Lawmakers approve bill to increase consumer protections for car buyers

Rep. Claman: 'HB 36 strengthens Alaska’s motor vehicle dealer license requirements without creating barriers to entry or restricting competition'

JUNEAU Today, the Alaska Legislature passed legislation sponsored by Rep. Matt Claman (D-Anchorage) that strengthens Alaska’s motor vehicle dealer license requirements by modernizing the statute and incorporating reasonable standards for obtaining a motor vehicle dealer’s license without creating barriers to entry into the field or restricting competition.

 

Alaska’s current requirements for obtaining a motor vehicle dealer’s license are some of the least stringent in the nation. Under current law, a motor vehicle dealer must register biennially by filling out an application, pay a $50 registration fee, and maintain a surety bond of $50,000. Many states provide for a grievance process, grounds for license revocation, proof of location, and require dealers to obtain liability insurance covering bodily harm and property damage.

“Alaska’s lenient requirements make it easy for unscrupulous actors to obtain dealer licenses and gain access to dealer-only auctions where used cars are sold at discounted rates,” Representative Claman said.

 

House Bill 36 updates the surety bond requirement – which hasn’t been changed in 20 years – to $100,000 to stay in line with the current economics of the automobile industry. Furthermore, HB 36 requires that dealers carry comprehensive liability insurance. HB 36 also limits ownership of persons who have been convicted of felonies for fraud or embezzlement within five years of the application date and requires dealers with employees to confirm they are aware of Alaska’s workers’ compensation coverage requirements.

 

Representative Claman added, “Purchasing a car may be one of the largest investments a consumer makes in their lifetime, so we need to ensure that reasonable standards for becoming a dealer are in place as well as financial protections should the sale not work out.”

 

HB 36 previously passed the House of Representatives by a vote of 29-10, and today the bill passed the Senate 20-0. The bill will now return to the House for a concurrence vote.

Phone
Phone: 907-465-4451
Fax: 907-465-3445

Address
State Capitol Room 208
Juneau AK, 99801