BILL ANALYSIS
AB 1731
Page 1
ASSEMBLY THIRD READING
AB 1731 (Tran)
As Amended May 11, 2010
Majority vote
JUDICIARY 10-0
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|Ayes:|Feuer, Tran, Brownley, | | |
| |Evans, Hagman, Jones, | | |
| |Knight, Monning, Nava, | | |
| |Skinner | | |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Revises consumer protections regarding vehicle
rentals. Specifically, this bill deletes the provision in
existing law tying damage waiver fee caps to the retail price of
the vehicle, and instead ties those fees to the class of vehicle
(e.g., compact, midsize, premium).
EXISTING LAW authorizes a car rental company to sell a damage
waiver, subject to specified rate limitations related to the
class and price of the vehicle.
FISCAL EFFECT : None
COMMENTS : Currently, the fee that rental companies can impose
for the damage waiver product they sell is $9 per day for
smaller vehicles below a specified retail price and $15 per day
for larger and more expensive cars, up to a maximum
manufacturer's suggested retail price (MSRP) of approximately
$43,000. Beyond that, there is no limit on the price rental car
companies can charge for damage waivers. This bill would revise
these rules by deleting the tie to MSRP, which the industry
contends is cumbersome to administer because it requires that
the retail price of each vehicle be tracked, rather than
allowing damage waivers to be sold for all compacts, for
example, at the same price. While MSRP may be roughly related
to the cost of repair in that the cost of repairing damage to an
inexpensive car is presumably lower than for an expensive one,
MSRP does not appear to be an essential element of damage waiver
pricing because damage waivers are sold without regard to the
amount of damage liability waived - i.e., $100 in damage
AB 1731
Page 2
(regardless of the price of the vehicle) is waived for the same
price as $10,000 in damage.
Analysis Prepared by : Kevin G. Baker / JUD. / (916) 319-2334
FN: 0004270