The New Mexico Maxima will have a detailed list of all those dings and scratches. A potential buyer will "expect" to pay less for the New Mexico car, thus local dealers will offer less for a trade. In addition this inspection process will cost the dealer money, and that cost will likely be passed onto consumers. Dealers are anticipating that used cars will be shipped out to other states where the restrictions are not as stringent.

The main catalyst behind this law was local consumer advocate attorney Rick Feferman who has sued practically every car dealership in the state.

I understand Mr. Feferman's desire to "stick it" to the stealerships, but it seems to me that this is another case of lawyers ruining it for everyone. The concept behind the legislation is a good one, namely providing a detailed inspection report of every vehicle that is sold. But I'm afraid that in practice it will only benefit attorneys and make car-buying more difficult for consumers. While vehicle history reports and existing lemon laws are not perfect, they are not artificially increasing dealer costs and decreasing trade values.

But I could be off-base here...what are your thoughts?

!!!error: Indecipherable SUB-paragraph formatting!!! is a professional car buying consultant, lover of all things automotive and a bit wagon obsessed. You can find more ramblings and plenty of carporn !!!error: Indecipherable SUB-paragraph formatting!!!

DISCUSSION (11)

FJ80WaitinForaLSV8 > Tom McParland
05/02/2014 at 11:53

This is one harebrained law. All it will do is drive up prices for consumers. Plus, how on earth is a dealer supposed to identify every incident of damage just by inspecting a vehicle? Seems impossible.

Arben72 > Tom McParland
05/02/2014 at 11:57

Most people are ignorant about their cars and when they are buying one and see it has had pdr done to it twice, they'll ask for an unreasonable amount off and waste everyone's time negotiating when they don't even know what they're negotiating for. Time is money and the dealers will "raise" prices so they can make the same amount they used to. Does this disclosure effect private sales?

365Daytonafan > Tom McParland
05/02/2014 at 11:57

Does the law apply to private sellers as well?

Tom McParland > 365Daytonafan
05/02/2014 at 11:59

I don't believe so...that would be INSANE!

Tom McParland > Arben72
05/02/2014 at 11:59

As far as I know it would not impact private sale

Meatcoma > Tom McParland
05/02/2014 at 12:04

This should at least slow down the cars being pulled traffic South on I-35.

jariten1781 > Tom McParland
05/02/2014 at 12:27

Is there a place to look at the regulation as written?

It seems unenforceable the way it's described.

Tom McParland > jariten1781
05/02/2014 at 12:31

I tried to find something on New Mexico's DMV site, but I couldn't come up with anything

jariten1781 > Tom McParland
05/02/2014 at 12:55

Found it: http://www.nmag.gov/the_office/Com…

Yeah, it's nuts. You have to report crushed pinch welds (don't use your floor jack at home or the car will be devalued in NM) and body panel gaps. There doesn't really seem to be an enforcement mechanism other than individual law suits. That means lawyers like Mr. Feferman stand to make a lot of money on this.

Tom McParland > jariten1781
05/02/2014 at 12:56

Good job digging this up!

zeontestpilot > Tom McParland
05/02/2014 at 13:02

I have mixed feelings about this. On one hand it does screw with the dealerships, so they can maybe try other tactics. On the other hand, it would be nice to know everything that as happened to a car before you buy it.