July 27, 2005
California Governor Arnold Schwarzenegger has signed a bill giving used car buyers new rights and protections. The California "Car Buyers Bill of Rights" allows buyers a two-day cooling off period to return a used vehicle.
The law also allows dealers to charge a fee for the return option. The cancellation option can cost as much as $250 but permits a buyer to return a used vehicle priced at less than $40,000 to a dealership within two days of the sale, for any reason.
The so-called bill of rights requires dealers to inform car buyers of the lowest finance rate they qualify for, sets standards for cars advertised as "certified," and puts a cap on finance charges that dealers can impose.
The bill also requires detailed disclosures to prevent the practice of "payment packing" which occurs when dealerships include finance and insurance products in a vehicle purchase contract without a customer's knowledge.
Dealerships will be required to make credit scores and their explanations available to consumers. Car dealers must also disclose financing costs for any extras or options added into the contract.
The provisions of the California Car Buyers Bill of Rights take effect July 1, 2006.
