Tag Archives: Gavin Newsom

California Combats Auto Scams, Makes New and Used Cars More Affordable

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First-in-the-Nation California Combating Auto Retail Scams (CARS) Act Takes Effect October 1. Includes 3-day cooling off period for used car buyers.

At a time when the prices for new and used vehicles have reached record-breaking highs, due to President Trump’s hiking tariffs on auto components, common car dealer scams, and other factors, the California Combating Auto Retail Scams (CARS) Act (SB 766), authored by California Senator Ben Allen, will make buying new and used cars in California more affordable and less risky – without costing taxpayers.

Leading economists project that the CARS Act’s truth-in-pricing mandate and new protections against worthless add-ons will save California car buyers an estimated $234 million annually in reduced search costs, plus another 8.5 million hours in time savings each year.

In addition to those savings, the California CARS Act also creates a new, history-making first-in-the-nation 3-day cooling off period for used cars that cost $50,000 or less, giving used car buyers the right to return vehicles for any reason for a full refund, minus a restocking fee between $200 – $600.

This new right will empower used car buyers in negotiating with car dealers, and help consumers, including rideshare drivers and many small businesses, avoid getting stuck with unfair deals or unsafe, defective cars. It will also help give dealers who don’t scam their customers a competitive advantage.

The Act is aimed at protecting California new and used car buyers from the #1 source of consumer complaints nationwide: auto sales and service. According to the Consumer Federation of America annual consumer complaint survey, auto sales, manufacturing issues, and service complaints have topped the charts of the top ten consumer complaints to state and local consumer protection agencies for the past ten years.

Key provisions in the CARS Act:

  • Requires car dealers to disclose the “total price” up front and in advertising, including any add-on items installed by the manufacturer, making the actual “off the lot” prices more honest and transparent, and encouraging competition over prices
  • Prohibits car dealers from requiring the purchase of add-on items that were not installed by the manufacturer, in order to buy the new or used car
  • Requires dealers to disclose at the time of sale or lease that add-on items not installed by the manufacturer are optional
  • Bans car dealers from charging extra for add-ons that “would not benefit” car buyers, including lifetime oil changes or catalytic converter markings for electric vehicles, and service contracts that are void due to pre-existing conditions, such as prior damage from a crash or flood or preexisting mechanical conditions
  • Prohibits dealers from advertising or claiming they are affiliated with or endorsed by the U.S. military or any government agency
  • Creates a new first-in-the-nation right to return a used vehicle that cost $50,000 or less within 3 calendar days for any reason for a full refund, minus a restocking fee between $200 – $600 (and sometimes other fees)

For FAQs and more information about the CARS Act and how to make the most of the new cooling off period, visit this page on CARS’ Website.

Will Governor Newsom VETO attack on California’s auto lemon law?

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Auto manufacturers attack California’s landmark auto lemon law
Pro-consumer / auto safety organizations urge Gov. Newsom to veto SB 71

Auto manufacturers who produce seriously defective vehicles are backing legislation on Governor Gavin Newsom’s desk that would drastically weaken the ability of hapless victims of lemon automobiles to use California’s auto lemon law to get a refund. If Governor Newsom signs the bill (SB 71) into law, millions of California vehicle owners would face a much higher risk of being stuck with lemon autos that are unreliable and often unsafe to drive.

In a letter sent to legislators in Sacramento, the Alliance for Automotive Innovation — the trade association for dozens of international auto manufacturers — argues for passage of SB 71, authored by Senator Tom Umberg (D-Santa Ana), the powerful Chair of the California State Senate Committee on the Judiciary.

SB 71 would take away the ability of consumers who purchase faulty lemon cars for less than $35,000 to access “unlimited civil” courts, where they can easily get legal representation — usually at no cost to them — and may be awarded up to double their damages as a civil penalty, if they win and prove that the manufacturer’s refusal to promptly comply with the lemon law was “willful.”

Instead, consumers whose vehicles cost less than $35,000 would be forced to submit their cases to “limited civil” courts where they would face a number of procedural hurdles that usually make it impossible for them to win. For example, they are unlikely to be able to get enough discovery to prove their case. This means that scofflaw auto manufacturers who produce problem-riddled lemon cars priced below $35,000 would be able to get away with foisting them off on California car buyers and refusing to honor their warranties and fix them. Thus, auto giants would save potentially tens of millions of dollars in auto repair costs they would otherwise have to spend to fix problem cars under warranty.

If Governor Newsom signs SB 71 into law, he would be the first California governor to weaken protections for California’s car buyers under California’s landmark auto lemon law, widely regarded as the best in the nation. In the past, governors of both major political parties, democrats and republicans alike, have signed bills to improve and expand protections against defective lemon cars, starting with Governor Ronald Reagan, who signed California’s Song-Beverly Consumer Warranty Act — the original “lemon law” — in 1970.

The timing couldn’t be worse, since consumer surveys show increasing dissatisfaction and complaints about major defects in new vehicles, which are prone to myriad  problems caused by faulty electronics and software programming.

According to J.D. Power’s annual survey of initial quality among motor vehicles:
“In the IQS, J.D. Power ranks automakers based on verified-owner responses, calculating for each a problems-per-100-vehicles (PP100) score. Looking at recent study results, the number of problems increased by 18 PP100 between 2021 and 2022 and climbed a massive 30 PP100 from 2022 to 2023. That’s nearly 50 PP100 combined in just two years. Automakers are seeing more persistent problems with their new technologies.“ — New Tech Drives Major Increase in Vehicle Quality Issues, JD Power report June 22, 2023.

According to the official analyses of SB 71, the only supporters are debt collectors and auto manufacturers and suppliers.

CARS and other non-profit organizations who give consumers a voice in the legislative process are fighting back. We’re urging Governor Newsom to veto SB 71. Here’s our letter to Governor Newsom. The more Californians the Governor and his staff hear from, the better.

ACTION ALERT!!
Save YOUR right to fight back against greedy auto manufacturers
Don’t let auto giants stick you with an unsafe, defective lemon car
Save California’s auto lemon law – act NOW!!

What can you to make YOUR voice heard and save California’s auto lemon law, so you can fight back if your “dream car” turns out to be a lemon?

Send a brief personalized e-mail message to California Governor Gavin Newsom, here. Under topic, choose “An active bill” and then “SB 71”. Where it asks for your position, choose “CON.” In your comments, let the Governor know that you live in California and urge him to VETO SB 71. Use your own words to explain why. For example, “I spent over $30,000 to buy a brand new car, and it was in the shop for repairs for over two months. Ford refuses to buy it back. California needs a strong auto lemon law. Don’t weaken it. I urge you to VETO SB 71.”