Jerry Brown signs restrictions on Buy Here Pay Here used-car lots
Gov. Jerry Brown on Saturday signed two of three bills regulating California’s Buy Here Pay Here used-car industry, which sells older cars to people with bad credit.
The dealers arrange their own financing for the vehicles they sell, often requiring large down-payments and charging high interest rates. Brown signed AB 1447, which requires dealers to provide a 30-day, 1,000-mile warranty on their cars. The bill is by Assemblyman Mike Feuer (D-Los Angeles).
He also signed a bill by Assemblyman Bob Wieckowski (D-Fremont) that mandates that car lots post a fair-market value on vehicles, addressing concerns that many now sell for up to four times their book value. That bill is AB 1534.
But Brown vetoed SB 956, which would have limited interest rates to 17% plus the federal funds rate, and provide buyers with a 15-day grace period before repossessing cars for a missed payment. That bill is by state Sen. Ted Lieu (D-Torrance); Brown balked at a provision requiring dealers to be regulated by the Department of Corporations under the California Finance Lender’s Law.
"I am not yet convinced the evidence merits the regulatory oversight of this bill,’’ Brown wrote in his veto message.
"I signed two 'buy-here-pay-here’ consumer protection bills this session,'' he added. "If consumers need added protection once those bills are implemented, my administration will work with the Legislature to find appropriate, measured solutions.’’
The bills were introduced after a series of Los Angeles Times articles exploring consumer concerns about the business model and practices of the industry.
-- Patrick McGreevy in Sacramento
Photo: Gov. Jerry Brown. Credit: Mark Boster/Los Angeles Times