Pub. 1 2013 Issue 3

18 San Diego Dealer Financing Electric Vehicle Charging Stations W ith plug-in hybrid and fully electric vehicles working their way into the mainstream automotive market, dealers have found difficulty convincing consumers to purchase such vehicles due in part to the need to purchase charging equipment to be installed at the purchaser’s home. Under existing law, the standard conditional sale contract does not contain a line to disclose the purchase of charging equipment—presenting compliance concerns for dealers and consumers seeking to finance such equipment along with the vehicle. CNCDA- sponsored AB 2502 was passed to allow dealers to include charges for electric vehicle charging stations on a new conditional sale contract line beginning July 1st 2013. The line, which will be labeled “EV Charging Station,” may include charges for the charging station device, materials, wiring, and installation. Prior to executing a conditional sale contract containing a charge for an electric vehicle charging station, the customer must be provided with and sign a separate written disclosure itemizing charges for the charging station device, materials and wiring, and any installation. The lump sum for these charges must be disclosed on the contract. These charges are subject to sales tax at the applicable rate. CNCDA is workingwith Reynolds and Reynolds to develop a form to accommodate this requirement. Dealer Impact : This bill will allow dealers to finance electric vehicle charging station devices, equipment, and installation on conditional sale contracts beginning July 1, 2013. These charges must be disclosed on a new line labeled“EV Charging Station.” Prior to signing the contract, a separate written disclosure itemizing charges for the charging station, material and wiring, and installation must be provided to the consumer and signed. Buy-Here-Pay-Here Reform Unlike traditional new vehicle dealers who sign conditional sale and lease agreements as initial creditors and then assign substantially all such contracts to third party finance sources, Buy-Here-Pay-Here (BHPH) Dealers operate under a business model where they hold their sales and lease agreements and collect payments directly from their customers. A series of major newspaper articles highlighting abuses in the BHPH sector sparked several bills that were introduced in the California legislature to prohibit abusive practices. Most of the proposals initially sought to cover all dealers, but were narrowed in scope to cover only BHPH dealers in the face of strong CNCDA opposition. Buy-Here-Pay-Here Definition – The most important provision of the BHPH bills is the definition of a Buy-Here-Pay-Here Dealer—which establishes the types of dealers that must comply with the onerous new requirements. Both BHPH bills only apply to dealers who assign less than 90% of non-cash, unrescinded, conditional sale and lease agreements to unaffiliated third-party finance or leasing sources within 45 days of consummation. The laws specify that they do not apply to leasing Each year, hundreds of new laws are passed by the California legislature and signed by the Governor. While all of the new laws are important, the following article provides a sum- mary of the key new laws applicable to dealers that either took effect January 1st 2013 or will take effect in the near future. New Dealer-Related Laws for 2013 By Jonathan Morrison