July 10, 2012 > Bill to protect used-car buyers approved
Bill to protect used-car buyers approved
Submitted By Jeff Barbosa
The California Senate Judiciary Committee approved a bill by Assemblymember Bob Wieckowski (D-Fremont), on July 3, 2012, that improves disclosure and transparency for consumers when purchasing a used car at a "Buy-Here-Pay-Here" lot.
AB 1534 passed the committee on a 3-1 vote. It requires that used vehicles on such lots have a sticker indicating the vehicle's fair market value.
"This is simply not a matter of let the buyer beware," Wieckowski said. "Predatory pricing, harsh default terms and swift repossession practices should not be tolerated in the marketplace. This bill protects vulnerable consumers who are the most at-risk of overpaying for vehicles. Although the 'Buy-Here-Pay-Here' industry wants us to believe they are just helping those with bad credit, the truth is they are offering customers a bad deal that is likely to put them further in debt."
The "Buy-Here-Pay-Here" industry often requires customers to go to the lot and make the car payment. It targets people with bad credit, charges exorbitant interest rates and when customers default, it often re-sells vehicles several times over. It often targets minorities, low-income Californians and military personnel.
New cars have displayed a Manufacturers Suggested Retail Price window sticker since 1958, improving transparency in the car buying transaction. AB 1534 does not restrict the asking or actual sale price of the car but would require dealers to post an approximate value based on any number of freely available vehicle-valuation entities, such as a Kelley Blue Book.
Wieckowski's bill is supported by Consumers for Auto Reliability and Safety, Consumer Action, Silicon Valley Community Foundation, Consumer Federation of California and Center for Responsible Lending.
It is one of three bills focusing on the "Buy-Here-Pay-Here" industry. Sen. Ted Lieu (D-Torrance) and Assemblymember Mike Feuer (D-Los Angeles) are also carrying legislation this year.