Used Car Shoppers Granted Expanded Protections Under New California Laws

Starting January 1, 2010 California used car buyers will have new legal protections on their side in dealing with used vehicle dealers. That’s when two new laws, Assembly Bill 647 and State Senate Bill 95 (known as the California Car Buyers Protection Act) will require used car dealers to pay off any outstanding liens prior to selling or trading any pre-owned vehicles.

Assembly Bill 647 also provides potential used car and used truck buyers access to an online national database of title transfers, theft reports and other information on used vehicles.

Both bills were supported by law enforcement officials and consumer protection groups.

According to State Senator Ellen Corbett (D-San Leandro, CA) the California Car Buyers Protection Act will help used car buyers who are already struggling as a result of the economic downturn.

Corbett said, "This law will give consumers confidence that they will be protected when they purchase or trade in a vehicle."

She said that scores of new and used car dealerships have closed due to the current economic climate, leaving consumers with unpaid liens on the used cars they traded in. In some cases the problems were compounded by second loans on vehicles purchased at the dealerships.

Senate Bill 95 requires that dealers pay all outstanding liens on trade-ins before reselling the vehicles and that the payoff be made within 21 days of the dealer receiving the trade-in.

President of Consumers for Auto Reliability Rosemary Shahan said the new legislation "will help law enforcement agencies crack down on violations before hundreds of car buyers have their credit ruined at a single dealership."

Assemblywoman Mariko Yamada (D-Davis, CA) who authored Assembly Bill 647 said it will require the state’s Department of Motor Vehicles to comply with federal law and will allow consumers to access the National Motor Vehicle Title Information System (NMVTIS) online to research title transfer histories of used cars and trucks nationwide.

NMVTIS is maintained by the U.S. Department of Justice and allows state and local law enforcement, government agencies and consumers to access and exchange title information as well as data on pre-owned vehicles that have been stolen, junked, salvaged or been repaired due to damages received in floods and collisions.

California is currently the only state that provides information to NMVTIS but denies consumers access to the database. Supporters of the new legislation pointed out that six of the state’s major metropolitan areas, San Diego, Modesto, Bakersfield, Stockton, Fresno and San Francisco-Oakland, rank among the nation’s top 10 in per-capita auto theft.

Yamada also points out that California residents have been forced to pay $29.99 in order to obtain vehicle histories from vendors. She said that amount is "nearly 10 times more than a state- issued report would cost."

She said, "As more people look to buy used cars during this financial downturn, this legislation gives California car buyers access to life-saving data at a competitive price."

The U.S. Department of Justice predicts that the NMVTIS could save consumers between $4 billion and $11.3 billion annually by reducing auto theft, odometer and salvage fraud and other related crimes once the database achieves full participation by all 50 states.

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