“CA. Car Buyers’ Protection Act”: Protection or Red Tape

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.