For California Car Buyer only!

Car Buyer's Bill of Rights - Important Facts About A New Law That Substantially Impacts The Purchase Of New And Used Vehicles
Car Buyer’s Bill of Rights
A new law establishing the Car Buyer’s Bill of Rights substantially impacts the purchase of new and used vehicles. The law, which takes effect July 1, 2006, affects retail vehicle sales handled by licensed car dealers in California. This law does not apply to motorcycles and off-highway motor vehicles or to transactions between private parties. Major changes 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.
• 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.
• Dealers must provide buyers with their credit score and an explanation of how it is used.

For used car buyers only

• A used car buyer may obtain a two-day sales contract cancellation option.
• Used cars advertised as “certified” must meet specific requirements.

Used car buyers may purchase a two-day sales contract cancellation option.
There is no “cooling off” period unless you obtain a contract cancellation option. Consumers who purchase a used car for less than $40,000 must be given an opportunity to purchase a two-day Contract Cancellation Option Agreement.
Important: The contract cancellation option does not apply to used cars priced at $40,000 or more, new cars, private party sales, motorcycles, off-road vehicles, recreational vehicles, or vehicles sold for business or commercial use.
Cancellation option specifics
The following indicates how much you can expect to pay if you choose to purchase the contract cancellation option:

• $75 for a vehicle costing $5,000 or less;
• $150 for a vehicle costing more than $5,000, but not more than $10,000;
• $250 for a vehicle costing more than $10,000, but not more than $30,000; or
• One percent of the purchase price for a vehicle costing more than $30,000, but not more than $39,999.99

If you choose to return the vehicle, within the time specified, the dealer can charge a maximum restocking fee of:

• $175 for a vehicle costing $5,000 or less;
• $350 for a vehicle costing more than $5,000, but less than $10,000; or
• $500 for a vehicle costing $10,000 but less than $40,000.

Note: If the contract cancellation fee was charged, it must be deducted from the restocking fee.
Returning a vehicle using the contract cancellation option
The buyer must return the vehicle:

• To the dealer he or she bought it from by close of business within two days, or more, if allowed by the contract;
• With no miles in excess of those permitted by the contract (the dealer may limit the number of miles a vehicle can be driven during the contract cancellation period, but it may not be a number less than 250 miles);
• With all original receipts of the sales and cancellation option contracts;
• In the same condition as it was received, except for reasonable wear and tear and any defects or mechanical problems occurring after the buyer takes possession of the vehicle; and
• Free of all liens and encumbrances, other than any lien or encumbrance created by the sales contract.

When the car is returned, the dealer must provide to the buyer:

• A full refund, including sales tax, any registration fees, and any deposit or trade-in vehicle collected from the buyer. (Note: The fee charged for the contract cancellation option is non-refundable. If the dealer did not charge for the option and has sold or transferred title to the vehicle that the buyer used as a down payment or trade-in, the fair market value or value stated in the sales contract, whichever is greater, must be refunded.)
• If the buyer has not returned the vehicle by the standards set above, the dealer has the right to refuse to accept return of the vehicle; however, written notice must be provided to the buyer.

Effective Date: July 1, 2006