Gov. Phil Murphy signed the Motor Vehicle Open Recall Notice and Fair Compensation Act into law Thursday, which provides added protections for vehicle owners and car dealers when a vehicle is recalled.
The bipartisan law, which takes effect on July 1, 2026, was passed by both houses of the legislature on June 30 and has been awaiting the governor’s signature since then.
For consumers, some of the biggest protections include requiring dealers to provide buyers of used vehicles copies of any recall notices, according to the new law.
It prohibits the sale of a used vehicle with a serious-enough defect that resulted in the National Highway and Traffic Safety Administration issuing a do-not-drive, stop-sale notice, or similar recall notice, according to the law.
The law requires vehicle manufacturers and dealers to notify the state Motor Vehicle Commission when a recall notice has been issued for a vehicle, and requires the manufacturer or dealer to send a notice on official MVC letterhead to registered owners of those vehicles.
The law also requires vehicle manufacturers to cover all costs of warranty and repair work to comply with recall notices, including parts, and labor.
It also prevents manufacturers from shifting expenses onto dealers or consumers, said officials with a state car dealers’ association.
It does that by requiring vehicle manufacturers to reimburse dealers at the retail rate for warranty and recall work.
“This legislation represents a critical step forward in protecting consumers, leveling the playing field for locally owned dealerships, and ensuring that automakers fairly compensate those who fix their mistakes,” Laura Perrotta, president of the New Jersey Coalition of Automotive Retailers president, said in a statement.
The new law also encourages vehicle owners to get free safety repairs at authorized dealerships.
The International Association of Machinists and Aerospace Workers, a union that represents auto mechanics, also praised the new law saying it ensures mechanics get fairly paid for warranty work.
“This legislation was approved with broad bipartisan support, requiring auto dealership technicians to be paid the same rate for warranty repairs as non-warranty work,” the union said in a statement.
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