Southern California, home of the traffic jam, is king when it comes to cars. With urban sprawl and freeways, our cars serve an important function in our lives. Yet, when it comes to purchasing a car, most of us hate the process, feeling bent over every step of the way. But, that might all change soon.
New legislation is on its way to Governor Arnold Schwarzeneggar, and it will give California car buyers some of the strongest protections from deceptive auto lending practices. According to California Assemblywoman Cindy Montanez, she sponsored the bill after receiving complaints that some people in her district were paying car loans at 28%, or even higher.
Basically, the bill intends to curb the amounts that dealers can charge consumers for arranging a car loan. Currently, dealers hide certain item costs such as extended service contracts and rust-proofing – wrapping these items into loans – creating a larger principal, or just simply lying about the fact that they even exist.
Additionally, the bill also mandates that dealers must provide consumers with their credit scores. Dealers typically like to hide these numbers – the same numbers used to calculate interest rates – providing more room for dealer-protected negotiations, or for outright fraud against consumers too intimidated to question, especially minorities.
The bill will also set requirements for the newest dealer rage, certified used cars, providing minimum standards for what can be considered ‘certified’. Some have complained that many cars, in poor shape, are classified certified simply to raise the sticker price.
Already these issues have spawned numerous discrimination lawsuits. The Gov. has not yet indicated any preference for, or against, the new legislation, but he has 30 days to either sign or veto it.