Proposed State Legislation to Require Used Vehicle Sales to Include an Express Warranty

The Washington State Legislature is proposing a new regulation that would require an express warranty be included in the sale of a used vehicle. If enacted, the regulation will be known as the Used Motor Vehicles Express Warranties Act.

HB 1184 Enacting the Used Motor Vehicles Express Warranties Act
Under the proposed legislation, an express warranty must be included with a used vehicle sale and:

  • The express warranty would have the following duration:
    • Used vehicle with less than 40,000 miles - 90 days or 3,750 miles, whichever occurs first.
    • Used vehicle with 40,000 - 79,999 - 60 days or 2,500 miles, whichever occurs first.
    • Used vehicle with 80,000 - 124,999 - 30 days or 1,250 miles, whichever occurs first.
  • If the used motor vehicle remains subject to a manufacturer's warranty at the time of sale, and the warranty has been duly assigned or transferred to the buyer, the duration of the express warranty under this act is reduced by the remaining duration of the manufacturer's warranty.
  • Requires the purchaser to give reasonable notice for applicable repairs to the used motor vehicle dealer. Before the purchaser exercises any other remedies, the dealer shall have a reasonable opportunity to repair the vehicle. The purchaser's payment(s) for repair(s) would be one-half of the cost of repairs; however, purchaser's cumulative payments for repair(s) must not exceed $200. If the used motor vehicle dealer fails to repair the same defect after three attempts, the dealer shall accept return of the vehicle from the purchaser and refund the full repurchase price, less a reasonable allowance for use.
  • Requires the agreement for the sale of the used vehicle to include a statement about the express warranty or the sale agreement becomes voidable.
  • Requires the dealer to disclose in writing to the purchaser at the time of the vehicle sale the existence of any open, unremedied recalls.

The proposed legislation does not include used vehicles that are more than 20 years old at the time of sale or any used vehicle that is not roadworthy, but this fact must be disclosed in writing at the time of sale. Also, the express warranty does not extend to damage that occurs after the sale of the used vehicle and that damage is the result of any abuse, misuse, neglect, failure to perform regular maintenance, or to maintain adequate oil, coolant, or other required fluid or lubricant or off-road use, racing, or towing; however, the dealer will have the burden to prove that any damage was the result of abuse, misuse, neglect, or failure to perform regular maintenance.

What can you do?
Collectively, we can oppose this legislation and you can make your opposition heard by sending your comments and opposition to this bill directly to members in your legislative district. Follow this link: Comment on HB 1184.

Read the Full Text of the Bill
This is just a summary of the bill. We encourage you to read the full text of the bill here: HB 1184 Enacting the Used Motor Vehicles Express Warranties Act.


FTC Extends Deadline for Compliance with the New Safeguards Rule Provisions to June 9, 2023

The FTC reviewed their Safeguards Rule in 2021 and determined that it needed updating to be effective and relevant to how businesses safeguard their customers' sensitive information. Due to staffing shortages and supply chain issues, the FTC extended the deadline for the amended provisions to June 9, 2023.

The Safeguards Rule requires non-banking financial institutions to ensure the privacy of sensitive customer information. The phrase "financial institutions" includes auto dealers and any business that engages in financial-related activities. These businesses are required under the Safeguards Rule to establish a written information security program outlining their methods for protecting consumer data.

The extended deadline applies only to certain provisions of the revised Rule. Those provisions that have an extension include:

  • Designating a qualified person to oversee their information security program.
  • Developing a written risk assessment.
  • Limiting and monitoring who can access sensitive customer information.
  • Encrypting all sensitive information.
  • Training security personnel.
  • Developing an incident response plan.
  • Periodically assessing the security practices of service providers.
  • Implementing multi-factor authentication or another method with equivalent protection for anyone accessing customer information.

For more information on the details of what is required for complying with the updated provisions, visit FTC Safeguards Rule: What Your Business Needs to Know.


WA State Legislation - Bills Passed in 2022

The 2022 WA State Legislature passed various bills relating to vehicle licensing.

ESSB 5974: Addressing transportation resources - Effective July 1, 2022

This bill includes an increase in the negotiable documentary service fee that dealers are allowed to charge and various changes to vehicle licensing & titling fees.

