BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  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
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            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