Car buyer protection bill faces veto

October 6, 2009 6:58:58 PM PDT
A bill that would protect car buyers who trade in their old cars to unscrupulous auto dealers faces a possible veto by the governor.

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No one likes paying for a car they no longer own, but that has happened to thousands of car buyers in the state. The question that needs to be answered is, "Are the protections the state already has in place, enough?"

Alvin House of El Cerrito traded in his car more than a year ago. The dealership, West Coast Motors of Richmond, promised to pay off the loan and take over ownership. But, 16 months later, the car was still in Alvin's name. He is still making payments and the car is nowhere to be found.

"I'm not a happy camper about it, but, ain't nothing I can do about it," he says.

West Coast Motors went out of business. It is one of more than 1,00 car dealerships that closed during the fiscal year that just ended. At least 5,000 California car buyers, possibly more, have been left holding the bag like Alvin.

Rosemary Shahan is with Consumers for Auto Reliability and Safety.

She says, "We want people to have some confidence. If they go to a licensed car dealer and trade in a car, and the dealer says they'll pay it off, they'll do that."

A bill now on the governor's desk would require dealers to pay off a trade-in within 21 days, and before they resell it. The bill passed the legislature with no problem, but the governor's director of finance, H.D. Palmers, says the bill is not needed, that a restitution fund set up last year is doing the job.

He says, "Before we put another new program in place that's going to put another additional fee on, let's see how the one that just came on the books works out."

"Why should consumers get ripped off and then have to apply to a fund instead of just not getting ripped off in the first place?" asks Shahan.

House filed his claim with the restitution fund in June. He is still waiting for his money. Mark Anderson is Alvin's attorney and he says, "There's been a failure by the California Bond Fund to do what they should do and that's pay off claims in a reasonable time."

The fund was approved following a three-year investigation by 7 on Your Side of Vacaville Ford. The now-closed dealership recently settled with the state after being accused of not paying off trade-ins totaling more than $500,000.

Anderson thinks more needs to be done to protect car buyers. He wants the bill signed.

"This is very important for these people, to prevent this thing in the first place," he says.

The governor has not yet taken a formal position on the bill. He has until Sunday to sign or veto it. The restitution fund, meanwhile, says it is paid out $400,000 to about 50 consumers.

Another 100 are still waiting for their checks.

Claim Form: Consumer motor vehicle recovery corporation

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