C.A.R.S. News Archives 2024-2025

CARS President Rosemary Shahan was recently awarded the "2025 Legislative Advocate of the Year" Award, presented by the Consumer Federation of California and the California Low Income Consumer Coalition, in honor of her work to win passage of the California Combating Auto Retail Scams (CARS) Act, a landmark first-in-the-nation law that will take effect on October 1 of this year.

Rosemary led the coalition that advocated for passage of the law, and worked closely with the author, Senator Ben Allen (D-Santa Monica) and his Legislative staffer Shoshana Levy, to overcome the vehement opposition from new and used car dealers and their trade associations, auto lenders, banking interests, the Chamber of Commerce, and the Civil Justice Association of California (including Big Tobacco, the oil industry, and other multi-national corporations that profit from causing horrific human misery).
 

"California lawmakers made major changes to the state's car-buying rules this year, including a controversial rewrite of the state law that allows buyers to get their money back if they are sold a defective vehicle and a right to return a used vehicle within three days.

After an intense lobbying push this year from automobile companies, dealers and consumer groups, more legislative battles over California vehicle purchases could follow in 2026. Sky-high car prices show no signs of falling, and a Republican-led Congress and the Trump administration have sought to thwart Newsom's goal of having 100% of new cars sold in California be zero-emission by 2035....

In the meantime, Gov. Gavin Newsom signed [Senator Ben] Allen's Senate Bill 766, creating a first-in-the-nation policy that allows a buyer to return a used vehicle for a full refund within three days if the purchase price was less than $50,000. Dealers can charge a restocking fee.

The law, which takes effect in October, also contains other protections for buyers intended to prevent them from getting suckered.

The law also prohibits dealers from charging for add-ons that have no benefit to the buyer, such as free oil changes for electric vehicles — which don't need oil changes.

'That is a huge deal,' said Rosemary Shahan of Consumers for Auto Reliability and Safety, which championed the bill. 'It's historic. It's going to make cars more affordable.' Brian Maas, president of the California New Car Dealers Association, said the law should make buying a used car more transparent and easier for consumers.

'The bill certainly is a net positive in terms of more transparency about the total price and advertising,' he said.

But he said the new law 'clearly imposed more responsibility on dealers,' which is why Maas said his group was extremely frustrated Newsom vetoed its bill that would have allowed dealers to raise document-processing fees by $175. Newsom also signed Senate Bill 26, a bill that allows car manufacturers to opt out of changes to the state's lemon law that gives consumers a right to get their money back if they buy a defective vehicle — sometimes referred to as a "lemon."

The result is that California car buyers have different legal protections under the state's lemon law depending on which brand they buy."

Read more: CalMatters: "New California laws rewrite car-buying rules with return policy and pricing reforms"
 

"Manufacturers have recalled millions of cars in 2025 due to safety defects and consumer groups said a newly weakened 'lemon law' in California is not doing consumers any favors.

Ford alone has issued more than 100 recalls so far in 2025, affecting more than 8 million vehicles. Yet new rules this year in the Golden State made it harder to get a defective car fixed or replaced.

Rosemary Shahan, president of Consumers for Auto Reliability and Safety, said Assembly Bill 1755, which took effect in January, primarily benefits car manufacturers.

"It shortened the time period during which you can use the lemon law," Shahan pointed out. "It makes it harder to even get an attorney to represent you. It requires you to give formal, written notice directly to manufacturers if you want to use the lemon law."

Ford did not respond to a request for comment but the firm's CEO has said a shortage of mechanics is affecting the company's ability to make repairs in a timely fashion....

Ford is suing major consumer law firms handling lemon law cases. Shahan argued it is problematic the CEO of the American Arbitration Association is married to a top Ford executive, alleging Ford insists disputes involving lemon law fees are heard by the association and not other arbitration firms."

Read more: Public News Service: "Advocates: Weakened Auto Lemon Law Hurts Consumers"
 

"It is remarkable that even though New Jersey's consumer protection laws already make it illegal for dealers to sell used cars with active recalls - many do it anyway - the Legislature wants us to believe that forcing a dealer to check the NHTSA website is a laudable commitment to transparency. Three cheers for this arduous effort, which takes three seconds.

