Did You Know? There's A Law That Requires Warranties On Cars Sold 'As Is'

By Carol Thompson

CHICAGO (CBS) -- People who buy used cars are protected in Illinois by a law that took effect on July 1, 2017. It requires used car dealers who sell cars "as-is", even auctions, to provide a limited powertrain warranty for 15 days or 500 miles, whichever comes first.

That powertrain warranty covers many parts of the engine that are essential for the car to run.

Sounds very pro-consumer until you look at the wide-ranging list of what's not covered:

•    Vehicles with more than 150,000 miles;
•    Vehicles with flood or rebuilt titles;
•    Vehicles used off-road, for racing or towing after the sale;
•    Vehicles that have been misused, neglected or have not had regular maintenance; and
•    Vehicles with a specific problem that the dealer told the consumer about before the sale.

Illinois State Rep. Rita Mayfield introduced HB 4377 in January of 2016.  She began pushing for the legislation after hearing from many of her constituents in the Waukegan area who would put hundreds of hard-earned dollars down on a car that would just break down within a week of driving it off the lot. She says she was unable to get any of those "buy here, pay here" dealerships to make good on the bad vehicles they sold.

The Attorney General's office lobbied for the bill. It targeted primarily pop-up dealers and auto auctions. It was supposed to have many more protections for buyers. In one version of the Senate bill, cars with up to 185,000 miles were covered. Rep. Mayfield said she even envisioned a 200,000-mile limit in the beginning. That was met with opposition since the more miles a car has, the more problems the engine might have. She and the attorney general's office had to give up a little ground for the bigger benefit.

Rep. Mayfield says in just over a year and a half, she can tell the new law is having a positive impact. Dealers in her district are now repairing cars before they sell them and when there is a problem within the warranty period, dealers will fix it for free.

"It's a good first start", she said, but added there is still room for improvement.

She would like to see the following included in any changes to the law:

•    The 15 day guarantee extended to one month;
•    A requirement mandating consumers get to start vehicles before purchasing or bidding on them;
•    A requirement mandating dealers fully disclose whether the vehicle is not working;
•    A limit on the sales price for non-working vehicles; and
•    A requirement to address any open recalls before selling vehicles

Rep. Mayfield hopes to start discussions with the Attorney General's Consumer Fraud unit to develop legislation that she may be able to introduce by early 2019.

Carol Thompson is an investigative producer for CBS 2 Chicago.