BILL ANALYSIS �
AB 1534
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Date of Hearing: May 25, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1534 (Wieckowski) - As Amended: May 21, 2012
Policy Committee: JudiciaryVote:6-3
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill requires buy-here-pay-here automobile dealers, as
defined, to affix a label, as specified, on any used vehicle
offered for retail 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
AB 1534
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to every used car for sale stating the reasonable market value
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)Amendments . The author recently amended the bill to:
a) Limit the bill's provisions to "buy-here- pay-here"
automobile dealers only.
b) Change the definition of "reasonable market value" to be
the average retail value determined within the last 60
(instead of 30) days.
c) Include language on the sticker that the reasonable
market value is meant for comparison shopping only, and is
not the asking price or advertised price.
3)Opposition . Prior to the most recent amendments, 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.
4)Related Legislation . AB 1447 (Feuer), pending in the Assembly,
establishes consumer protections specifically with regard to
"buy-here-pay-here" automobile dealers.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081