01
October
2024

Pennsylvania Automotive Industry Trade Practices Regulation takes Effect on August 19, 2024

This final-form regulation is intended to improve, enhance, and update the unfair or deceptive acts or practices regulations governing the automotive industry.

Pennsylvania Automotive Industry Trade Practices Regulation takes Effect on August 19, 2024

In April of 2023, the Pennsylvania Office of Attorney General (OAG) proposed a regulation entitled: “Automotive Industry Trade Practices,” which sought to improve, enhance, and update the unfair or deceptive acts or practices regulations. After a public comment period, the OAG revised their proposed regulation and came back to the public with a “Final-form Regulation” on March 19, 2024. The automotive industry, members of the public and state legislative committees of authority provided comments to the OAG and the Independent Regulatory Review Commission (IRRC) during the proposed and final stages of the regulatory process.

On May 16, 2024, the IRRC approved the final-form regulation “Automotive Industry Trade Practices,” which became final when it was published1 in the Pennsylvania Bulletin on July 20, 2024. This finalform regulation took effect 30-days after publication or August 19, 2024.

Unfortunately, there has been a great deal of confusion surrounding this regulation due to inaccurate or “click bait” advertisements on the internet and posts on social media claiming that Pennsylvania is ending annual vehicle inspections on January 1, 2025. FOX 43 News in the state Capital was asked to verify this claim and debunked it on August 13, 2024, on air and on its website: “No, Pennsylvania state vehicle inspections are not stopping in 2025 | VERIFY.2 Specifically, FOX 43 found that: “There is currently no legislation in the Pennsylvania House or Senate which would end annual vehicle inspection requirements. There has also been no bill signed into law.”3

So, what does the OAG’s Automotive Industry Trade Practices Regulation do? The short summary is that it creates Section 301.2(5.1) (relating to advertising and sales presentation requirements), which directs that a motor vehicle dealer may not advertise or offer a motor vehicle for sale unless the selling motor vehicle dealer to designates a certified inspection mechanic to inspect a motor vehicle not more than 30 days after it enters the motor vehicle dealer’s inventory for all conditions listed in Section 301.2(5). Thereafter, if the motor vehicle accumulates five hundred miles or more while in the inventory of the selling motor vehicle dealer, the dealer must inspect the motor vehicle for the conditions listed in Section 301.2(5) not more than 30 days prior to sale, excluding the ability of the vehicle to pass a State inspection.

As a threshold matter, OAG notes that it intends that the rulemaking use the term “inspect” in its ordinary meaning (i.e., to take a careful look) and not, in itself, to refer to a PennDOT safety inspection.

In addition, this section does not apply to sales of motor vehicles between two motor vehicle dealers, the sales of motor vehicles pursuant to a duly authorized vehicle auction license, the sales of salvaged or nonrepairable motor vehicles bearing the applicable certificate, or the sales of motor vehicles which are located outside the Commonwealth of Pennsylvania during the entire time it is advertised or offered for sale.

Detailed Summary of the Automotive Trade Practices Regulation

First, Section 301.14 (definitions) includes electronic means in the definition of “advertisement.”

Second, Section 301.2(5)5 (relating to written disclosures) is amended to require that the disclosure of the enumerated conditions be provided in writing.

Third, Section 301.2(5.1) (relating to advertising and sales presentation requirements) is created, it directs that a motor vehicle dealer may not advertise or offer a motor vehicle for sale unless the selling motor vehicle dealer designates a certified inspection mechanic to inspect a motor vehicle not more than 30 days after it enters the motor vehicle dealer’s inventory for all conditions listed in 37 Pa. Code Section 301.2(5). NOTE: As a threshold matter, OAG notes that it intends that the rulemaking use the term “inspect” in its ordinary meaning (i.e., to take a careful look) and not, in itself, to refer to a PennDOT safety inspection.

§ 301.2. Advertising and sales presentation requirements.

(5) The representation in an advertisement or sales presentation that a motor vehicle or motor vehicle goods or services are of a particular style, model, standard, quality or grade if they are of another or if the representation conflicts with a written notice or disclosure required under this chapter. For the purposes of this chapter, a motor vehicle which is offered for sale is represented to be roadworthy, and the advertiser or seller shall disclose prior to sale the following conditions if the advertiser or seller knows or should know that the conditions exist in the motor vehicle:

  1. Frame bent, cracked or twisted.
  2. Engine block or head cracked.
  3. Vehicle unable to pass State inspection.
  4. Transmission damaged, defective or so deteriorated as to require replacement.
  5. Vehicle flood damaged.
  6. Differential damaged, defective or so deteriorated as to require replacement.

