New Jersey's Resale Rule Counts Four Kinds of Return: Other States' Statutes Included

A resale rule that starts before anyone lists the car

Most writing about New Jersey's new-car lemon law stops at the refund. What the statute does next sits in a section that does not use the word "refund". N.J.S.A. 56:12-35 is a prohibition with conditions attached, and its opening sentence decides which cars fall inside it.

The full opening reads: "If a motor vehicle is returned to the manufacturer, or, in the case of an authorized emergency vehicle, to the manufacturer, co-manufacturer, or post-manufacturing modifier, under the provisions of this act or a similar statute of another state or as the result of a legal action or an informal dispute settlement procedure, it shall not be resold or re-leased in New Jersey unless:". The sentence then hands off to three numbered conditions.

That trigger clause is the part people shorten, and shortening it changes the rule. A summary that says "returned under the New Jersey Lemon Law" drops three of the four routes the Legislature wrote in. The full text sits at Justia, New Jersey Revised Statutes Section 56:12-35, Sale, leasing of returned motor vehicle.

One disclosure first. This is a reading of statutory and regulatory text, not legal advice, and the author is not an attorney.

Four routes into one prohibition

The trigger clause names four ways a vehicle reaches the resale bar:

  • returned "under the provisions of this act" — the New Jersey Motor Vehicle Warranty Act itself;
  • returned under "a similar statute of another state";
  • returned "as the result of a legal action";
  • returned "as the result of ... an informal dispute settlement procedure".

Only the first is a New Jersey lemon law return. The second is the surprise: a vehicle repurchased under another state's lemon law and then brought into New Jersey sits inside the prohibition, with no New Jersey proceeding in its history. The third and fourth cover outcomes that reached no state statute — a settled suit, or a manufacturer-run arbitration program.

The title statute repeats the four-route phrasing. N.J.S.A. 39:10-9.3(a) applies "In every sale or transfer of a motor vehicle returned to the manufacturer under the provisions of P.L.1988, c.123 (C.56:12-29 et seq.), a similar statute of another state, or as the result of a legal action or an informal dispute settlement procedure".

Four routes into New Jersey's resale conditions Four boxes labeled New Jersey Motor Vehicle Warranty Act, a similar statute of another state, a legal action, and an informal dispute settlement procedure each lead to one box stating that the vehicle is not resold or re-leased in New Jersey unless three conditions are met, which in turn leads to a box about the certificate of ownership. Four routes named in the trigger clause N.J.S.A. 56:12-35(a) and N.J.S.A. 39:10-9.3(a) use the same four-route wording New Jersey Motor Vehicle Warranty Act A similar statute of another state A legal action (settlement or judgment) An informal dispute settlement procedure Not resold or re-leased in New Jersey unless three conditions are met Certificate of ownership carries the notice on each later transfer

How a New Jersey return gets made in the first place

The resale bar matters only once a return has happened, so the counting rules come first. New Jersey starts its clock at delivery. N.J.S.A. 56:12-31 obliges the manufacturer to repair a reported nonconformity "during the first 24,000 miles of operation or during the period of two years following the date of original delivery to the consumer, whichever is earlier". The regulations call that window the "term of protection" and set it to the same two limits.

Inside that window sits a second line. Section 56:12-31 continues: "Such repairs if made after the first 12,000 miles of operation or after the period of one year following the date of original delivery to the consumer, whichever is earlier, shall be paid for by the consumer, unless otherwise covered by a warranty of the manufacturer, co-manufacturer or post-manufacturing modifier, and shall be recoverable as a cost under section 14 of P.L.1988, c.123 (C.56:12-42)." The repair duty runs the full term; who fronts the bill changes at one year or 12,000 miles, subject to the warranty carve-out.

The presumption of an unrepairable nonconformity lives in N.J.S.A. 56:12-33(a), which lists three alternative counts. First, "Substantially the same nonconformity has been subject to repair three or more times" and "the nonconformity continues to exist". Second, the vehicle "is out of service by reason of repair for one or more nonconformities for a cumulative total of 20 or more calendar days, or in the case of a motorhome, 45 or more calendar days, since the original delivery of the motor vehicle and a nonconformity continues to exist". Third, a nonconformity "likely to cause death or serious bodily injury if the vehicle is driven" that "has been subject to examination or repair at least once" and still exists.

