Always scrutinize the fine print... twice.
On July 1, 2006, California enacted a significant consumer protection law known as the Car Buyers Bill of Rights. While intended to curb predatory practices by car dealers, the bill has often left consumers more bewildered than protected. This legislation serves as a cautionary tale of what can happen when well-meaning consumer advocacy groups push for unrealistic measures and settle for impractical solutions.
The Car Buyers Bill of Rights includes several notable provisions:
The most impactful aspect of this bill is the cap on interest rate markups for dealer-arranged loans. The legislation limits the markup to 2.5% for loans of 60 months or less and 2% for longer terms. Many reputable dealers had already implemented similar caps voluntarily. Initially, the bill aimed to eliminate these fees entirely, which would have turned the finance department into an uncompensated loan broker.
Originally intended to apply to all car dealers, the 'cooling-off period' is available only to used car buyers. If you're dissatisfied with your new car, you're out of luck. Additionally, the requirement to disclose credit scores seems redundant. If you haven't checked your credit before buying a car, you likely fall into one of three categories: you're wealthy and indifferent, you have impeccable credit, or your credit is so poor that the score is irrelevant.
The fine print reveals that car dealers can charge for the two-day return option. Instead of protecting buyers who feel victimized, this provision has become another profit source for dealerships. For vehicles priced over $10,000, a $500 restocking fee may be charged, provided you return the car within 48 hours, drive less than 250 miles, and meet other stringent conditions. Few people will go through this hassle, even if they're unhappy with their purchase. However, many will pay for the 'concept' of having this right.
When buying a car, it's crucial to deal with people you know and trust. The average car buyer will spend hundreds of thousands of dollars on vehicles over their lifetime. Building relationships with sellers is essential. Do your homework: check the dealer's reputation, consult the Better Business Bureau, and know where you'll be buying the car before you start shopping. Avoid hopping from lot to lot in search of a car that "speaks to you." If cars could talk, they might just tell you to run away.
The Car Buyers Bill of Rights was a well-intentioned but flawed attempt to protect consumers. While it has some beneficial aspects, such as capping interest rate markups, it also has significant shortcomings and loopholes. As always, the best protection is to be an informed and cautious consumer.
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