2016 changes some important car dealer law

AB 1178: Vehicle Manufacturers and Distributors

Existing law: The New Motor Vehicle Board was established in affiliation with the Department of Motor Vehicles, and existing law requires the Board to hear and decide certain protests presented by a motor vehicle franchisee in regard to a dispute with the vehicle manufacturer.

Changes from this law: This bill authorizes the board to hear protests by an association (such as the California New Car Dealers Association) to challenge the legality of an export or sale-for-resale prohibition policy of a manufacturer, manufacturer branch, distributor, or distributor branch, and would establish procedures for hearing those protests, as specified. This law recasts the provisions relating to export and sale-for-resale prohibitions to provide that it would be unlawful to take or threaten to take any adverse action against a dealer pursuant to an export or sale-for-resale prohibition because the dealer sold or leased a vehicle to a customer who either exported the vehicle to a foreign country or resold the vehicle in violation of the prohibition unless the export or sale-for-resale prohibition policy was provided to the dealer in writing at least 48 hours before the sale or lease of the vehicle and the dealer knew or reasonably should have known of the customer’s intent to export or resell the vehicle in violation of the prohibition.

In addition, the law establishes a rebuttable presumption that the dealer did not have reason to know of the customer’s intent to export or resell the vehicle if the dealer causes the vehicle to be registered in this or any other state, and collects or causes to be collected any applicable sales or use tax due to this state.

AB 265: Consumer Protection; Buy Here Pay Here Dealers

Existing Law: Buy-here-pay-here dealers are prohibited from disabling a vehicle with starter interrupt technology unless the dealer notifies the purchaser in writing at the time of the vehicle purchase that the vehicle is equipped with starter interrupt technology and that a warning will be provided no less than 48 hours before the use of the starter interrupt technology to shut down the vehicle remotely. Also under existing law, in the event of an emergency the buyer will be provided the ability to start a dealer-disabled vehicle for no less than 24 hours after the vehicle’s initial disablement. A violation of this law is misdemeanor punishable as a fine not exceeding $1,000.

Changes from this law: This law extends the notice time and scope of disclosures in the written notification to the purchaser at the time of sale. Specifically, the written disclosure now must state that a warning will be provided 5 days before the use of the starter interrupt technology for all weekly payment term contracts and 10 days before the use of starter interrupt technology on all other contracts, and a final warning will be provided no less than 48 hours before the use of the starter interrupt technology to shut down the vehicle remotely. Also, this written notice must now state that in the event of an emergency, the purchaser will be provided with the ability to start a dealer-disabled vehicle for no less than 24 hours after the vehicle’s initial disablement. The law also increases the maximum fine amount to $2,000.