For Immediate Release:
Tuesday, June 26, 2018

Department of Consumer Affairs Announces New Rules to Combat Predatory Sales and Financing Practices in the Used Car Industry Are Now in Effect

Used Car Dealerships Now Required to Provide Consumers with a Consumer Bill of Rights, Financing Disclosures, and a Cancellation Option

NEW YORK, NY – NYC Department of Consumer Affairs Commissioner (DCA) Lorelei Salas today announced that all used car dealers in New York City are now required to provide consumers with a Consumer Bill of Rights, a financing disclosure form, where applicable, and a cancellation option—all of which must be in the language used to negotiate the contract. These new requirements ensure that all consumers are aware of their financing options and understand the terms of their sales contract, and are the result of a package of legislation signed into law last year to combat predatory practices in the used car industry.

“Buying a used car is a major financial commitment,” said DCA Commissioner Lorelei Salas. “By requiring used car dealerships to offer additional disclosures, we ensure that hard-working New Yorkers are able to have a fair and transparent deal when purchasing a car. These rules provide added protections for all consumers, especially those who fall victim to predatory practices.”

Under these new rules, used car dealerships, which DCA licenses, must:
  • Provide consumers with and have them sign the Consumer Bill of Rights. The Consumer Bill of Rights must also be posted in any area or office where consumers negotiate or execute sales contracts;
  • Provide consumers who finance a used car with the Financing Disclosure Form. This disclosure must include the lowest annual percentage rate (APR) offered by any financing company for a loan with the same term, number of payments, collateral, and down payment; and
  • Provide consumers with a Contract Cancellation Option. This allows consumers to cancel the contract within two weekdays, excluding legal holidays, and gives consumers time to review the contract and any financing agreement away from the dealership.

All of these requirements must be provided in the language in which the contract was negotiated.

DCA will be providing information about the new legal requirements to all licensed secondhand auto dealerships to ensure that all dealerships are aware of their responsibilities under the law. These new rules will help tackle common deceptive and predatory practices employed by used car dealers, including failing to inform consumers about the financing terms of a deal; deceiving consumers into purchasing a car with expensive “add-on” products that are often misrepresented as “mandatory” to obtain financing; misrepresenting monthly payment amounts to make the car appear cheaper; and failing to disclose dealer markups of lender financing rates, total interest rate, and the total amount a consumer will pay for a car over the life of a loan.

This package of legislation was introduced by Council Member Rafael Espinal, Jr., Chair of the Council Committee on Consumer Affairs and Business Licensing, Council Member Jumaane D. Williams, and former Council Member Dan Garodnick following a public hearing hosted by Commissioner Salas and Council Member Espinal.

“After months of investigation and research led by the Department of Consumer Affairs and the City Council, we passed comprehensive legislation to rein in the predatory aspects of the used auto industry,” said NYC Council Member Rafael Espinal, Chair of the Committee on Consumer Affairs. “I am pleased that DCA continues to prioritize car buyer’s protections and that as our legislation now goes into effect, New York City consumers will be the ones to benefit. I urge prospective buyers to take advantage of the Consumer Bill of Rights, financial disclosure forms and cancellation options to make sure they make the right decisions for themselves and their families.”

"Unscrupulous actors are too common in the used car industry, and when unchecked they take advantage of people dealing with the uncertainty of a purchase,” said NYC Council Member Jumaane Williams. “Years ago, I passed legislation enforcing accuracy in advertising within this industry, in the interest of providing consumers with accurate information. Now, by mandating that those buyers be informed of their rights, those consumers can reclaim further power through information and self advocacy. I want to thank DCA for acting to defend the rights of people who are making this major financial decision. I would also like to thank Council Member Espinal, former Council Member Garodnick for making this issue a priority and championing legislation to that effect."

Advocating for stronger laws is one prong of DCA’s efforts to combat predatory practices in the used car industry. DCA has also engaged in enforcement and education efforts in this area. Last year, DCA filed charges against one of New York City’s largest used car dealerships, with multiple locations, for using deceptive financing and sales practices and for targeting immigrants and New Yorkers with low incomes with their practices. DCA expects a decision in that case by the end of this year. DCA also filed charges against multiple used car dealerships in Brooklyn for engaging in deceptive and unlawful practices and secured more than $400,000 from financing companies for 50 victims of predatory lending at those dealerships. DCA also launched a public awareness campaign to educate New Yorkers about predatory lending in the used car industry.

DCA currently licenses 686 used car dealerships, and it has received more than 7,500 complaints about the industry since mid-2013. Since July 2013, DCA has conducted more than 3,600 inspections of used car dealerships and issued more than 2,200 violations, most of which were for unlicensed activity, failing to post required signs, and parking vehicles on the sidewalk or roadway. As a result of the Department’s work mediating complaints, charging businesses with violations of the law and rules, and executing settlements, DCA has secured $2.7 million in consumer restitution and nearly $2 million in fines against used car dealerships over the past five years.

DCA encourages any consumer who has had a problem with any used car dealership to file a complaint by visiting or contacting 311. Any New Yorker who is trying to get their finances in order before buying a car or who is struggling with debt, can make an appointment for free, one-on-one financial counseling at one of the City’s Financial Empowerment Centers by calling 311 or online at

The NYC Department of Consumer Affairs (DCA) protects and enhances the daily economic lives of New Yorkers to create thriving communities. DCA licenses more than 81,000 businesses in more than 50 industries and enforces key consumer protection, licensing, and workplace laws that apply to countless more. By supporting businesses through equitable enforcement and access to resources and, by helping to resolve complaints, DCA protects the marketplace from predatory practices and strives to create a culture of compliance. Through its community outreach and the work of its offices of Financial Empowerment and Labor Policy & Standards, DCA empowers consumers and working families by providing the tools and resources they need to be educated consumers and to achieve financial health and work-life balance. DCA also conducts research and advocates for public policy that furthers its work to support New York City’s communities. For more information about DCA and its work, call 311 or visit DCA at or on its social media sites, Twitter, Facebook, Instagram and YouTube.

Media Contacts:
Gloria Chin / Christine Gianakis
Department of Consumer Affairs
(212) 436-0042

Stay Connected:
Twitter | Facebook | Instagram | YouTube