Does an “As Is” sale absolve the used car dealer of any and all warranties in Nevada? The short answer: No.
The “As Is” sale by a used car dealer eliminates implied warranties such as the implied warranty of merchantability and the implied warranty of fitness for a particular purpose. However, the “As Is” sale does not eliminate a statutory express warranty under very limited circumstances.
The statutory express warranty on a used car applies only if the dealer sold the used car to a retail customer, the car has over 75,000 miles, and there are more than three substantiated complaints filed against the dealer with the Department of Motor Vehicles during a 12-month period. NRS 482.36662. A “substantiated complaint” means a complaint submitted to the Department of Motor Vehicles that was not resolved by the dealer in the manner recommended by the Department of Motor Vehicles or other acceptable manner. NAC 482.258.
The statutory express warranty must contain a statement that, in the event the vehicle becomes impaired as a result of a defect in a component or system of the vehicles drivetrain or engine, the used car dealer shall with reasonable promptness correct the defect or cause it to be corrected. NRS 482.36662(2). A “defect” means an imperfection, weakness or deficiency in a component or system of the engine or drivetrain that prevents or inhibits the engine, drivetrain or component from performing the function for which it was originally designed. NAC 482.254.
The scope and extent of the express warranty is determined according to a statutory schedule. NRS 482.36663. The warranty duration is valid for a limited number of miles and days – all determined by the number of miles on the odometer. For example, if a vehicle has at least 100,001 miles on the odometer, the warranty is valid for 2 days from the date of purchase or 100 miles – whichever occurs earlier. NRS 482.36663(5). Another example, if the odometer reflects at least 75,000 miles but less than 80,001 miles, then the warranty is valid for a period of 30 days from purchase or until the odometer registers 1,000 more miles than on the date the vehicle was purchased, whichever occurs earlier. NRS 482.36663(1).
The dealer must conduct, on a vehicle over 75,000 miles, a reasonably thorough inspection of the soundness and safety of the vehicle’s engine and drivetrain and disclose in writing any defects in the engine or drivetrain known to the dealer or which the dealer reasonably should have known after conducting the inspection. NRS 482.36661. “Drivetrain” means those components and systems within a motor vehicle that transfer power from the engine of the vehicle to the wheels of the vehicle, including, without limitation, a transmission, driveshaft, torque converter, differential, universal joint and constant velocity joint. NRS 482.3666. A “reasonably thorough inspection” means “an inspection of a used vehicle pursuant to NAC 482.260 in which the used vehicle is driven and inspected visually. The phrase does not include the removal of any components of a used vehicle for the purpose of conducting such an inspection.” NAC 482.256 (Emphasis added). Regarding the disclosure of mileage on the odometer, the federal Truth in Mileage Act requires the seller of a motor vehicle to provide an odometer disclosure to the buyer at the time of sale or transfer of ownership. The buyer must sign an acknowledgment of the mileage disclosure given. However, an odometer disclosure is only required is to be completed upon vehicles nine years old and newer; hence, many older used cars may be exempt from odometer disclosure.
A complaint regarding these warranty related matters must be filed with the Department of Motor Vehicles within 30 days after the sale of the vehicle as identified on the dealer’s report of sale. NAC 482.266.
When claims are made regarding used vehicles, the surety should be aware of this statutory express warranty despite an “As Is” sale. The express warranty is limited but knowledge of it will assist in properly addressing claims.