BILL ANALYSIS Ó
AB 1534
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1534 (Wieckowski)
As Amended August 24, 2012
Majority vote
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|ASSEMBLY: |42-32|(May 29, 2012) |SENATE: |23-10|(August 29, |
| | | | | |2012) |
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Original Committee Reference: JUD.
SUMMARY : Requires buy-here-pay-here dealers to affix a label
displaying the reasonable market value of the vehicle on every
used car for sale. Specifically, this bill :
1)Defines "buy-here-pay-here dealer" (BHPH dealer) to mean an
automobile seller who does both of the following:
a) Enters into conditional sale contracts (within the
meaning of Civil Code Section 2981(a)) or lease contracts
(within the meaning of Civil Code Section 2985.7(d)) and
subject to specified provisions of Title 14 of Part 4 of
Division 3 of the Civil Code governing vehicle sales
financing and leasing, except that a "conditional sale
contract" does not include a contract for the sale of a
motor vehicle if all amounts owed under the contract are
paid in full within 30 days.
b) Assigns less than 90% of all unrescinded conditional
sale contracts and lease contracts to unaffiliated
third-party finance or leasing sources within 45 days of
the consummation of those contracts.
2)Provides that the term "buy-here-pay-here dealer" does not
apply to either of the following:
a) A lessor who primarily leases vehicles that are two
model years old or newer; or,
b) A dealer that certifies 100% of its vehicles pursuant to
Vehicle Code Section 11713.18 and that maintains an on-site
service and repair facility that is licensed by the Bureau
of Automotive Repair and employs a minimum of five master
automobile technicians who are certified by the National
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Institute for Automotive Service Excellence.
3)Requires a BHPH dealer to affix a label on any used vehicle
being offered for sale that states the "reasonable market
value" of that vehicle, defined as the average retail value
based on the condition, mileage, year, make, and model of the
vehicle as determined within the last 60 days by a nationally
recognized pricing guide.
4)Requires the above label to meet all the following conditions:
a) Be in writing with a heading that reads "REASONABLE
MARKET VALUE OF THIS VEHICLE" in at least 16-point bold
type and text in at least 12-point type.
b) Be located adjacent to the window sticker identifying
the equipment provided with the vehicle, or if none,
located prominently and conspicuously on the vehicle.
c) Contain the information used to determine the reasonable
market value, including, but not limited to, use of a
nationally recognized pricing guide for used vehicles, and
the date the reasonable market value was determined.
d) Indicate that the reasonable market value is being
provided only for comparison shopping and is not the retail
sale price or the advertised price of the vehicle.
5)Requires a BHPH dealer to provide to a prospective buyer a
copy of any information obtained from a nationally recognized
pricing guide that the dealer used to determine the reasonable
market value of the vehicle.
6)Defines "nationally recognized pricing guide" as including,
but not limited to, the Kelley Blue Book, Edmunds, the Black
Book, or the National Automobile Dealers' Association (NADA)
Guide.
The Senate amendments revise the definition of
"buy-here-pay-here dealer" and exempt dealers from that
definition if they primarily lease vehicles that are two model
years old or newer, or meet higher benchmarks of vehicle
certification and providing service and repair, as specified.
In addition, the amendments correct a drafting error.
AB 1534
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AS PASSED BY THE ASSEMBLY , this bill was substantially similar
to the version approved by the Senate.
FISCAL EFFECT : According to the Senate Appropriations
Committee:
1) Increased enforcement costs of $91,000 (Motor Vehicle
Account) to the Department of Motor Vehicles (DMV) in
2012-13; ongoing costs of $157,000 thereafter.
2) Minor ongoing costs to the Judicial Branch of less than
$10,000 (General Fund) annually for 100 new infraction
filings, offset to a degree by fine revenue.
COMMENTS : The author explains that the bill is needed to
protect consumers from predatory sales practices reportedly
employed by unscrupulous used car dealers, particularly those of
the so-called "buy here, pay here" variety. As recently
amended, the bill's definition reflects the same definition also
employed by two other pending pieces of legislation, SB 956
(Lieu) and AB 1447 (Feuer).
This bill requires BHPH dealers to affix a label to every used
car for sale that states the reasonable market value of the
vehicle, as determined within the last 60 days by a nationally
recognized pricing guide (e.g., Edmunds or Kelley Blue Book).
Unlike new cars, which since 1958 have been required to display
a manufacturer's suggested retail price (MSRP) sticker, there is
no such requirement for used cars. This disparity, the author
contends, allows some BHPH dealers to set the price for a car
based on information determined after running the customer's
credit report, or otherwise drastically overprice a used vehicle
for low-income consumers who cannot afford a new car but are
particularly compelled to obtain a car for everyday needs.
According to the author, a label displaying the reasonable
market value of the vehicle will help protect consumers from
unfair pricing.
In support of the bill, Consumer Action reports that it
"receives numerous complaints from car buyers who needlessly
overpay by thousands of dollars because they trust the verbal
promises of car salesmen who assure the buyer that the vehicle
is fairly priced. Only after the sale do they learn that the
dealer's pricing was far higher than the vehicle's genuine
value." Proponents contend that this bill offers a reasonable
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solution to help protect consumers against abusive pricing
practices by BHPH dealers, especially in situations where the
consumer has no third-party information to compare to an asking
price represented by the dealer to be fair.
Analysis Prepared by : Anthony Lew / JUD. / (916) 319-2334
FN:
0005704