First of Two Assembly BHPH Bills Approved By California Senate
SACRAMENTO, Calif. — In what the bill’s author said on Twitter are “strong protections for used-car buyers,” the first of a series of measures aimed at regulating buy-here, pay-here dealers in California received a majority vote from an entire legislative chamber.
After gaining similar support from various committees, the state’s Senate approved AB 1447 on Thursday by a margin of 22-14, prompting the Tweet from Assemblyman Mike Feuer, the bill’s primary sponsor.
Now with Senate approval, the Assembly will have one final vote on whether to push AB 1447 on to Gov. Jerry Brown for it to become law. Complete legislative approval must occur before the end of the month, and Brown has until Sept. 30 to sign or veto the measure.
To recap, some of the regulations Assembly Bill 1447 would create include:
—Require BHPH dealers to provide a limited warranty that covers most major components and lasts for at least 30 days or 1,000 miles.
—Prohibit BHPH dealers from requiring a buyer to make regular payments in person.
—Require BHPH dealers receive written consent from the buyer prior to selling a vehicle with an electronic tracking device.
—Require BHPH dealers to provide notice to the buyer of the presence of ignition shutdown technology in the vehicle and that such technology be set to provide advance warnings to the driver to help avoid stranding drivers.
Meanwhile, the two other BHPH bills working their way through the approval process are SB 956 and AB 1534. Both are set to be read for a third time before the entire chamber, a process that must finish before a vote can take place.
Senate Bill 956 has three main goals:
—Impose first-ever regulations on dealers offering buy-here, pay-here installment loans by requiring them to obtain a California Finance Lender‘s license.
—Limit used-vehicle installment loans to an interest rate of no more than 17.25 percent, which would give California the strongest cap in the nation.
—Change the way BHPH dealers are able to repossess vehicles to include grace periods and make it easier for buyers to reinstate a repossessed unit.
Furthermore, Assembly Bill 1534 received would require a BHPH dealer to display a label on any used vehicle offered for retail sale that states the “reasonable market value” of the unit. The bill would require the label to contain specified information used to determine the vehicle’s reasonable market value and the date the value was determined.
Moreover, AB 1534 would require a BHPH dealer to provide to a prospective buyer of the used vehicle a copy of any information obtained from a nationally recognized pricing guide the dealer utilized to determine the reasonable market value of the vehicle.
When lawmakers returned from their summer recess earlier this month, Larry Laskowski executive director of the the Independent Automobile Dealers Association of California, reiterated his concern about how state legislators still do not have firm classification of what a BHPH dealer is.
“There’s not a definition for a buy-here, pay-here dealer because it’s a business model,” said Laskowski, a dealer for more than 25 years before giving up his independent store to focus on IADAC matters full time.
“It’s not a check box on your DMV application when you’re getting your dealer license that you want to be a buy-here, pay-here dealer. It’s simply a business model,” he continued. “According to the definition they have now, our study says it probably involves 50 percent of the retail dealers just because it’s so broad reaching. Right now they’ve got a big problem with the definition and we don’t have a resolution as of yet.”