DMV/VERIFI Tip of the Week, #106 - Catalytic Converter Etching Kits

DMV/VERIFI Tip of the Week, #106

Date: 4/3

Catalytic Converter Etching Kits

Effective April 15, 2023, all new motor vehicle dealers and qualified dealers are subject to new requirements regarding catalytic converter etching kits. Chapter 574 of the Laws of 2022 amends §415 of the Vehicle and Traffic Law (VTL) by adding a new subdivision 21 as follows:

21. New motor vehicle etching kits.  Every new motor vehicle dealer and every qualified dealer shall be required to stock etching kits that are capable of etching a traceable serial number onto the catalytic converter of a new motor vehicle that can be clearly seen and quickly linked back to the vehicle.  Such etching kits shall be offered by every new motor vehicle dealer and qualified dealer to any person purchasing a new motor vehicle, at no more than the cost of such etching kit to such dealer.

Every new motor vehicle dealer and qualified dealer must:

• Keep catalytic converter etching kits in stock;
• Offer catalytic converter etching kit(s) to any person purchasing a new motor vehicle;
• Charge no more than the dealer cost for such etching kit(s).
  • Labor cost can be charged, consistent with DMV regulation.

If the etching kit is not installed prior to showing the vehicle to a prospective purchaser, then the dealer must offer the kit to the purchaser.  If the purchaser accepts the offer, then the etching kit must be itemized separately on the invoice/bill of sale.

As with most optional equipment and accessories, an etching kit is a taxable item.

The new motor vehicle dealer or qualified dealer may record and/or register the catalytic converter serial number on the customer’s behalf or provide the customer with appropriate instructions.  In either case, the customer should be provided with any documentation intended to be retained by the owner.

Please see below for additional information in FAQ’s.

________________________________________________________________________________________ Frequently Asked Questions:

1. Q: How much time will the installation take and how much of that time will be permitted to be recovered?
   A: The general consensus for the installation of the etching kits is that regardless of the vehicle no more than 3 tenths of an hour should be charged.    The legislation only applies to new motor vehicle sales so rust and debris should not be an issue.  This process can be completed prior to final retail delivery when performing the inspection and completing the PDI.  This labor cost can be recovered by itemizing it on the vehicle’s bill of sale in addition to the cost of the etching kit.
   
   
2. Q: Will there be any special or new language required on dealer invoicing when they sell these kits?
   A: No specific language will be required; however, the invoice should clearly indicate what the consumer is paying for. The kit installation shall be itemized separately with the cost of the kit as one item and the cost of the labor to install as another. The invoice should not indicate that catalytic converter etching is a DMV requirement.
   
   
3. Q: Is there insurance discounts for consumers who have their vehicle’s converter(s) etched? 
   A: This is not a DMV decision. The Department of Financial Services regulates the Insurance Industry.
   
   
4. Q: Since dealers are required to sell at cost, are these etching kit transactions taxable?
   A: Yes.
   
   
5. Q: Will there be some required or specific language from DMV if dealers (or associations) create signage to encourage cat etch kit purchase?
   A: No. New signage will not be required.  However, DMV will review proposed signage if requested.
   
   
6. Q: If a catalytic converter that is etched and serialized is believed to be stolen what are my next steps?
   A: The department strongly recommends that any etched catalytic converter is checked on ISRcodecheck.com.  Anyone who has reason to believe the catalytic converter is stolen should not take possession of the part and contact law enforcement immediately.
   
   
7. Q: Will RVs, Motor homes, Heavy trucks, etc. be required under this program?
   A: No. Vehicle and Traffic Law Article 16, Section 415(1)(f) defines the term “new motor vehicle” as the following: a new motor vehicle shall include only those motor vehicles commonly classified as a passenger automobile, sport utility vehicle, light truck, pickup truck, van, minivan, or suburban, with a gross vehicle weight rating of ten thousand pounds or less. However, nothing in the legislation prohibits a dealer from offering this service to purchasers of these vehicles.
   
   
8. Q: Will catalytic converters replaced outside of any warranty require any additional documentation?
   A: Under Repair Shop regulation section 82.5(d) The consumer has the right to retain the old part. Assuming the consumer declines to keep the old part, there has been no change in the requirements for transferring major component parts.
9. Q: Does DMV anticipate this cat kit installation being required to be installed on all new incoming vehicles shipped to dealers for sale?
   A: No. This legislation does not require the installation of etching kits. The legislation simply requires the etching kit be offered to the purchaser of a new motor vehicle.
   
   
10. Q: What if the consumer wants to purchase the kit and self-install it?
    A: The kit must be sold to the consumer.
    
    
11. Q: Does this law apply to used vehicles sales?
    A: No, but you may and in turn follow the same procedures outlined above.
    
    
12. Q: If during the sales process the customer says yes to an etching kit, is the dealer obligated to install the kit prior to delivery?
    A: No. This legislation does not require the installation of etching kits. The legislation simply requires the etching kit be offered to the purchaser of a new motor vehicle.  If the purchaser agrees to and is billed for installation the kit should be installed prior to delivery.
    
    
13. Q: Are dealers required to offer the kits to lessees of new vehicles or only buyers?
    A: The legislation requires the etching kit to be offered to the purchaser of a new motor vehicle.  In the case of a lease, it is acceptable to offer the etching kit to either the lessee or the lessor.
    
    
14. Q: If the manufacturer assigns serial numbers to catalytic converters on new motor vehicles prior to the dealer receiving the vehicle does the dealer still need to offer the etching kit?
    A: Currently we are not aware of any manufacturers that are etching catalytic converters prior to the vehicle being received by the dealer.
    
    
15. Q: If a vehicle has a catalytic converter located within the engine bay area should it be considered part of the converters subject to etching?
    A: All catalytic converters equipped on a vehicle are addressed by the legislation and the appropriate etching kit should be offered to the vehicle purchaser.  Etching kits are available with single, dual, and quad labels and all labels within the kit will have the same serial number.
    
    
16. Q: What constitutes an “offer” of the kit to a customer?  Is the posting of a sign notifying the customer the kit is available sufficient?
    A: The posting of a sign alone is insufficient, but dealerships are not precluded from posting signs as an extra step to increase awareness. Dealers are encouraged, but not required, to include documentation of the offer electronically or in writing as part of the purchase process.

If you have any questions regarding these changes to the VTL, please contact the Technical Services Unit by telephone at [phone] (select option #4).

Please share this information with all appropriate staff.  Thank you.