DMV comes out against rules for auto dealers
Critics see link to governor's campaign cash

John M. Hubbell, Chronicle Sacramento Bureau
Wednesday, August 11, 2004

Sacramento -- When the auto sales industry lined up to oppose Assemblywoman Cindy Montañez's bill to give far-reaching protections for California car buyers, the Southern California lawmaker was hardly shocked: There's plenty in the legislation for dealers to hate.

Among other things, her bill -- which may come before a key Senate committee Thursday -- would allow an unprecedented three-day cooling-off period on the sale of all used autos, bring greater transparency to dealer financing arrangements and provide a legal definition for a "certified" used car.

So when Montañez recently received a letter stating that her legislation "imposes undue influence over the marketplace" and represents "an unfair limitation only on car dealers," she was surprised only to see who sent it: the California Department of Motor Vehicles.

"This is quite shocking, and contrary to the principles of what the DMV is," Montañez, D-San Fernando (Los Angeles County), said recently. "They should be defending the rights of consumers, not the profits of car dealers."

Government watchdogs say they see a clear link between the more than $1 million they calculate Gov. Arnold Schwarzenegger has received in campaign donations from the auto industry and the DMV's opposition to the bill. Despite talk of vanquishing special interests, they say, it shows how money and lobbyists continue to resonate loudly with the governor's office.

"This is the way campaign contributions influence politics," said Doug Heller, president of the Foundation for Taxpayer and Consumer Rights. "You've got your agency coming in, opposing a bill for, at best, kind of weak reasons -- after you've received almost a million bucks from the folks who care so much."

Administration officials dismiss the accusation as, at the least, premature. Schwarzenegger has taken no official position on the bill, spokesman Vince Sollitto said Tuesday.

"It seems pretty clear that Californians know the governor can't be bought and that he does what he thinks is best for California," Sollitto said.


Sweeping in scope

By far, Montañez's bill, AB1839, is the most expansive consumer protection legislation to come before the Assembly since Schwarzenegger replaced Gray Davis as governor.

The cooling-off provision -- which would allow consumers to return a vehicle to a dealer within three days, with a variable restocking fee -- would give buyers a hedge not found elsewhere in the nation. Car dealerships say it could turn them into virtual rental agencies, subject to joyriders and other cheats.

"Who owns the car for the three days? What if they maim somebody? What about trade-ins?" asked Peter Welch, president of the California Motor Car Dealers Association, which represents more than 1,400 dealerships.

With some retailers already offering a three-day return policy, "we think the marketplace is out there for those who want to have that kind of a right," Welch said.

The bill would allow a used car to be called "certified" only if inspected by a qualified technician, whose report would be furnished to a buyer before a sale closed.