California Legislature—2013–14 Regular Session

Assembly Bill No. 1732

Introduced by Assembly Member Stone

February 14, 2014

An act to amend Section 11713 of the Vehicle Code, relating to vehicles.

LEGISLATIVE COUNSEL’S DIGEST

AB 1732, as introduced, Stone. Vehicles: manufacturers and distributors.

Existing law generally requires a manufacturer, manufacturer branch, remanufacturer, remanufacturer branch, distributor, distributor branch, transporter, or dealer of vehicles to be licensed by the Department of Motor Vehicles. Existing law prohibits these licensees from engaging in certain practices, including, failing to, within 48 hours, withdraw in writing an advertisement of a vehicle that has been sold or withdrawn from sale and advertising or representing a vehicle as a new vehicle if the vehicle is a used vehicle. Existing law makes it a crime to violate these provisions.

This bill would additionally prohibit a licensee from advertising a vehicle’s prior use or ownership history in an inaccurate manner. By expanding the scope of a crime, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

Section 11713 of the Vehicle Code is amended
to read:

11713.  

begin delete No end delete begin insert A end insert holder of begin delete any end delete begin insert a end insert license issued under this article
shall begin insert not end insert do any of the following:

(a) Make or disseminate, or cause to be made or disseminated,
before the public in this state, in begin delete any end delete begin insert a end insert newspaper or other
publication, or begin delete any end delete begin insert an end insert advertising device, or by public outcry or
proclamation, or in any other manner or means whatever, begin delete any end delete begin insert a end insert
statement begin delete which end delete begin insert that end insert is untrue or misleading and begin delete which end delete begin insert that end insert is
known, or begin delete which end delete begin insert that end insert by the exercise of reasonable care should be
known, to be untrue or misleading; or to so make or disseminate,
or cause to be so disseminated, begin delete any end delete begin insert a end insert statement as part of a plan
or scheme with the intent not to sell begin delete any end delete begin insert a end insert vehicle or service so
advertised at the price stated therein, or as so advertised.

(b) (1) (A) Advertise or offer for sale or exchange in any
manner, begin delete any end delete begin insert a end insert vehicle not actually for sale at the premises of the
dealer or available to the dealer directly from the manufacturer or
distributor of the vehicle at the time of the advertisement or offer.
However, a dealer who has been issued an autobroker’s
endorsement to his or her dealer’s license may advertise his or her
service of arranging or negotiating the purchase of a new motor
vehicle from a franchised new motor vehicle dealer and may
specify the line-makes and models of those new vehicles.
Autobrokering service advertisements may not advertise the price
or payment terms of begin delete any end delete begin insert a end insert vehicle and shall disclose that the
advertiser is an autobroker or auto buying service, and shall clearly
and conspicuously state the following: “All new cars arranged for
sale are subject to price and availability from the selling franchised
new car dealer.”

(B) As to printed advertisements, the disclosure statement
required by subparagraph (A) shall be printed in not less than
10-point bold type size and shall be textually segregated from the
other portions of the printed advertisement.

(2) Notwithstanding subparagraph (A), classified advertisements
for autobrokering services that measure two column inches or less
are exempt from the disclosure statement in subparagraph (A)
pertaining to price and availability.

(3) Radio advertisements of a duration of less than 11 seconds
that do not reference specific line-makes or models of motor
vehicles are exempt from the disclosure statement required in
subparagraph (A).

(c) Fail, within 48 hours, begin delete in writing end delete to withdraw begin delete any end delete begin insert in writing
an end insert advertisement of a vehicle that has been sold or withdrawn from
sale.

(d) Advertise or represent a vehicle as a new vehicle if the
vehicle is a used vehicle.

(e) Engage in the business for which the licensee is licensed
without having in force and effect a bond as required by this article.

(f) Engage in the business for which the dealer is licensed
without at all times maintaining an established place of business
as required by this code.

