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National Assembly Legislation

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  • Motor Vehicle Management Act
    • Competent Ministry : Ministry of Land, Infrastructure, and Transport
    • Advance Publication of Legislation : 2021-03-31
    • Opinion Submission Deadline : 2021-04-14
Reasons for Proposal

According to vehicle registration statistics from the Ministry of Land, Infrastructure and Transport, the number of new vehicle registrations in 2020 was 1,922,370, and passenger cars accounted for the highest proportion with 1,630,760. Meanwhile, the number of vehicle transfer registrations, which are considered registrations for used vehicles, is 3,952,820, and transfer registrations by dealers account for 2,489,470. Used vehicle sales are continuously growing.

Despite the continuous growth of the used vehicle market, however, most dealers are small in scale, which makes it difficult to ensure transparent price information including consumer price information.

In addition, the current used vehicle market still has problems such as false vehicles up for sale, coercion, performance manipulation, mileage manipulation, and opaque pricing, despite continuous monitoring, supervision, and corrective actions, which continues to cause complaints and damages among consumers to increase.

In this regard, this Act aims to establish and operate a used vehicle sales information system to overcome consumer harm due to asymmetric information, impose liability to compensate for three times the damages for non-compliance with notifications, and introduce disclosure and punitive penalty surcharges for those advertising false sales in an effort to enhance transparency and responsibility in the used vehicle sales business.

Details

A. Require dealers who cause financial damages to buyers by not notifying or falsely notifying the information stated in law when selling vehicles and arranging sales to compensate for three times the damages (Article 58-3 paragraph 1).

B. Require dealers to guarantee sold vehicles for at least 1 month (Article 58-3 paragraph 4 subparagraph 3).

C. Include failure to notify changes in the structure of a vehicle in the reasons to terminate the vehicle sales contract (Article 58-6 paragraph 1 subparagraph 1).

D. Allow the Minister of Land, Infrastructure and Transport or the head of Si/Gun/Gu to disclose a list of dealers who violate the law during sales with false or exaggerated advertisements for vehicles (Article 58-7 newly inserted).

E. Require the Minister of Land, Infrastructure and Transport to establish and operate a used vehicle sales information system that comprehensively provides information related to vehicle sales in order to establish a transparent sales structure in the vehicle sales business and promote the buyer's right to know (Article 58-8 newly inserted).

F. Require the Minister of Land, Infrastructure and Transport to impose penalty surcharges equivalent to up to 50% of the profits on dealers who violate laws by providing false used vehicle offerings, failing to notify required information before a sales contract, and falsely disclosing the history of vehicles online (Article 74 paragraph 5 newly inserted).


Major Provisions

Articles 58-3, 58-6, 58-7, and 74

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