Does damage to a new automobile in a dealer’s inventory, however minor and regardless of repair, necessarily strip the vehicle of its status as “new” under the Consumers Legal Remedies Act (CLRA; Civ. Code § 1750 et. seq.?   In Bourgi v. West Covina Motors, Inc. — Cal.Rptr.3d –, 2008 WL 4335593 (2008), the Court of Appeal said that it did not.  However, the Court of Appeal held that under the circumstances of the case, the trial court should have allowed the jury to determine as an issue of fact whether repairs made to the subject vehicle prior to sale qualified the vehicle as “new” within the definition of the Vehicle Code. 


The CLRA makes it unlawful to represent goods as new “if they have deteriorated unreasonably or are altered, reconditioned, reclaimed, used or secondhand.”  Vehicle Code 9990 and 9991 allow car dealers to sell cars as new and not disclose “minor” repairs so long as the repairs are not more than the greater of $500 or 3% of the sales price.  Courts must read the CLRA in conjunction with the Vehicle Code, and allow sale of cars as “new” if repaired for less than the sum set forth in the Vehicle Code.  But, the Court of Appeal found a triable issue of fact regarding whether repairs — which were below the Vehicle Code sum — did not fully remedy the vandalism damage that the otherwise new car had sustained.


The California Legislature has provided as a matter of policy that new vehicle dealers are afforded a safe harbor by complying with the damage disclosure law. (See BMW of North America, Inc. v.. Gore (1996) 517 U.S. 559, 569-570.) The purpose of providing this safe harbor is to allow a dealer such as appellant, in the proper factual situation, to do exactly what it did in this case: repair minor damage and still lawfully be entitled to treat the car as new. This statutory purpose would be undermined if repairs that qualify for the safe harbor also trigger the CLRA to punish the dealer who represents the car as new. (See Olszewski v. Scripps Health (2003) 30 Cal.4th 798, 828 [practices expressly permitted by the Legislature provide a safe harbor from liability under unfair competition law].)