If you own or run a car dealership in California, you should be very familiar with California’s Car Buyer’s Bill of Rights, which affects the sale of all retail motor vehicles. It does so by requiring all licensed auto dealers in California to hand over a list of prices for financial items, including insurance and warranties. It also gives buyers their credit scores and explains how the credit score is used.
This information doesn’t apply to motorcycles, motor vehicles that are driven off highways, and sales that occur between private individuals.
Some of the most important provisions of the Car Buyer’s Bill of Rights are:
- Consumer credit score disclosure: Before an auto dealer uses a consumer’s credit scores for any purpose, the dealer has a legal obligation to provide the consumer with a Notice to Vehicle Credit Applicant, which is a written document. This document lists each credit score that has been acquired and used by the dealer. The credit document contains the entire credit history of the consumer and states whether the consumer has paid their debts on time. The dealer will also generate the consumer’s credit scores in a bar graph.
- Auto financing fee limits: If you are able to finance an auto through the dealer, the dealer will be paid no more than 2% of the amount of the purchase and the contract will be for more than 60 months or 2.5% of the purchase price for a term of less than 60 months.
- Disclosure of the purchase price for items that will be included in the monthly payment of the vehicle: The items that must be disclosed are a service contract, insurance, gap insurance, device to deter theft, surface protection of the vehicle and an option to cancel the contract. The dealer is not allowed to add extra charges to the contract without informing and obtaining the consent of the consumer first. The document is required to state the cost with and without a list of the items.
What happens if a customer wants to return the vehicle?
If you have purchased a vehicle from the dealer and wish to return it, the following conditions apply to the buyer. The buyer must return the vehicle:
- In its entirety
- To the dealer where they purchased it by the close of business within two days unless the contract states otherwise.
- Within the mileage that is allowed by the contract.
- With all original receipts for the sale and contract cancellation option.
- In the same condition as it was in when the buyer took possession of the vehicle.
- Without liens with the exception of what was created by the contract.
Attorneys with experience representing auto dealerships help their clients to understand how the law applies to the unique facts of each case.