Wednesday, January 18, 2017

KNOW YOUR RIGHTS: A car dealer’s affirmative duty to disclose in an “as-is” sale to a consumer in Kentucky

In Kentucky, a car dealer is required to disclose prior damage sustained by a motor vehicle to a purchaser.  

Pursuant to KRS 186A.540, "(1) An individual, or a dealer required to be licensed pursuant to KRS Chapter 190, shall disclose all damages to a motor vehicle: (a) Of which the individual or the dealer has direct knowledge; (b) Which result in repairs or repair estimates that exceed one thousand dollars ($1,000); and (c) That occur while the motor vehicle is in the individual's or the dealer's possession and prior to delivery to a purchaser. (2) Disclosure under this section shall be in writing and shall require the purchaser's signature acknowledging the disclosure of damages." Additionally, courts in Kentucky have expanded the application of the statute to hold that a Kentucky car dealer must disclose the damage prior to sale even where the damage occurred before the dealer came into possession of the vehicle. Keeton v. Lexington Truck Sales, Inc. (Ky.App. 2008) 275 S.W.3d 723. As the court explained in Keeton v. Lexington Truck Sales, Inc., to interpret KRS 186A.540 otherwise would be inconsistent with the legislative intent of KRS 186A.540 and "enable unscrupulous dealers to keep the secret that the dealer is selling a damaged vehicle".

Therefore, disclosure of prior damage is required by a Kentucky car dealer under KRS 186A.540 where: (1) a dealer has direct knowledge of the damage, (2) the damage resulted in repairs or repair estimates in excess of $1,000, and (3) the damage occurred prior to delivery of the vehicle to the purchaser.

What kinds of damage must be disclosed? Repairs that must be disclosed include any types of repairs, whether body repairs, mechanical repairs, or otherwise. Smith v. General Motors Corp. (Ky.App. 1998) 979 S.W.2d 127.  

How must the damage be disclosed? The disclosure must be in writing and the purchaser must sign the written disclosure. KRS 186A.540(2).

What if you purchased the motor vehicle for business use? The law still applies to you. In fact, a Kentucky Appellate Court has held that a commercial purchaser is within the class of persons intended to be protected by KRS 186A.540. Keeton v. Lexington Truck Sales, Inc. (Ky.App. 2008) 275 S.W.3d 723.

Has a Kentucky car dealer failed to disclose to you more than $1,000 in damage to a motor vehicle that you purchased from them? Contact the dealer and see if they will take the vehicle back and give you your money back. If not, then contact the Kentucky Attorney General's Consumer Protection Office, 888-432-9257, Or, you may want to contact a private attorney who specializes in Lemon Law in Kentucky. Feel free to call Burdge Law Office on our Toll Free Hotline, 1.888.331.6422, to see if we can help you out of your "lemon" vehicle.

Beth Wells

Helping Consumers Get Rid of Lemons, 13 Years Running

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