Assemblyman PAUL D. MORIARTY
District 4 (Camden and Gloucester)
Assemblyman ANGEL FUENTES
District 5 (Camden and Gloucester)
Prohibits installation of payment assurance device as condition of securing motor vehicle financing.
CURRENT VERSION OF TEXT
An Act concerning motor vehicle payment assurance devices and supplementing P.L.1960, c.39 (C.56:8-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. As used in this act:
“Dealer” means a person who is actively engaged in the business of buying, selling, exchanging, or leasing new or used motor vehicles at retail and who has an established place of business.
“Lender” means an agent, officer, director, and employee of a lender, and any person who solicits, arranges for or otherwise participates or assists in the making of loans, or in any way acts as an intermediary between a borrower and a lender in effecting loans related to the sale or lease of a motor vehicle;.
“Motor vehicle” has the same meaning as defined in R.S.39:1-1.
“Payment assurance device” means a device installed on a motor vehicle with global positioning system capability, or starter interrupt capability allowing for the remote enabling or disabling of the motor vehicle, and which is installed pursuant to a motor vehicle purchaser’s or lessee’s financing or lease agreement.
2. It is an unlawful practice and a violation of P.L.1960, c.39 (C.56:8-1 et seq.) for a dealer or lender to install or have installed a payment assurance device on a motor vehicle prior to its sale or lease, as a condition of a financing agreement made with a purchaser or lessee.
3. This act shall take effect on the first day of the fourth month next following enactment.
This bill makes it an unlawful practice under the consumer fraud act, P.L.1960, c.39 (C.56:8-1 et seq.), for a motor vehicle dealer, or a lender engaging in motor vehicle loans, to install a payment assurance device on a motor vehicle in connection with its sale or lease, pursuant to a financing agreement with the purchaser.
The bill defines a “payment assurance device” as a device installed on a motor vehicle with global positioning system (GPS) capability, or starter interrupt capability allowing for the remote enabling or disabling of the motor vehicle, and which is installed pursuant to a motor vehicle purchaser’s or lessee’s financing or lease agreement.
As the subprime auto lending market has expanded greatly in recent years, these devices are increasingly installed on motor vehicles as a condition of securing a loan. Use of the devices is generally unregulated and allows predatory lenders to track and store data concerning the movements of a vehicle without any safeguards for the privacy of its owner or operator, and in the case of devices with starter interrupt capability, allows the remote disabling of motor vehicles without warning, causing potential public safety issues and other serious consequences. Accordingly, this bill protects the safety and privacy of consumers by prohibiting the installation of a payment assurance device in connection with a financing or lease agreement.