Car buyer Bill of Rights takes effect

By Erica Holt, Bay City News Service

July 1, 2006

Californians who buy a used car from auto dealers will be allowed to return it within two days for a full refund, under a new law that takes effect July 1 requiring dealers to offer the option for a fee.

Gov. Arnold Schwarzenegger signed the California Car Buyers Bill of Rights into law last year.

Californians are the now the only ones in the nation who can pay a fee and have the option to return a used car valued below $40,000 to a dealer's lot within two days of purchase, according to the legislation.

"This law gives car buyers significant new rights, but also allows dealers to charge consumers for the used car return option,'' said Joe Ridout in a statement, manager at Consumer Action, a nonprofit advocacy group supporting the bill.

The law also prohibits "loan packing,'' a common scam that involves deceiving a buyer about a car's price so that they think certain add-ons are free, according to the Consumer Action.

The bill includes a cap of 2.5 percent on kickbacks for dealers on loans of less than 60 months and 2 percent for longer loans to prevent inflated interest rates for consumers.

Consumer Action advises potential car buyers to get cars checked out independently before making a purchase and to review its brochure on the bill of rights at http://www.consumer action.org.

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