California Car Buyer’s Bill of Rights
Whether your shopping for Los Angeles auto loans, San Francisco auto loans or auto loans in any of the smaller cities or towns, California consumers have protections afforded them under a new law commonly referred to as the California Car Buyer’s Bill of Rights. Taking effect on July 1st, 2006 this new law impacts the purchase of new and used vehicles from licensed California car dealers. Key covenants include:
For new and used car buyers:
Dealers must provide an itemized price list for items such as warranties and insurance, etc., if the items are being financed. Further, 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. Finally, dealers must provide buyers with their credit score and an explanation of how it is used.
For used car buyers only
Consumers purchasing a used car for less than $40,000 must have an opportunity to purhase a two-day Contract Cancellation Option Agreement. The cancellation fee varies between $75 and $400 depending on the value of the vehicle. Should you decide to return the car, the dealer may charge you a re-stocking fee of between $175 and $500. If you return a car under the option, you are entitled to a full refund, including sales tax, registration fees, and deposits or trade-ins. Visit the California DMV site at www.dmv.ca.gov for more information.
The law also requires greater disclosure of the purchase price of items commonly included in the monthly payment. 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 service contracts, insurance products, debt cancellation agreements and Contract Cancellation Options. No charges may be added to the contract without full disclosure and without your consent. The document must advise you of the cost of the monthly installment payments with and without items listed.
The law specifies fee caps for California auto financing. If a dealer obtains a California auto loan on your behalf, the dealer’s California auto finance fees are limited to no more than: 2 percent of the purchase amount for contracts with a term of more than 60 months; or 2.5 percent of the purchase amount for contracts with a term of 60 months or less. This limitation does not apply when the dealer bears all the risk of financial performance (buy-here-pay-here) or when the loan origination falls more than six months after the date of the vehicle sale contract.
Written disclosure about your consumer credit score. Dealers must provide you a “Notice to Vehicle Credit Applicant” which discloses: The credit score obtained and used by the dealer and the name of the credit reporting agency providing the credit score; The range of possible credit scores established by the credit reporting agency that provided the credit score; and the address and phone number of each credit reporting agency providing a credit score.
Considering auto loans California or otherwise, run the numbers!
Auto loans Los Angeles, auto loans San Francisco or anywhere in California, run the numbers: Use our California Auto Loan Calculator
Know your California auto loan payment amount: Try our California Auto Payment Calculator
Auto loans Sacramento or auto loans San Diego, you'll want to estimate your California auto loan rate: Try our California Auto Loan Rate Estimator Disclosure: We developed the content for SmartCarCredit™ while working with automotive industry clients. We hope you find it helpful in making informed decisions. While we believe the information to be accurate, we do not guarantee its accuracy.
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