In 2006, California enacted the Car Buyer’s Bill of Rights, providing significant protections for car buyers. These rights are influencing automotive sales practices nationwide.
This law safeguards individuals purchasing vehicles (cars, trucks, SUVs) for personal use from dealerships in California. It excludes private sales, out-of-state transactions, commercial vehicles, RVs, and motorcycles.
Key Protections:
1. Two-Day Return Option: Used car buyers can now opt for a two-day return period. This allows buyers to have the vehicle inspected, avoid pressure to buy immediately, or reconsider “as is” purchases.
* Limitations: Applies to used vehicles under $40,000 bought from dealerships for personal use. Dealerships can charge a fee (ranging from $75 to $400, plus restocking fees, based on vehicle price). The vehicle must be returned within two days, with fewer than 250 miles driven, and in the same condition as purchased.
2. Trade-Ins: With the two-day return option, dealerships must retain your trade-in until the return period ends. If sold prematurely, you’re entitled to the trade-in’s fair market value or the cancellation agreement price, whichever is higher.
3. Certified Used Cars: The law restricts the “certified pre-owned” label. Dealers can’t market cars with specific issues as certified, ensuring greater transparency.
4. Seller Disclosures: Dealers must provide written disclosures, including:
* The vehicle’s price, excluding extras.
* Individual prices for add-ons like anti-theft systems, fabric protection, extended warranties, and gap insurance.
* Your credit score (if financing through the dealership), which affects interest rates. A higher score usually means lower interest rates.
5. Interest Rate Markup Limits: Dealerships often receive incentives from lenders to increase buyer interest rates. This markup is now capped at 2.5% for loans up to 60 months and 2% for longer loans.
The California Car Buyer’s Bill of Rights aims to create a safer environment for buying used cars from dealerships. Understanding your rights can prevent issues and potentially save you money. Awareness and utilization of these rights are crucial.