Two details get compressed away. The out-of-service count runs in calendar days and is cumulative across "one or more nonconformities", so separate defects stack into the same 20. And paragraph (1) excludes a defect counted under paragraph (3), keeping a serious-safety defect out of the repeated-repair track.

None of the three counts operates on its own. Subsection b. adds that the presumption "shall apply against a manufacturer only if the manufacturer has received written notification ... by certified mail return receipt requested, of a potential claim pursuant to the provisions of this act and has had one opportunity to repair or correct the defect or condition within 10 calendar days following receipt of the notification." That certified-mail step is also the gate to the state forum: under N.J.S.A. 56:12-37(a) filing it is "a prerequisite to the filing of an application under this section."

Subsection c. adds a tolling rule summaries rarely carry: "The two-year term and the 20-day period, or 45-day period for motorhomes, specified in this section shall be extended by any period of time during which repair services are not available to the consumer because of a war, invasion or strike, or a fire, flood, or other natural disaster." Note what it extends: the two-year term and the out-of-service periods, not the 24,000-mile figure.

New Jersey term of protection and the three presumption counts A horizontal bar runs from the date of original delivery to the earlier of 24,000 miles or two years. A marker at the earlier of 12,000 miles or one year shows where repair cost shifts to the consumer unless a warranty covers it. Three stacked rows below show the alternative counts: three or more repairs of substantially the same nonconformity, 20 or more cumulative calendar days out of service, 45 for a motorhome, or at least one examination of a death or serious injury nonconformity. A final row shows certified mail notice plus a 10 calendar day opportunity. Where New Jersey starts counting N.J.S.A. 56:12-31 and 56:12-33; N.J.A.C. 13:45A-26.2 consumer-paid line at 12,000 miles / 1 year duty to repair continues to 24,000 miles / 2 years delivery earlier Three alternative counts under 56:12-33(a) 3 or more repairs of substantially the same defect 20 cumulative calendar days out of service (motorhome: 45) 1 examination of a death or serious injury nonconformity Plus certified mail notice and one opportunity within 10 calendar days War, invasion, strike, fire, flood or natural disaster extends the two-year term and the 20-day and 45-day periods.

What the record has to show

Inside the trigger clause, N.J.S.A. 56:12-35(a) attaches three conditions before resale or re-lease in New Jersey. Each produces a document.

The first is a written statement, passed from the manufacturer to the dealer, distributor or lessor and on to the consumer, "on a separate piece of paper, in 10-point bold-face type". The statute prints the wording in full, beginning "IMPORTANT: THIS VEHICLE WAS RETURNED TO THE MANUFACTURER OR OTHER RESPONSIBLE PARTY BECAUSE IT DID NOT CONFORM TO THE MANUFACTURER'S OR OTHER PARTY'S WARRANTY FOR THE VEHICLE AND THE NONCONFORMITY WAS NOT CORRECTED WITHIN A REASONABLE TIME AS PROVIDED BY LAW".

Second is a receipt. The seller "obtains from the consumer a signed receipt certifying, in a conspicuous and understandable manner, that the written statement required under this subsection has been provided." The statute allows a substitute: the obligation can be met "by making such a notation, in a conspicuous and understandable manner, on the vehicle buyer order form accompanying the sale or lease of that vehicle".

Third is a filing: the seller notifies the Chief Administrator of the Motor Vehicle Commission of the sale or transfer, "in accordance with the provisions of section 1 of P.L.1993, c.21 (C.39:10-9.3)" — the title statute again.

The regulations add the manufacturer's side. N.J.A.C. 13:45A-26.3(c) requires the returned vehicle's ownership document to be stamped "RETURNED TO MANUFACTURER UNDER LEMON LAW OR OTHER PROCEEDING", the stamped document to reach the Motor Vehicle Commission within 10 days, a "NOTICE OF NONCONFORMITY" to go to the next purchaser, a signed acknowledgment naming the vehicle identification number and N.J.S.A. 56:12-35, and notice to the Commission on resale or release. The rule is posted by the New Jersey Division of Consumer Affairs, Chapter 45A Subchapter 26 Lemon Law regulations, with a parallel rendering at the Cornell Legal Information Institute, N.J.A.C. 13:45A-26.3, Statements to consumer; other notices. The rule's stamp wording and the Division's public-facing page differ slightly.

