CALIFORNIA LEMON LAW
California Car Buyer's Bill of Rights
Important Facts About A New Law That Substantially Impacts The Purchase Of New And Used Vehicles in California
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
For used car buyers only
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:
If you choose to return the vehicle, within the time specified, the dealer can charge a maximum restocking fee of:
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:
When the car is returned, the dealer must provide to the buyer:
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.
Prohibited, "certified" used vehicles
The dealer must perform a complete inspection of the vehicle and must provide consumers with a copy of the inspection report. Dealers are prohibited from advertising a vehicle as "certified" if:
Important: Inquire as to why the vehicle cannot be certified.
Written disclosure of purchase price for items usually listed with the monthly payment contract:
The dealer must provide a document indicating the price of specified items purchased and the effect of those items on installment payments. (Civil Code §2982.2)
Items requiring disclosure include a service contract, an insurance product, a debt cancellation agreement ("gap" insurance), a theft deterrent device, a surface protection product, and a vehicle Contract Cancellation Option Agreement.
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.
Finance fee caps for auto financing
If a dealer obtains financing on your behalf, the dealer compensation from an institution financing the purchase of a vehicle is limited to no more than:
This limitation does not apply when the assignment requires the dealer to bear the entire risk of financial performance for you or when the assignment is more than six months after the date of the conditional sale contract.
Written disclosure about your consumer credit score
Dealers must provide a "Notice to Vehicle Credit Applicant" document, which discloses:
You may contact your local DMV Investigations Office
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:
The form provides the addresses of DMV Investigations District Offices.
To check a dealer's license status
You can check a dealer's license status by going online at www.dmv.ca.gov and click on the links:"Online Services," and "Occupational Licensing Information System."
Whenever possible, you should attempt to resolve the problem with the other party or firm. If you are unable to obtain a resolution, you may consider contacting a private attorney or the small claims division of the county court in your community. Refer to the County Government section of your local telephone directory for the county court in your area. You may also contact a legal aid group for assistance. Legal aid agencies can provide free legal advice or represent people who cannot afford private counsel. Legal aid groups are also listed in the white pages of your local telephone directory.
Other consumer alternatives
Many consumers feel it is worthwhile to contact their local Better Business Bureau to register complaints regarding area businesses. Refer to the business section of your local telephone directory for the address and/or telephone number of the Better Business Bureau in your area. Also, many local television and radio stations offer free consumer assistance through a special telephone number or address.
For assistance and guidance in filing consumer complaints, contact:
California Attorney General
For help finding the right government agency to assist with your problem, contact:
California Department of Consumer Affairs
Bureau of Automotive Repair
Arbitration Certification Program
When using this Fast Facts brochure, please remember that it 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. If there is a conflict, this brochure cannot be relied upon as the law.