A trio of bills aimed at preventing abuses in the sale of high-mileage vehicles by Buy Here Pay Here used-car dealers appears to be winning strong bipartisan support and heading toward the governor’s desk.
Legislation by Assemblyman Mike Feuer (D-Los Angeles) won final passage Monday and was sent to Gov. Jerry Brown, who has 30 days to sign or veto it. Feuer’s bill, AB 1447, requires the seller to provide a one-month or 1,000-mile written warranty to a buyer.
On Tuesday, a companion measure, SB 956 by Sen. Ted Lieu (D-Torrance), was passed by the Assembly and returned to the Senate for one last action before the Legislature’s scheduled adjournment Friday night.
Lieu’s bill would require Buy Here Pay Here dealers to register with the state as lenders and would cap the interest rate dealers could charge at 17% plus the federal funds rate, now 0.25%.
It also would require dealers to disclose any GPS tracking devices they install on vehicles and wait 15 days after the due date of a payment before repossessing vehicles from delinquent borrowers.
A third bill, AB 1534 by Assemblyman Bob Wieckowski (D-Fremont), remained on the Senate floor at the close of Tuesday’s session and still must return to the Assembly before going to the governor. That bill, AB 1534, would require dealers to post fair-market valuations on every car. The posted value is a response to the high mark-ups that some Buy Here Pay Here dealers put on cars that often are more than a decade old.
Brown, so far, has not taken a public position on any of the three proposals.
The bills would impose numerous regulations on the dealers, which sell — and often resell — high-mileage used cars to buyers who have shaky credit but need vehicles to drive to work. Such dealers offer their own financing rather than using outside lenders, as conventional dealerships do.
Buy Here Pay Here lots charge interest rates that can top 30% and demand large down payments on high-mileage cars. Many dealers make a habit of repossessing and reselling the same cars multiple times.
Dealers opposing the bill contend that compliance with the proposed legislation could prove too costly and put hundreds of dealers out of business, depriving local governments of much-needed sales tax revenues.