That split — one document owed to the motor vehicle agency, another to the consumer protection statute — is the pattern traced in A DMV Rule, Not the Lemon Law, Sets What a Repair Invoice Must Show. Here the warranty act conditions the sale and Title 39 sets what the certificate of ownership must say.

The title notice outlives the first resale

N.J.S.A. 39:10-9.3(a) requires that the certificate of ownership "indicate, in a conspicuous and understandable manner, that the motor vehicle was returned to the manufacturer because it did not conform to the manufacturer's warranty and the nonconformity was not corrected within a reasonable time as provided by law." The sentence that gives the rule its reach follows: "The notice required under the provisions of this subsection shall continue to appear on each certificate of ownership issued as a result of any subsequent sale or transfer of that motor vehicle."

The disclosure in 56:12-35 runs to the first buyer after the return; the title notice in 39:10-9.3 repeats on each later certificate. Subsection b. sets the consequence for moving the car without it: "Any person who transfers or attempts to transfer a motor vehicle in violation of this section shall be subject to a fine of not more than $7,500." The full section is at Justia, New Jersey Revised Statutes Section 39:10-9.3, Certificate of ownership of motor vehicle returned to manufacturer to indicate status.

Separately, 56:12-35(c) provides that "Failure to comply with the provisions of this section constitutes an unlawful practice pursuant to section 2 of P.L.1960, c.39 (C.56:8-2)" — the Consumer Fraud Act. Two enforcement paths, two different failures.

The federal phrase sitting inside the state clause

The fourth route — "an informal dispute settlement procedure" — is defined next door. N.J.S.A. 56:12-36(a) frames it as one "established, or participates in ... pursuant to section 110 of Pub.L.93-637 (15 U.S.C. s.2310) and the rules promulgated thereunder, or the requirements of this section". The rules promulgated thereunder are the Federal Trade Commission's: "Mechanism means an informal dispute settlement procedure which is incorporated into the terms of a written warranty to which any provision of Title I of the Act applies", per the Electronic Code of Federal Regulations, 16 CFR Part 703, Informal Dispute Settlement Procedures.

New Jersey declines to make that procedure a gate. Section 56:12-36(a) says "a consumer shall not be required to first participate in the informal dispute settlement procedure before participating in the division's summary hearing procedure under this act." It sets its own floor too, including that "Documents shall not be submitted to any dispute settlement body unless the documents have been provided to each of the parties in the dispute at least seven days prior to commencement of the dispute settlement hearing." Federal and state layers doing different jobs in one dispute is the arrangement examined in Federal Law Gates a Suit, California a Presumption, Florida Only the Forum. New Jersey borrows the federal definition without the federal prerequisite.

Numbers to Re-check

Figures worth verifying against published text.