Thereafter, if the motor vehicle accumulates five hundred miles while in the inventory of the selling motor vehicle dealer, the dealer must inspect the motor vehicle for the conditions listed in Section 301.2(5), excluding the ability of the vehicle to pass a State inspection. This section does not apply to sales of motor vehicles between two motor vehicle dealers, the sales of motor vehicles pursuant to a duly authorized vehicle auction license, the sales of salvaged or nonrepairable motor vehicles bearing the applicable certificate, or the sales of motor vehicles which are located outside the Commonwealth of PA during the entire time it is advertised or offered for sale.

Finally, Section 301.4(9.1)6 Relating to general provisions – motor vehicle dealer) clarifies that compliance with section 301.2(5) (relating to written disclosure) is still required notwithstanding any use of the term, AS IS, under section 301.4(9) (relating to disclaiming warranty). The selling motor vehicle dealer must describe the vehicle as being sold “AS-IS,” and list in writing any conditions listed in Section 301.2(5).

§ 301.4. General provisions—motor vehicle dealer.

(9) Where no express warranty is given, attempting to exclude the implied warranties of merchantability and fitness for a particular purpose in the sale of a motor vehicle purchased primarily for personal, family or household purposes unless the following notice in at least 20-point bold type is prominently affixed to a window in the motor vehicle so as to be easily read from the outside and is brought to the attention of the prospective purchaser by the seller:

This vehicle is sold without any warranty. The purchaser will bear the entire expense of repairing or correcting any defects that presently exist and/or may occur in the motor vehicle unless the salesperson promises in writing to correct such defect or promises in writing that certain defects do not exist.

This paragraph prohibits the use of the term ‘‘AS IS’’ unless the sales contract, receipt, agreement or memorandum contains the following information in a clear, concise and conspicuous manner on the face of the document; the notice shall be in addition to the window statement required by this paragraph and may not contradict an oral or written statement, claim or representation made directly or by implication with regard to the quality, performance, reliability or lack of mechanical defects of a motor vehicle which is offered for sale:

AS IS

THIS MOTOR VEHICLE IS SOLD AS IS WITHOUT ANY WARRANTY EITHER EXPRESSED OR IMPLIED. THE PURCHASER WILL BEAR THE ENTIRE EXPENSE OF REPAIRING OR CORRECTING ANY DEFECTS THAT PRESENTLY EXIST OR THAT MAY OCCUR IN THE VEHICLE.

We hope this article clears up any misperceptions about state inspections of motor vehicles in Pennsylvania and explains the new regulations adopted regarding “Automotive Industry Trade Practices.”

  1. Automotive Industry Trade Practices, Pennsylvania Bulletin, 54 Pa.B. 4122, 7/20/2024 https://www.pacodeandbulletin.gov/Display/pabull?file=/secure/pabulletin/data/vol54/54-29/1016.htmlhttps://www.pacodeandbulletin.gov/Display/pabull?file=/secure/pabulletin/data/vol54/54-29/1016.html
  2. No, Pennsylvania state vehicle inspections are not stopping in 2025 | VERIFY, FOX 43 News, 8/13/2024. https://www.fox43.com/article/news/verify/pennsylvania-state-vehicle-inspections-not-stopping- in-2025-verify/521-f61a97e1-ee0c-43fbbc1c-2ab95301c90c
  3. IBID
  4. 37 Pa. Code § 301.1. Definitions. https://www.pacodeandbulletin.gov/Display/pacode?file=/secure/pacode/data/037/chapter301/s301.1.html&d=reduce
  5. 37 Pa. Code § 301.2. Advertising and sales presentation requirements. https://www.pacodeandbulletin.gov/Display/pacode?file=/secure/pacode/data/037/chapter301/s301.2.html&d=reduce
  6. 37 Pa. Code § 301.4. General provisions—motor vehicle dealer.

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Erik Ross

Erik Ross

Erik Ross brings over 30 years of experience in state government and lobbying to Milliron Goodman. He specializes in state government relations with a focus on transportation, energy, environmental, and public utility issues in one of the most innovative regulatory environments in the country. His duties include lobbying members and staff of the Pennsylvania General Assembly, executive departments, and regulatory agencies on behalf of clients. In addition, he serves as a liaison between clients and state government officials and assists in the drafting or amending of legislative and regulatory proposals.

Erik’s public sector experience includes positions as Research Analyst to the Chairman of the Senate Majority Policy Committee and Senate Environmental Resources & Energy Committee; and Legislative Assistant and Executive Assistant to the Pennsylvania Senate Majority Whip Mike Fisher from 1989 to 1993. His duties included management of legislative/policy development; drafting legislation, amendments, and correspondence; assisting the Majority Whip on the Senate floor; and assisting the Senate Majority Leader’s staff on caucus-related projects.

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