California Car Buyers Bill of Rights

SACRAMENTO---On July 26, Governor Arnold Schwarzenegger finally signed the Car Buyers Bill of Rights into law. However, it won't take effect for nearly a year--not until July 1, 2006. The Governor acted under pressure, because if he had not signed the legislation, a stronger, more pro-consumer initiative that was wildly popular with California voters would have appeared on the next statewide ballot.

AB 68, authored by Assemblymember Cindy Montañez, is a compromise measure that was negotiated by key lawmakers and auto dealers, with input from consumer advocates. It is weaker than the initiative that was proposed, but it will still be a step forward for consumer protection in California. It passed in both the Senate and Assembly with strong bi-partisan support.

All of the provisions are new and groundbreaking, and will require close monitoring to evaluate how they operate in the real world. One of the major questions is whether the Department of Motor Vehicles will fulfill its job of enforcing many of the provisions, which are located in the Vehicle Code, and therefore will depend largely on the DMV to ensure they work as intended, to protect consumers.

The new law is not scheduled to take effect until July 1, 2006. This is unusual, since most laws take effect January 1.

Major new changes:

• Two-day return option for used cars

Auto dealers must offer used car buyers the choice to obtain a two-day return option. The option will be available even if the car is being sold “as is”--without a warranty. Vehicles costing more than $40,000, off-road vehicles, and motorcycles are excluded. Dealers may charge varying amounts for the option, depending on the price of the car, and can also charge an additional restocking fee upon return. Any charge for the return option must be credited toward the restocking fee. Consumers may return vehicles for any reason. Vehicles must be returned in “the same condition, normal wear and tear excepted” unless the vehicle had a problem not caused by the buyer. Dealers must allow buyers to drive the vehicles at least 250 miles during the 2 days.

• Sample charges

If the vehicle’s cash price is less than $5,000, the dealer may charge up to $75 for the return option, and up to $175 for the restocking fee. If the buyer pays $75 for the return option, that $75 will be credited toward any restocking fee.

If the vehicle’s cash price is more than $10,000 but less than $30,000, the dealer may charge up to $250 for the return option, and up to $500 for the restocking fee.