But it's a cynical scheme. The bill only requires the dealer to print out the open recall and include it in the paperwork of the sale – which will effectively make it legal to sell damaged used cars in New Jersey.

Even worse, the bill makes it harder -- some say impossible -- to file a lawsuit, because the dealer has disclosed that there is an open recall that requires repair.

'It actually lifts a big legal burden off the dealer to sell safe and road-worthy vehicles,' said Chuck Bell, the program director for Consumer Reports. 'We think that burden should belong with the dealer, who is in a much better position to repair the vehicle or understand what's wrong with it.'

Rosemary Shahan, the president of Consumers for Auto Reliability and Safety (CARS), put it this way: 'In this case, disclosure isn't meant to be about disclosure. It's legal C-Y-A,' she said. 'This bill seeks to foist the responsibility of fixing the car onto the consumer while shielding the dealers.'

Read more: "Trenton's latest disgrace: An anti-consumer bill that compromises highway safety | Editorial"
 

 
"In the chaotic final days of the legislative session, lawmakers jammed through major changes to California's "Lemon Law" that protects consumers from defective cars even as members complained that the complex legislation was rushed too quickly.

Gov. Gavin Newsom nonetheless signed the measure into law earlier this week, saying it was important to address a rising number of lemon law cases clogging the state's court system.

But he did so reluctantly, only after lawmakers agreed to reconsider the legislation next year and make the reforms voluntary for automakers.

'This bill has drawn substantive opposition from several consumer groups and the majority of automakers, who were not party to the negotiations,' Newsom wrote in a statement to legislators. 'While AB 1755 aims to speed resolution of lemon law claims and reduce litigation, many automakers … have expressed serious concerns.'  
... proponents said General Motors was the bill's strongest supporter, and that company has the most lemon law cases, nearly 26 times more than Toyota, which opposed the legislation. Proponents say that since GM agreed to the reforms, that alone should ease the burden on California's courts, even if other companies opt out....
   
"There wasn't a single person who represents the people of California who knew about this and was a part of those conversations – for months," Democratic San Ramon Assemblymember Rebecca Bauer-Kahan told her colleagues on the Assembly Judiciary Committee on Aug. 30. "They dropped this in our lap, and they expect us to buy an argument related to the urgency that feels, to be honest, not real. And we're supposed to move this in a week's time."  
"The companies that make the most lemons and fail to invest in what it takes to build quality cars and address problems early on are the ones that are being rewarded by this bill," said Rosemary Shahan of Consumers for Auto Reliability and Safety.  
...critics, such as Shahan of Consumers for Auto Reliability and Safety, say the law Newsom signed contains other provisions that would harm car buyers.

She said it will shorten the time in which a customer can sue, reduce how much money they can receive in rebates and shrink the period they can use the lemon law to just six years instead of the entire life of a vehicle's warranty, which can last longer.

Shahan said the real winners from AB 1755 are the U.S. car companies that backed the bill since they're the ones most commonly sued under the state's lemon law."

Read more: CalMatters: Newsom wants a do-over on the lemon car law he just signed.
 

 
"Californians for the past 54 years have relied on the state's 'lemon law' to fight back against car makers that sell them defective vehicles.

Now, critics say Californians' ability to recoup their money after buying a clunker could become more difficult, due to a hastily passed bill that lobbyists representing U.S. auto manufacturers and powerful attorneys groups drafted in secret.

...how the bill came to end up on [Governor Newsom's] desk is the latest example of how influential lobbying groups write laws impacting millions of Californians behind closed doors — and how the measures are often passed with little time for public input or legislative debate.

'There wasn't a single person who represents the people of California who knew about this and was a part of those conversations – for months,' Democratic San Ramon Assemblymember Rebecca Bauer-Kahan told her colleagues on the Assembly Judiciary Committee last month in the final days of the legislative session.

