California’s Car Buyers Bill of Rights, which took affect July 01, 2006, has changed the way vehicles are bought and sold in California. Even though the law has been in affect for almost seven years many consumers still may not be fully aware of all their rights. The law affects retail vehicle sales handled by licensed car dealers in California and does not apply to motorbikes, off road vehicles or private sales. Some of its protections include:

For new and used car buyers:

• The dealer must provide a document indicating the price of specified items purchased and the effect of those items on installment payments. Items requiring disclosure include a service contract, an insurance product, a debt cancellation agreement, a theft deterrent device, a surface protection product, and a vehicle Contract Cancellation Option Agreement. The document must advise consumers of the cost of the monthly installment payments with and without items listed.
• Dealer compensation from an institution financing the purchase of a vehicle is limited to no more than 2 percent for a loan term over 60 months and 2.5 percent for a loan term of 60 months or less. This rule does not apply when the dealer bears the entire financial risk or when the assignment is more than six months after the date of the conditional sale contract.
• Dealers must provide buyers with their credit score and an explanation of how it is used.

Only for used car buyers:

• Consumers will be given the option to purchase a two day sales contract cancellation option that will be determined by the price of the vehicle being bought. This does not apply to used cars priced at $40,000 or more, private party sales, motorcycles, off-road vehicles, recreational vehicles, or vehicles sold for business or commercial use. This allows buyers to have the vehicle properly inspected by a mechanic, for those who are purchasing a car “as is,” or for those car buyers who might have given in to the pressure to buy on the spot. If the consumer does return the vehicle, the dealer is allowed to charge a restocking fee determined according to the price of the vehicle. (If a contract cancellation fee was charged, it will be deducted from the restocking fee.)
• Used cars advertised as “certified” must meet specific requirements. The dealer must perform a complete inspection of the vehicle and provide potential buyers with a copy of the inspection report. If the vehicle cannot be certified it is a good idea to inquire as to why.

If the dealer fails to comply with the Car Buyer’s Bill of Rights, you may complete and mail a Record of Complaint Form (INV 172A) to the Department of Motor Vehicles. The form is available on the Internet at www.dmv.ca.gov, you can call 1-800-777-0133 to have it mailed to you, or you can pick it up at your local DMV field office.

This is only a summary of the law. DMV, law enforcement, and the courts follow the full and exact language of the law contained in the California Vehicle Code and Civil Code.