Industry Insight: Warranty Notice Now Required for N.J. Dealers
New Jersey dealers of new vehicles are now required to display information about the Magnuson-Moss Warranty Act. A bill that requires this disclosure took effect in early January after years of legislative efforts.
The Act is a federal law that prevents OEMs from voiding warranties when repairs are done with aftermarket parts, such as oil filters. The state-level disclosure efforts are led by the Automotive Oil Change Association.
The New Jersey law says that within 90 days of a new car purchase, the dealer or OEM must mail to the owner a disclosure about the MMWA.
Work on this bill started around 2016 with an AOCA-led survey on warranty knowledge. The survey found that a vast majority of New Jersey drivers didn't know about the Warranty Act. It also found that dealers were the main culprit in telling customers that quick lube service could void warranties.
Jay Rosenthal, AOCA member and vice president of New Jersey Lubrication, presented the survey's findings to a state assembly committee in 2017.
"[We surveyed] customers who had been told they were required to use OEM parts and/or services to maintain warranty coverage," Rosenthal said, according to a press release. "This isn't easy information to obtain, because many people are afraid to risk calling out a powerful company on bad behavior. Within a mere month, however, fifty-eight customers came forward to tell their stories. 91 percent of respondents did not know about their MMWA rights before they took the survey. Sixty-five percent of them were told by an automobile dealership employee that they were required to use OEM parts and/or service to maintain warranty coverage."
Gov. Phil Murphy signed the bill in early January 2020. The Auto Care Association was one organization that praised the bill's passage.
“Gaining the right to repair your vehicle at the facility of your choosing without voiding the vehicle warranty was only half the battle in protecting consumer choice,” said Bill Hanvey, president and CEO of the Auto Care Association, in a release. “The Auto Care Association and our allies are dedicated to consumer choice and we are fighting to ensure that the federal rights of consumers are not only acknowledged by the states, but actively protected and defended by them too.”
Joanna Johnson, AOCA's policy director, said that Connecticut has a similar law in place. In California, the aftermarket organization CAWA is working with state departments to spread information about warranty rights.
The AOCA in 2019 submitted comments to the Federal Trade Commission as part of a national-level lobbying effort to enforce Warranty Act provisions.
As part of its submitted research, the AOCA commented on how telematics systems like oil life monitors can be used to alert customers to needed service and divert them to dealers before an independent shop has the chance at that business.
One example from a Toyota Rav 4's dash display simply says "visit your dealer." Another, from a 2019 Mazda 3, says "have the vehicle serviced by your dealer." The AOCA noted that neither example came from a vehicle under a dealer's free maintenance plan.
"Both use imperative tone, aka command form, which is an order, not a suggestion or recommendation, and therefore unacceptable," the AOCA says.
The AOCA argues that this violates the "tie-in sales" provision of the Magnuson-Moss Warranty Act. The law says that manufacturers can't require the use of their branded parts at the customer's expense in order to keep a warranty. The AOCA presented similar examples from various owner's manuals.
The idea is that drivers might think that their only option is to visit the dealership for something like an oil change. The issue ties into a lot of other legislative topics, including the Right to Repair movement. The Auto Care Association weighed in with a submission of its own on the topic.
Editor's note: This article was adapted from two original NOLN stories:
- AOCA: OEM Maintenance Language Violates Warranty Act
- Magnuson-Moss Warranty Disclosure Now Required for N.J. Dealers