Negotiable Documentary Service Fee: The fee increases to $200.00 per vehicle sale or lease, up from $150.00. If you choose to charge this fee, you are still required to comply with proper disclosure of the fee including that the fee is negotiable.

Dealer Temporary Permits: The fee for temporary permits increases to $40.00, up from $15.00. You will still be credited the $5.00 when you replace your temps during title transfers.

License Plate Fees: The original plate fee increases to $50.00, up from $10.00 and the replacement plate fee increases to $30.00, up from $10.00. For motorcycles, the original plate fee increases to $20.00 and the replacement plate fee increases to $12.00.

For vehicles previously registered in any other state or country, there is a mandatory stolen vehicle check fee. This fee will increase to $50.00, up from $15.00. The fee will again increase to $75.00 starting on 7/1/2026.

We encourage all dealers to check with their local DOL subagent who processes their title transfers for a breakdown of fees charged for licensing, registration, and titling.

For more information on this bill, visit ESSB 5974.


SHB 1984: Protecting privacy of addresses related to vehicle registration certificates - Effective January 1, 2023

This bill requires printed-paper registration certificates for vehicles, trailers, and vessels to be printed on paper that allows for the manual removal of a registrant's address, by the named registered owner.

For more information on this bill, visit SHB 1984.


SHB 1790: The creation, display, and material durability of temporary license plates - Effective July 1, 2023

This bill replaces temporary permits with temporary license plates, made of durable material, and displayed in the same manner as a permanent license plate.

This includes the dealer temporary permit that is issued to a buyer during a vehicle sale.

For more information on this bill, visit SHB 1790.


DOR Excise Tax Advisory on Retail Sales & Use Tax on Goodwill Vehicle Repairs

The Department of Revenue issued an Excise Tax Authority (ETA) for guidance on how Washington's retail sales & use tax laws apply to "goodwill repairs" that are performed by dealers.

The Department of Revenue defines goodwill repairs to mean "repairs or services performed on a vehicle by a dealer or manufacturer when those repairs or services are not covered by any warranty." Usually these types of repairs often have no contractual obligation and are authorized at the sole discretion of the dealer or manufacturer and the repair is free of charge.

When a goodwill repair is done on a vehicle, the customer does not owe retail sales tax on the repair because there is no sale being made to the customer since the repair is being made free of charge; however, there may be retail sales or use tax due by the dealer or manufacturer.

If a dealer provides a goodwill repair to a customer's vehicle, there is no retail sales tax due by the customer but the dealer does owe use tax on the value of the parts used to perform the repair if those parts were purchased with a reseller permit and no sales tax was paid by the dealer at the time of purchase for those parts. However, no use tax is due on labor the dealer provides to make the repair.

We reached out to the Department of Revenue for clarification on how this ETA applies in the situation where, as part of the condition of a retail vehicle sale, an independent motor vehicle dealer promises to make a repair on the vehicle a purchaser is buying from the dealer, and the promise to repair is done on the Due Bill form at time of vehicle purchase and, as negotiated at the time of vehicle purchase, the repair will be performed at a later date after the vehicle purchase and will be free of charge.

The Department of Revenue's response: Since the 'Due Bill' for repairs was negotiated at the time of sale as a condition of the sale, the parts the dealer pulled from their inventory in this situation are not subject to use tax. The fact that the repair is actually done at a later date, does not affect this. However, if the repairs were negotiated independently from the purchase of the vehicle, then the dealer would be subject to use tax on the parts pulled from their inventory.

The ETA also gives guidance to dealers when the goodwill repair is authorized by the manufacturer and completed by the dealer. The dealer may have obligations for collecting or owing retail sales or use tax in these situations.

The response we received from the Department of Revenue is not binding to any one specific dealer. If you would like a binding tax ruling on this specific situation for your dealership or if you would like a binding tax ruling on any question or issue you may have, visit Request a Tax Ruling.

For more information about this ETA, please visit Department of Revenue's ETA 3228.2021 Retail Sales and Use Tax on Goodwill Vehicle Repairs.