New Law in New Jersey Forces Automakers to Take On Recall Costs, Protects Drivers and Dealers

New Jersey passed a broad measure to shift vehicle recall costs from consumers and local dealers to automakers accountable for faulty parts or design. Motor Vehicle Open Recall Notice and Fair Compensation Act (Law S-3309/A-4380), signed by Governor Phil Murphy on September 11, 2025, protects car owners, dealerships, and auto mechanics in the state.

The new rule holds manufacturers financially responsible for open recalls, including repairs and components if the issue is theirs. Dealerships will be fairly reimbursed for warranty and recall labor and parts. The regulation prohibits automakers from utilizing chargebacks, incentives, or part manipulations to underpay local dealers.

A crucial consumer protection provision requires the Motor Vehicle Commission to issue recall notices with vehicle registration or renewal documents. Alerts will notify owners of open recalls and remind them that authorized dealers can repair for free. These warnings will connect car owners to federal safety databases for recall verification.

The regulation applies to dealers when recalled vehicles are under a “stop-sale” or “do not drive” notice when recall parts are unavailable. Automakers must pay dealers monthly for storing such vehicles until parts are available or can be disposed of.

Supporters argue this regulation corrects a long-standing automaker-dealer imbalance. Dealers and consumers paid for alerting and fixing faults for years as automakers delayed recalls and part deliveries. Both main political parties, dealer organizations, and auto technician unions supported the bill.

It takes effect on the first day of the seventh month after enactment. All New Jersey franchise agreements will be subject to its rules after that.

This means New Jersey automobile owners may expect better recall notifications, free repairs for open recalls through licensed dealers, and clearer avenues to hold automakers accountable for problems. This law guarantees equitable payment, reduces cost-absorbing risk, and increases recall transparency for dealers and auto mechanics. The adjustment puts pressure on manufacturers to respond swiftly to faults and addresses safety issues without unfairly delaying or costing consumers and small businesses.

Overall, New Jersey’s statute raises automobile safety recall consumer protection. The state improves accountability and road safety by mandating manufacturers to handle open recalls and keeping owners and dealerships informed and appropriately paid.

Sources:
Day Pitney
ROI NJ
Senate NJ
NJCAR
Insider NJ
BillTrack50