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Proposed Legislation in California Could Cause Issues
There are three bills pending in the California state legislature that could negatively impact dealers and consumers.
According to "The Coalition to to Protect our Freedom to Drive," these bills are SB 956, AB 1534 and AB 1447. The Coalition's website states that some of the results of these bills would be:
- SB 956 will cap interest rates on retail installment sales and leases (which, in fact, don’t even have an “interest rate”) at a floating rate that, at the moment would be 17.25%. The current rate is far lower than the average credit card rate. The dealer in this case would be expected to carry a much higher amount financed at a lower rate, compared to credit cards that have a higher rate and lower average balances.
- AB 1447 will require an ambiguous and costly warranty mandate on all used cars sold in a Buy-Here, Pay Here, transaction. This mandate conflicts with existing California’s Uniform Commercial Code and Federal regulations permitting the sale of goods “AS IS.”
- AB 1534 will impose a regulation requiring dealers to affix a label to every car stating its “reasonable market value” – a vague term at best not taking into account the enormous differences between two similar make/model/year cars in vastly different condition. A disservice to consumers placing an equal value on two very different automobiles.
These are only a few of the changes these bills propose. You can read more on the Coalition's website. http://www.protectfreedomtodrive.com/#!bad-bills/vstc1=ab-1534
For Californians, the site also provides an easy way to get in touch with local assembly members and senators to ask them to vote No on these bills. Please share this, especially with those you know in California, to get the word out.
Comment
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Comment by Toby Reiley on June 13, 2012 at 9:05pm -
Sheldon- you are right. I apologize and agree. No more advertising. I saw the SUBPRIME NEWS article that quoted Ken Shilson as saying that the State of CA might loose $70M in sales tax, and I thought it was an exageration given that 1) the legislation is aimed at giving the consumer a level playing field by regulating out of business the handful of schmuks who abuse the customers, and 2) the good dealers will adapt Many of the proposed regulation ar appropriate in 2012, like being able to pay with a debit card versus in person on site and in cash. There are already a number of good and easy solutions for dealers. The sky is not yet falling.
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Comment by Sheldon Wolff on June 13, 2012 at 7:19pm -
NO Offence here Toby, But I believe these blogs were for an exchange of pertainent information and ideas NOT for free advertising. These bills that are presented because numerous unscrupolus self serving dealers screwed way too many people too often. Oh wait, just like the nations big banks, mortgage companies and investment firms!
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Comment by Ben Misra (secondarypro) on June 13, 2012 at 6:10pm -
It is probably time to regulate the corner fruit stand as well and the guys on the on ramps selling water and socks.
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Comment by Toby Reiley on June 13, 2012 at 6:02pm
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While the proposed legislation appears to severely limit dealers, FinCo Management provides a solution which keep dealers compliant today, and in many cases makes the dealer more profit both at closing and over time than the dealer can make when running their own finance department. Finco supplies capital, operations, expertise and the management to allow the dealer to make $705 to $1000 at CLOSING, and FULL BHPH PROFIT over time. And no costs for software, employees and lawyers!
Here is link to my response to the proposed legislation.
Toby Reiley, President, FinCo Management
781-639-6000
© 2013 Created by Greg Goebel.
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