| Always read the fine print...twice. | | | | are A) rich and don't care, or B) have perfect |
| On July 1st, 2006, a landmark consumer | | | | credit, or C) Your credit is so bad that it doesn't |
| protection bill became law in California. Known as | | | | matter what the number is...you just want to buy |
| the Car Buyers Bill of Rights, this bill has been | | | | a car!! A raw credit score does not mean anything |
| more successful at confusing the public than it has | | | | whatsoever to someone who does not approve |
| been at eliminating predatory dealer practices. In | | | | loans for a living. |
| it's final realization, it is an abject example of what | | | | The UGLY: Talk about "fine print"! Car dealers are |
| can happen when well-meaning consumer groups | | | | allowed to charge for the two-day return option! |
| make unrealistic proposals and settle for | | | | In other words, instead of creating a protection |
| impractical solutions. | | | | for buyers who feel they have been victimized , |
| Key features of the bill include: | | | | this bill has created another profit source for the |
| * Imposing a limit on the interest rate markup | | | | dealership! |
| allowed to dealers when arranging an auto loan. | | | | " Mr. Jones, for only $300 you can have the |
| * Setting more specific criteria for cars that are | | | | peace of mind......" |
| to be sold as 'certified'. | | | | For a vehicle priced at more than $10,000 , a |
| * Establishing a two-day return option for buyers | | | | $500 restocking fee may be charged. Of course, |
| of used vehicles. | | | | this assumes that you were back within 48 hours, |
| * Requiring dealerships to disclose to customers, in | | | | drove less than 250 miles, and complied with all |
| writing, their credit scores and the source of the | | | | other the other small-type provisions. Who will go |
| information. | | | | through all of that? Not many, even if they are |
| The GOOD: Capping the interest rate markup on | | | | not happy with their deal. Who will pay for the |
| loans arranged by dealers is the most important | | | | 'concept' of the right to go through all of that? |
| feature of this bill. This legislation places a markup | | | | Quite a few do. |
| limit of 2 1/2 percent on loans of 60 months or | | | | It is difficult for folks to consider the implications |
| less, and 2 percent for longer terms. Many | | | | of these "only $5 dollars a month" options when |
| respectable dealers had already placed a similar | | | | they come flying at them out of the blue. "This is |
| limit on mark-ups themselves. The legislation | | | | only to protect YOU" or " This is an option the |
| originally called for the elimination of this fee | | | | state requires us to offer for your protection". |
| altogether. The Finance department would have | | | | See what I mean? |
| then been acting as a non-compensated loan | | | | AS ALWAYS, the best advice is to deal with |
| broker. | | | | people you know and trust. The typical car buyer |
| The BAD: This legislation was originally aimed at all | | | | will spend hundreds of thousands of dollars buying |
| car dealers, but the 'cooling off period' is available | | | | cars in their lifetime. Developing relationships with |
| only to used car buyers. So, if your new car does | | | | the sellers of vehicles is essential. Do your due |
| not please you...too bad! The 'cooling off period' | | | | diligence, check on the dealer, talk to the Better |
| does not apply to new car buyers. Being 'forced' | | | | Business Bureau, know where you will be buying |
| to reveal the credit score to someone who did | | | | the car before setting out to do so!. DO NOT go |
| not check it out before trying to buy a car | | | | driving from lot to lot hoping to find a car that |
| seems....well, let's face it: If you did not check your | | | | "speaks to you". If the car really could speak to |
| credit before going out to buy a CAR, either you | | | | you, it might tell you to run away... |