  • 24,000 miles or two years from original delivery, whichever is earlier — the repair duty and the term of protection (56:12-31; N.J.A.C. 13:45A-26.2).
  • 12,000 miles or one year, whichever is earlier — after which repairs are paid by the consumer, unless otherwise covered by a manufacturer warranty, and recoverable as a cost (56:12-31).
  • Three or more repairs of substantially the same nonconformity, excluding one handled under the serious-injury paragraph (56:12-33(a)(1)).
  • 20 or more cumulative calendar days out of service since original delivery; 45 for a motorhome (56:12-33(a)(2)).
  • At least once examined or repaired, for a death-or-serious-injury nonconformity (56:12-33(a)(3)).
  • 10 calendar days after receipt of the certified-mail notice, for the manufacturer's one further opportunity (56:12-33(b); N.J.A.C. 13:45A-26.3(a)).
  • 10 days for the stamped ownership document to reach the Motor Vehicle Commission (N.J.A.C. 13:45A-26.3(c)).
  • 10-point bold-face type, separate piece of paper for the resale statement (56:12-35(a)(1)).
  • Seven days before a dispute settlement hearing for documents to reach each party (56:12-36(d)(2)).
  • 20 days from acceptance to the hearing, unless a later date is agreed upon by the consumer; 20 days from the close of the hearing to the written decision, 15 days for the director to act (56:12-37(b)).
  • $5,000.00 per day for unreasonable failure to comply with the decision (56:12-37(b)).
  • Not more than $7,500 for transferring a vehicle without the required certificate notice (39:10-9.3(b)).
Day counts after the certified mail notice Four sequential steps shown as a ladder. Step one, 10 calendar days after receipt of the certified mail notice for one further repair opportunity. Step two, 20 days from acceptance of the application to the hearing date. Step three, 20 days from the close of the hearing for a written decision. Step four, 15 days for the director to adopt, reject or modify it. A closing note shows 5,000 dollars per day for unreasonable failure to comply. Day counts after the certified mail notice N.J.S.A. 56:12-33(b) and 56:12-37(b) 10 calendar days one more opportunity 20 days to hearing from acceptance 20 days to decision from close of hearing 15 days for the director adopt, reject or modify $5,000.00 for each day of unreasonable failure to comply, counting from the day after the completion date the decision sets Filing the certified mail notice is a prerequisite to the application. The seven-day document rule in 56:12-36(d)(2) belongs to a separate track. Figures are the periods stated in the statute, not an estimate of elapsed time.

Where this framework does not apply

The statute marks boundaries itself.

Dealers are not made auditors. N.J.S.A. 56:12-35(b) says that "Nothing in this section shall be construed as imposing an obligation on a dealer, distributor, or lessor to determine whether a manufacturer, co-manufacturer, or post-manufacturing modifier is in compliance with the terms of this section", and adds that it does not impose liability on those parties for a manufacturer's failure to comply.

The counting rules carve out vehicle categories. A motorhome uses 45 cumulative calendar days rather than 20. Farm tractors fall under a separate paragraph of 56:12-31, which runs two years from delivery with no mileage figure and shifts repair cost at one year. Authorized emergency vehicles add co-manufacturers and post-manufacturing modifiers as obligated parties, and 56:12-37(a) contemplates disputes among them about the source of a nonconformity.

The prohibition is geographic on its face: 56:12-35(a) bars resale or re-lease "in New Jersey". A returned vehicle sold elsewhere is outside that sentence.

Where This Doesn't Apply

Four limits are worth stating.

First, the phrase reads "a similar statute of another state". It does not import that other state's remedies or thresholds into New Jersey; it identifies a category of returned vehicles for the New Jersey resale conditions. Whether a given state's statute is "similar" within the clause is a question the text does not resolve on its own.

Second, this is the new-vehicle warranty act. New Jersey regulates used-vehicle sales under a separate scheme, and the resale section does not pull a car back inside the term of protection.

Third, the Division's published list of branded vehicles is a research aid, not a register of every buyback. The Division says the list is "compiled from information received by the New Jersey Lemon Law Unit and, as of November 2008, from the New Jersey Motor Vehicle Commission" and should "not be considered a complete list of all vehicles repurchased" under these laws.

Fourth, and again: this is a reading of published text by someone who is not an attorney, and it is not legal advice. A reader with an actual dispute should take the statute and the repair orders to a licensed New Jersey lawyer.

Reading the clause to its end

The habit worth building is small. When a statute lists the situations it covers, read to the final "or" before deciding what is outside it. Sections 56:12-35 and 39:10-9.3 both name four routes, and three of them involve no New Jersey lemon law proceeding. A summary that keeps only the first route states a narrower rule than the Legislature enacted, and the gap shows where it matters most: a car returned somewhere else and offered for sale here.

The counting rules in front of the return follow the same discipline. Two years or 24,000 miles from original delivery, with a cost line at one year or 12,000 miles. Three repairs, or 20 cumulative calendar days, or one examination of a serious-safety defect, each paired with certified mail and a 10-calendar-day final opportunity. Under 56:12-42 a prevailing consumer is awarded "reasonable attorney's fees, fees for expert witnesses and costs". Each figure is in the published text and can be checked in an afternoon.

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