'They dropped this in our lap, and they expect us to buy an argument related to the urgency that feels, to be honest, not real. And we're supposed to move this in a week's time.' [Assemblymember Bauer Kahan is the Chair of the Assembly Committee on Privacy and Consumer Protection, which normally would have had a hearing on the bill, based on how lemon law bills were assigned to committees in the past.]...

Former Los Angeles Democratic Assemblymember Mike Gatto said it's unlikely that lawmakers actually read all that in those final chaotic days of the session with hundreds of other consequential bills still pending....

Downey Democratic Assemblymember Blanca Pacheco, an attorney, told her Judiciary Committee colleagues she wasn't comfortable voting for the bill because she wasn't sure what it would do.

'I want to make sure that consumers are protected as well,' she said. 'Those are our constituents. And so that is what we really should be caring about. And I don't know if consumers are really protected.'  
Umberg, a former federal prosecutor, and Kalra, a former public defender and law professor, told their colleagues that consumers would still be able to get their money back from a defective car. They argued that California's lemon law, which Gov. Ronald Reagan signed in 1970, still would be stronger than that of any other state.

But Rosemary Shahan, president of Consumers for Auto Reliability and Safety, said the bill would harm car owners stuck with a lemon vehicle in several ways.

It would limit the amount of "negative equity" refunds consumers could get for their defective car, and it would shorten the period in which consumers can use the lemon law to just six years, even when their warranty lasts longer, she said.

'This is a big deal for folks who pay extra for a vehicle with a warranty from the manufacturer, in order to avoid getting hit with a large unexpected repair bill,' she said in an email.

The bill also would require that consumers notify their manufacturer in writing that their car is a lemon, instead of just taking it into a dealer for repairs and starting the process of getting their money back there, she said.

It also would limit the amount of time a consumer can file a lemon lawsuit from four years after a claim is filed to just a year from the expiration of a vehicle's warranty, she said.

'This would make it easier for unscrupulous auto manufacturers to get away with doing cheap "Band-Aid" type repairs – instead of fixing the underlying problem – until the warranty expires,' leaving consumers on the hook for a massive bill, she said.

The bill's supporters include General Motors, Stellantis (formerly Chrysler) and Ford Motor Company, as well as RV manufacturers....

Regardless of whether lawmakers fully grasped the issue, any time complicated legislation such as AB 1755 gets rushed through at the last minute, it harms the Legislature's credibility and makes it harder for voters to trust their elected leaders, said Gatto, the former lawmaker.

'Transparency suffers,' he said, 'And all the different stakeholders that keep the Legislature honest, whether it's the electorate or the media, it makes it a lot harder for us to do our jobs.'"

Read more: Public News Service: "Critics say lawmakers watered down California's lemon car law after secret lobbyist negotiations"
 

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"Consumer groups are calling for the withdrawal of a bill [AB 1755] that would change the way California's auto lemon law works....

Rosemary Shahan, president of Consumers for Auto Reliability and Safety, said it would also mean if a problem arises more than six years after the sale, the lemon law no longer applies.

'It would shorten the statute of limitations for filing a lemon-law case to just one year after the warranty expires. Right now it's four years after you find out you have a claim,' she explained.

The bill would also require consumers to file a formal written complaint instead of simply calling the dealer....

General Motors is the biggest backer of the bill. Shahan suggests car manufacturers are looking for ways to avoid paying to repair or replace vehicles.

'What they're trying to do is reduce their warranty compliance costs, like last year alone, Ford paid out $1.9 billion in warranty repairs, and they're under pressure by Wall Street to reduce their warranty costs,' she continued."

She added the bill would also mean that manufacturers would no longer have to pay off the amount people may still owe on a lemon car. So some people may not be able to get a buy-back unless they can come up with thousands of dollars up front."

Read more: Public News Service: Consumer groups blast bill to change CA Lemon Law
 

".... [the Consumer Attorneys of California] and automakers [General Motors and Ford] say they've reached an agreement on legislation to streamline and speed up claims under California's "lemon law," which entitles buyers of vehicles with serious defects to receive a refund or a new car.

