Normal
0
false
false
false
EN-US
X-NONE
X-NONE

/* Style Definitions */
table.MsoNormalTable
{mso-style-name:”Table Normal”;
mso-tstyle-rowband-size:0;
mso-tstyle-colband-size:0;
mso-style-noshow:yes;
mso-style-priority:99;
mso-style-qformat:yes;
mso-style-parent:””;
mso-padding-alt:0in 5.4pt 0in 5.4pt;
mso-para-margin-top:0in;
mso-para-margin-right:0in;
mso-para-margin-bottom:10.0pt;
mso-para-margin-left:0in;
line-height:115%;
mso-pagination:widow-orphan;
font-size:11.0pt;
font-family:”Calibri”,”sans-serif”;
mso-ascii-font-family:Calibri;
mso-ascii-theme-font:minor-latin;
mso-fareast-font-family:”Times New Roman”;
mso-fareast-theme-font:minor-fareast;
mso-hansi-font-family:Calibri;
mso-hansi-theme-font:minor-latin;}

SACRAMENTO, Calif. — As a California Senate bill to regulate
buy-here, pay-here dealers received approval by the Assembly's Banking and
Finance Committee, lawmakers made significant changes to a measure originally
started in the Assembly.

Earlier this week, legislators amended a major section of AB
1447, the segment detailing requirements for a vehicle warranty. Members of the
Senate Judiciary Committee will consider the revamped AB 1447 during its next
gathering on July 3.

According to the latest update on the California legislature's
website, if AB 1447 becomes law BHPH dealers must provide the buyer or lessee a
written warranty with a minimum duration of at least 30 days or 1,000 miles.

The bill amendment said the BHPH dealer shall either repair
the vehicle to conform to the written warranty, reimburse the buyer or lessee
for the reasonable cost of repairs or cancel the sale or lease contract and
provide the buyer or lessee with a full refund, less a reasonable amount for
any damage sustained by the vehicle after the sale or lease, excepting damage
caused by any nonconformity with the written warranty.

Furthermore, legislators added in the bill amendment that
the written warranty means BHPH dealers will pay 100 percent of the cost of
labor and parts for any repairs pursuant to the warranty, and they may not charge
the buyer or lessee for the cost of repairs or for inspecting the vehicle,
tearing down the engine or transmission or other part, or for any deductible.

"The buy-here, pay-here dealer or its agent may elect to
refund the buyer or lessee a full refund, less a reasonable amount for any damage
sustained by the vehicle after the sale or lease, except damage caused by any
nonconformity with the written warranty, rather than performing a repair," the
bill amendment now reads.

In the event the dealer chooses that route, several other
conditions come into play, including:

—The BHPH dealer shall given written notice to the buyer or
lessee of the election to cancel the sale or lease by personal delivery or
first-class mail.

—The buyer or lessee shall return the vehicle in
substantially the same condition as when it was delivered by the dealer,
reasonable wear and tear and any nonconformity with the written warranty
excepted.

—The dealer  provide
the buyer or lessee with a receipt stating all of the following: the date the
vehicle was returned, the vehicle identification number, the make, year, and
model, the odometer reading at the time that the vehicle was returned, a
statement that the dealer has canceled the sale or lease, the amount of the
buyer's or lessee's refund

—The BHPH dealer shall not treat the return of the vehicle
pursuant to the contract cancellation provisions of this subdivision as a
repossession.

—The buyer or lessee shall execute the documents necessary
to transfer any interest in the vehicle to the dealer or to remove the buyer or
lessee from any registration or title documents.

—The BHPH dealer shall refund to the buyer or lessee, no
later than the day after the day on which the buyer or lessee returns the
vehicle and the notice of election to cancel is given to the buyer or lessee,
all amounts paid under the sale or lease agreement, less a reasonable amount
for property damage sustained by the vehicle after the sale or lease, excepting
damage caused by any nonconformity with the warranty.

Furthermore, lawmakers emphasized this written warranty should
cover at least the following components:

—Engine, including all internally lubricated parts
—Transmission and transaxle
—Front and rear wheel drive components
—Engine cooling system
—Alternator, generator, starter, and ignition system, not including the
battery|
—Braking system
—Front and rear suspension systems
—Steering system and components
—Seatbelts
—Inflatable restraint systems installed on the vehicle as originally manufactured
—Catalytic converter and other emissions components necessary for the vehicle
to pass a California emissions test
—Heater
—Seals and gaskets

"The buy-here, pay-here dealer shall make the repair or provide
a refund notwithstanding the fact that the warranty period has expired if the
buyer or lessee notified the buy-here, pay-here dealer of the failure of a
covered system or part within the warranty period," the bill now reads.

"If a buy-here, pay-here dealer fails to give a buyer a
written warranty pursuant to this section, the buy-here-pay-here dealer shall be
deemed to have provided the warranty as a matter of law," the bill continues.

SB 956 Gains Assembly Committee Approval

Also earlier this week, the Assembly's Banking and Finance Committee
by a 7-2 vote approved SB 956, which has three main goals:

—Impose first-ever regulations on dealers offering buy-here,
pay-here installment loans by requiring them to obtain a California Finance
Lender's license.

—Limit used-vehicle installment loans to an interest rate of
no more than 17.25 percent, which would give California the strongest cap in
the nation.

—Change the way BHPH dealers are able to repossess vehicles
to include grace periods and make it easier for buyers to reinstate a
repossessed unit.

According to a report in the Los Angeles Times, Jose Miguel
Camacho, a BHPH dealer in Lancaster, Calif., attempted to defend the industry.

"We help these people even though they are super risky. We
are a last-chance lender," Camacho said during committee testimony on Monday in this published report.

Now with SB 956 passing through the Banking and Finance
Committee, it's up for consideration by the Assembly's Judiciary Committee on
July 3.

"Without the protections promised by SB 956, consumers are
paying the price — often an exorbitant price," stated Sen. Ted Lieu, the bill's
author.