(g) Include, as an added cost to the selling price of a vehicle,
an amount for licensing or transfer of title of the vehicle, which is
not due to the state unless, prior to the sale, that amount has been
paid by a dealer to the state in order to avoid penalties that would
have accrued because of late payment of the fees. However, a
dealer may collect from the second purchaser of a vehicle a
prorated fee based upon the number of months remaining in the
registration year for that vehicle, if the vehicle had been previously
sold by the dealer and the sale was subsequently rescinded and all
the fees that were paid, as required by this code and Chapter 2
(commencing with Section 10751) of begin insert end insert begin insert Part 5 of end insert Division 2 of the
Revenue and Taxation Code, were returned to the first purchaser
of the vehicle.

(h) Employ begin delete any end delete begin insert a end insert person as a salesperson who has not been
licensed pursuant to Article 2 (commencing with Section 11800),
and whose license is not displayed on the premises of the dealer
as required by Section 11812, or willfully fail to notify the
department by mail within 10 days of the employment or
termination of employment of a salesperson.

(i) Deliver, following the sale, a vehicle for operation on
California highways, if the vehicle does not meet all of the
equipment requirements of Division 12 (commencing with Section
24000). This subdivision does not apply to the sale of a leased
vehicle to the lessee if the lessee is in possession of the vehicle
immediately prior to the time of the sale and the vehicle is
registered in this state.

(j) Use, or permit the use of, the special plates assigned to him
or her for any purpose other than as permitted by Section 11715.

(k) Advertise or otherwise represent, or knowingly allow to be
advertised or represented on behalf of, or at the place of business
of, the licenseholder that no downpayment is required in connection
with the sale of a vehicle when a downpayment is in fact required
and the buyer is advised or induced to finance the downpayment
by a loan in addition to any other loan financing the remainder of
the purchase price of the vehicle. The terms “no downpayment,”
“zero down delivers,” or similar terms shall not be advertised
unless the vehicle will be sold to begin delete any end delete begin insert a end insert qualified purchaser without
a prior payment of any kind or trade-in.

(l) Participate in the sale of a vehicle required to be reported to
the Department of Motor Vehicles under Section 5900 or 5901
without making the return and payment of the full sales tax due
and required by Section 6451 of the Revenue and Taxation Code.

(m) Permit the use of the dealer’s license, supplies, or books by
any other person for the purpose of permitting that person to engage
in the purchase or sale of vehicles required to be registered under
this code, or permit the use of the dealer’s license, supplies, or
books to operate a branch location to be used by any other person,
whether or not the licensee has any financial or equitable interest
or investment in the vehicles purchased or sold by, or the business
of, or branch location used by, the other person.

(n) Violate any provision of Article 10 (commencing with
Section 28050) of Chapter 5 of Division 12.

(o) Sell a previously unregistered vehicle without disclosing in
writing to the purchaser the date on which begin delete any end delete begin insert a end insert manufacturer’s
or distributor’s warranty commenced.

(p) Accept a purchase deposit relative to the sale of a vehicle,
unless the vehicle is present at the premises of the dealer or
available to the dealer directly from the manufacturer or distributor
of the vehicle at the time the dealer accepts the deposit. Purchase
deposits accepted by an autobroker when brokering a retail sale
shall be governed by Sections 11736 and 11737.

(q) Consign for sale to another dealer a new vehicle.

(r) Display a vehicle for sale at a location other than an
established place of business authorized by the department for that
dealer or display a new motor vehicle at the business premises of
another dealer registered as an autobroker. This subdivision does
not apply to the display of a vehicle pursuant to subdivision (b) of
Section 11709 or the demonstration of the qualities of a motor
vehicle by way of a test drive.

(s) Use a picture in connection with begin delete any end delete begin insert an end insert advertisement of
the price of a specific vehicle or class of vehicles, unless the picture
is of the year, make and model being offered for sale. The picture
shall not depict a vehicle with optional equipment or a design not
actually offered at the advertised price.

(t) Advertise a vehicle for sale that was used by the selling
licensee in its business as a demonstrator, executive vehicle, service
vehicle, rental, loaner, or lease vehicle, unless the advertisement
clearly and conspicuously discloses the previous use made by that
licensee of the vehicle. An advertisement shall not describe any
of those vehicles as “new.”

begin insert

(u) Advertise the prior use or ownership history of a vehicle in
an inaccurate manner.

end insert

SEC. 2.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.