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"CA. Car Buyers' Protection Act": Protection or Red Tape

by Susannah Kopecky, published

The California Car Buyers' Protection Act of 2009, appears to protect car buyers; however, it may, by extension, end up hurting car buyers. By presenting greater leeway to punish auto sellers, if fewer auto dealers are willing to sell cars in California and become more risk-averse, buyers may be adversely affected, as well.

The bill would "make it unlawful for a dealer who purchases a used vehicle with a balance due to a secured party to fail to pay off the entire balance prior to transferring or selling the vehicle and would increase he amount of a dealer's bond from $50,000 to $100,000."

Primarily, the bill seeks to ensure that car dealers are not unduly selling cars with hidden debts, and seeks to protect those deemed most at-risk when trading in and selling cars. However, if a car buyer can prove (or at least claim) that they were "deceived" by a car seller, this bill may provide steadier ground for buyers to bring action "against the dealer, his or her salesperson, and the surety upon the dealer's bond for actual damages plus any incidental and consequential damages."

The impetus for the bill is explained as such: "During the past year at least 480 new and used licensed auto dealerships have gone out of business in California, far more than in any other state, and it is project that the numbers will continue to accelerate for the foreseeable future," and while "the current federal assistance fails to provide any relief for car buyers, while providing taxpayer dollars to assist the auto manufacturers, dealers, and workers who are seeking assistance from the American public... it is ultimately car buyers who will determine the fate of our domestic auto industry by buying cars."

A number of high profile California agencies, including the California Statewide Law Enforcement Association and Consumers for Auto Reliability and Safety, have expressed optimism and support for the bill.

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