Car Buyers Aquire New Rights (cont'd)


Dealers also will now be required to separate the costs of additional products and services such as fabric protection and extended service contracts, which are sometimes included in the monthly cost without customers' knowledge.

"Unfortunately, there are these practices out there, and this bill will go a long way toward ending them," said Brian Maas, lobbyist for the California Motor Car Dealers Assn., which represents new-vehicle dealers across the state.

In addition to those provisions, the law includes a refund opportunity. The period during which a car can be returned for a refund is only two days after purchase, instead of three days as last year's bill would have required. Cars costing more than $40,000 or driven more than 250 miles after the purchase do not qualify for the refund. Dealers can offer more generous terms and some already do.

Instead of being available to all used car customers, as the previous bill would have required, the mandatory refund is an option available only to customers who pay a fee when they close the sale. The maximum cost of the option will range from $75 to $400, depending on the vehicle's value. Dealers can also offer it for free.

The new law's provisions do not apply to motorcycles, recreational vehicles or off-road vehicles.

Some consumer advocates objected that the law's refund provision, in particular, has been watered down. "The dealers figured out a way to make the return option a money maker," said Rosemary Shahan, president of Consumers for Auto Reliability and Safety, a Sacramento-based advocacy group that has lobbied for the law.

Shahan said she was still reluctantly supporting the law, but believes it is inferior to the measure that passed last year, as well as one that was being prepared earlier this year as a ballot initiative. The initiative was dropped after Democratic Assembly leaders and the car dealers association negotiated the compromise.

"This has been diluted," she said. "It still has all the cylinders and all the wheels, but it's not something we're touting as a model" for other states.

Schwarzenegger, who has raised at least $855,000 from car dealers since his 2003 election, praised the measure as an improvement over last year's version, saying that it struck the right balance to meet "consumer needs" and be "fair to car dealers."

"The Car Buyer's Bill of Rights is going to keep one of California's leading retail industries booming and strengthen the consumer faith and trust that is so essential to our vibrant economy," Schwarzenegger said in a statement after a private bill signing, which representatives of car dealers attended. Shahan was excluded from the event.

Car Buyers Acquire New Rights

Another concession that dealers won would allow them to increase from $45 to $55 the fees they charge car buyers to cover the administrative cost of preparing sales documents. Dealers said the increase was needed because of the additional paperwork to be created by the bill, AB 68, which was sponsored by Assemblywoman Cindy Montanez (D-San Fernando). The fee increase is contained in a separate bill, AB 1001, sponsored by Assembly Speaker Fabian Nuñez (D-Los Angeles), which is pending in the Senate.