BILL ANALYSIS Ó AB 1534 Page 1 Date of Hearing: May 9, 2012 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair AB 1534 (Wieckowski) - As Amended: March 14, 2012 Policy Committee: JudiciaryVote:6-3 Urgency: No State Mandated Local Program: Yes Reimbursable: No SUMMARY This bill requires automobile dealers to affix a label, as specified, on any used vehicle offered for sale stating the reasonable market value, as defined, of that vehicle. The bill also requires the dealer to provide a prospective used vehicle purchaser with a copy of any information obtained from a nationally recognized pricing guide that was used to determine the reasonable market value of the vehicle. FISCAL EFFECT 1)Minor ongoing special fund costs (around $35,000) to the DMV for additional enforcement. 2)Minor additional costs to the courts associated with violations of the bills requirements, which constitute an infraction. COMMENTS 1)Purpose . Unlike new cars, which since 1958 have been required to display a manufacturer's suggested retail price (MSRP) sticker, there is no similar requirement for used cars. The author argues that this disparity allows some unscrupulous used car dealers to set the price for a car based on information determined after running the customer's credit report, or otherwise drastically overprice a used vehicle for low-income consumers who cannot afford a new car but are particularly compelled to obtain a car for everyday needs. AB 1534 therefore requires that automobile dealers affix a label to every used car for sale stating the reasonable market value AB 1534 Page 2 of the vehicle, as determined by a nationally recognized pricing guide (e.g. Edmunds or Kelley Blue Book). In support of the bill, consumer advocacy groups believe it will strengthen transparency and protect consumers from predatory pricing practices in the sale of used cars. 2)Opposition . The California New Car Dealers Association, CarMax, and the Independent Automobile Dealers Association argue that used cars of the same make, model, and year may vary in value because of differences in their individual history and condition. These opponents find problematic the bill's requirement that every used car be labeled with a "reasonable market value" representing the average retail value according to a pricing guide such as the Kelley Blue Book, because they contend such a valuation of the car is not indicative of the actual value of any specific vehicle. Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081