NJ CAR Compliance Forms Series: Prior Use Disclosure Form And Prior Use and Damage Disclosure Acknowledgment Form By Greyson P. Hannigan, Esq. Two of the most important and widely used forms in a dealership include the Prior Use Disclosure Form (Sample on page 37) and Prior Use and Damage Disclosure Acknowledgment Form. (Sample on page 36) These forms were developed by NJ CAR. The Prior Use Disclosure Form is used by dealers to disclose all possible prior uses of a vehicle, including use as a Company Vehicle/Factory Executive Vehicle (ex. Demonstration and Loaner vehicles), Program Vehicle/Factory Repurchase Vehicle, Rental Vehicle/Off-Lease Vehicle, and Wholesale Vehicle. If applicable, each disclosed use should be signed for by the customer. The Prior Use and Damage Disclosure Acknowledgement Form is primarily used to disclose prior uses of a vehicle and damages that have been repaired on a vehicle. It can also be used to disclose any other items that a dealer believes a customer should or would want to know when buying a vehicle. This form is basically a combination of the two disclosure forms; therefore, it can also be used to accomplish both prior use disclosures. The obligation to disclose information that could affect a customer’s decision to purchase a vehicle is derived from the New Jersey Consumer Fraud Act (CFA). Dealers often ask: what is the threshold dollar amount of damage to a vehicle that requires disclosure to a customer? This is an important question given the potential penalties for failure to disclose prior damages to a vehicle under the CFA. With its complicated requirements, imposition of strict liability, treble damages and award of attorney fees, the CFA has become a vehicle for claims against automotive dealers. Under the CFA, a seller must disclose to a buyer any “material defect” known to the seller. “Material defect” is defined as any defect that a reasonable buyer would consider important in deciding N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S I S S U E 1 | 2 0 2 2 34 new jersey auto retailer
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