The .... [1970 law signed by then-Governor Reagan] requires the manufacturer of a vehicle sold in California to provide a refund or a replacement when the vehicle cannot be repaired after a "reasonable" number of attempts, usually ranging from two to four depending on the seriousness of the problem....

The new legislation [is] AB1755 by Assembly Member Ash Kalra, D-San Jose.

The bill would also require customers to file claims under the lemon law within six years of receiving the vehicle, and within one year of the expiration of the vehicle's warranty. It would set new deadlines for proceedings in court, and would require customers who seek civil penalties to submit their claims to the manufacturer in writing, not a mandate under current law.

Every state has a lemon law that applies to new cars, but California's law is one of the few that also applies to used cars. In a statement announcing the bill, Kalra said AB1755 would ensure that California's law "remains the strongest in the nation, by streamlining and expediting the process for consumers to get their money back — or get a new car — when their vehicle has a serious defect the manufacturer can't fix."

Sen. Tom Umberg, D-Santa Ana, who co-authored the measure, said it would "get drivers out of the judicial system and back on the road more quickly."

Kalra used the so-called gut-and-amend tactic to take an existing bill, scrape out the language and replace it with the new lemon law measure. It must be approved by both houses by Aug. 31 and signed by Gov. Gavin Newsom by Sept. 30 in order to become law next year....

But other consumer groups said Wednesday that AB1755 would weaken the existing lemon law for the benefit of automakers.
'Manufacturers are now responsible for figuring out if you have a lemon. This shifts the burden to consumers,' said Rosemary Shahan, president of Consumers for Auto Reliability and Safety, a nonprofit advocacy group. Other objectors included the Consumer Federation of America, the National Consumers League and the California Public Interest Research Group.

Shahan said the bill restricts customers' rights by requiring them to file complaints within six years of purchase, even if their warranty was longer. And if the car's value has decreased since its purchase, she said, the manufacturer would be required to repay the owner only the diminished value, not the additional amount, known as 'negative equity,' that the owner still owes."

Read more: San Francisco Chronicle: "California's lemon law could get an update that would speed refunds under new deal"

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Note: the bill is opposed by the nation's leading pro-consumer and auto safety organizations, and many leading California-based consumer and safety organizations, including:

Consumers for Auto Reliability and Safety

The Center for Auto Safety

Consumer Federation of America

National Consumers League

Safety Research and Strategies

National Consumer Law Center

Kids and Car Safety

National Association of Consumer Advocates

Trauma Foundation

Rise Economy

CALPIRG

Public Counsel

University of San Diego Consumer Protection Policy Center

Housing and Economic Rights Advocates

It is also opposed by many auto manufacturers who have a record of building better-quality vehicles and are relatively rarely sued under California's auto lemon law, compared with GM and Ford. (See The California Auto Lemon Index to see which auto manufacturers are sued the most /least under California's auto lemon law.)
 

"Fifth Third Bank just agreed to pay a $20 million fine to settle charges it forced car buyers to purchase unnecessary insurance and created fake accounts in customers' names.

The Consumer Financial Protection Bureau said the bank required customers with car loans to buy insurance, even if they already had coverage or got their own within 30 days.

Rosemary Shahan, president of Consumers for Auto Reliability and Safety, said some customers then could not afford the payments.

'There were about 1,000 consumers who had their cars repossessed,' Shahan recounted. 'Most people rely on their car to get to and from work, and get their kids to school, and get to medical appointments. So that is really devastating when they lose their car.' Shahan pointed out car dealers sometimes make verbal promises differing from the written contract or fail to even print out the financing paperwork. She wants people to know they cannot be required to buy insurance if they already have coverage.

'The best way to avoid all these scams is join a credit union, get your own financing, and deal with a reputable bank,' Shahan recommended. 'Don't let the dealer get financing for you.' ""

Read more: "Feds fine bank for illegal car insurance practices" by Suzanne Potter, Public News Service

CFPB takes action against Fifth Third Bank for wrongfully triggering auto repossessions and opening fake bank accounts