Buy Here, Pay Here is a phrase for used car dealerships in which the company is both the seller and the loan holder . For years, they have operated under the radar, typically selling vehicles to consumers with bad credit at inflated interest rates, making repossessions common. Last fall, the Los Angeles Times ran a three part series on Buy Here, Pay Here dealerships which drew the attention of businesses and government officials.

In a step to protect consumers from these predatory vehicle loans, Gov. Jerry Brown signed into law two bills regulating the practices of Buy Here Pay Here lots. The first bill will require these dealerships to provide warranties on every car they sell in California. The second will require dealers to post fair market values for their vehicles and give customers greater flexibility in making payments. A third bill which would have limited interest rates to 17% plus the federal funds rate, and provide buyers with a fifteen (15) day grace period before repossessing cars for a missed payment, was vetoed by Brown. Brown wrote in his veto message that he was not convinced the evidence merits dealers to be regulated by the Department of Corporations under the California Finance Lender’s Law. He added that if consumers still need more protection once those bills are implemented, he and his administration would work with the Legislature to find an appropriate solution.