Senator Ellen M. Corbett's Car Buyer's Protection Act becomes law
California Political Desk
October 13, 2009
SACRAMENTO – Senator Ellen M. Corbett (D-San Leandro) announced the Governor has signed the Car Buyer´s Protection Act into law. The bill requires car dealers to pay off a lien on a car before it is sold or traded. Dealers will have 21 days to make that payment.
"Many consumers across the state found themselves in dire fiscal straights through no fault of their own," said Senator Corbett. "This law will give consumers confidence that they will be protected when they purchase or trade-in a vehicle."
The bill will become law on Jan. 1, 2009.
As dealerships close their doors, they have been leaving consumers with unpaid liens on vehicles they traded-in, as well as a second loan on the newer vehicle they purchased at the dealership. Too often the consequence is destruction of consumer credit, repossession of the vehicles, job losses due to the lack of transportation to get to work, and consumers being forced into bankruptcy.
When dealerships go out of business they not only fail to pay off liens, but also fail to honor warranties, service contracts, and other services for which car buyers have paid in advance, costing car buyers millions of dollars and eroding consumer confidence.
The California Car Buyers Protection Act does the following:
Requires dealers to pay outstanding liens on traded-in vehicles before they trade or sell the vehicle; and this must occur within 21 days.
Increases by $25 the annual dealers´ license fee. And increases by $50 the fee for an auto-broker´s endorsement to a dealer´s license.
Directs a portion of the dealer license fee to be used by the Department of Motor Vehicles to investigate noncompliance of dealers and retail leasers with state licensing requirements.
"Many consumers across the state found themselves in dire fiscal straights through no fault of their own," said Senator Corbett. "This law will give consumers confidence that they will be protected when they purchase or trade-in a vehicle."
The bill will become law on Jan. 1, 2009.
As dealerships close their doors, they have been leaving consumers with unpaid liens on vehicles they traded-in, as well as a second loan on the newer vehicle they purchased at the dealership. Too often the consequence is destruction of consumer credit, repossession of the vehicles, job losses due to the lack of transportation to get to work, and consumers being forced into bankruptcy.
When dealerships go out of business they not only fail to pay off liens, but also fail to honor warranties, service contracts, and other services for which car buyers have paid in advance, costing car buyers millions of dollars and eroding consumer confidence.
The California Car Buyers Protection Act does the following:
Requires dealers to pay outstanding liens on traded-in vehicles before they trade or sell the vehicle; and this must occur within 21 days.
Increases by $25 the annual dealers´ license fee. And increases by $50 the fee for an auto-broker´s endorsement to a dealer´s license.
Directs a portion of the dealer license fee to be used by the Department of Motor Vehicles to investigate noncompliance of dealers and retail leasers with state licensing requirements.
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