CAR BUYERS’ BILL OF RIGHTS ACT

Section 1: Title.

This measure shall be known and may be cited as the
"Car Buyers’ Bill of Rights."

Section 2: Findings and Declarations

The people of the State of California find and declare as follows:

(a) Consumer spending accounts for approximately two-thirds of economic activity in America, and particularly in times of economic hardship, consumers tend to be the sole pillar sustaining our national and state economies. It is vitally important for the health of California’s economy that consumers have confidence in the fairness of the marketplace, especially when it comes to making important decisions, like buying a car.

(b) For most Californians, owning a car is a necessity of life. Buying a used car is also a major expense. Unlike many other products consumers buy, however, they do not have the right to return a used car within three days of purchase. There is no "cooling-off period," even when a consumer has been subjected to high-pressure sales tactics, or been worn down by lengthy negotiations. It is often extremely hard to get a refund for a used car, even if it falls apart when the buyer drives it off the car lot, or if it has hidden defects the salesperson failed to disclose. As with many other products, consumers should have the right to return a used car within three days of purchase for a full refund, minus a reasonable charge for mileage.

(c) Car dealers often impose a hidden charge when they arrange loans for car buyers. They impose this extra charge by arranging car loans at a higher interest rate than the rate the consumer actually deserves, based on his or her credit history. In exchange for raising the interest rate, the dealers receive a kickback from lenders. The higher the buyer’s interest rate, the more profit the dealer makes on the financing. This hidden, excessive charge affects many car buyers, even those with good or excellent credit. Sometimes, the charge adds hundreds or thousands of dollars to the cost of financing a car. Car dealers should be required to disclose a buyer’s credit score and the lowest interest rate for which the buyer qualifies, and dealers should be prohibited from charging more than $150 for arranging a loan.

(d) Many car dealers sell "certified" used cars that they claim have been thoroughly inspected and are a cut above other used cars. They charge a premium for these vehicles. Some of these so-called "certified" cars, however, are actually badly damaged total loss "salvage" cars, or lemons repurchased under the lemon law. Some are unsafe vehicles, known as "chop jobs," that have been patched together with parts from different scrapped vehicles and improperly welded together. Other "certified" used cars have been driven a high number of miles and have had their odometers rolled back. According to the Federal Bureau of Investigation (FBI), odometer fraud is one of the leading property crimes in the nation. Some "certified" used cars are rental cars, taxicabs, or police cars that have been driven into the ground, wrecked, or poorly repaired, while others are "gray market" cars that fail to meet U.S. standards. Car dealers should be prohibited from advertising or selling these defective automobiles as "certified" used cars, and "certified" used cars should be inspected by qualified technicians prior to sale.