Pub. 1 2013 Issue 3

Winter Issue 2013 19 companies who primarily lease vehicles two Model Years old or newer, or to dealers who certify 100% of their vehicles, are registered with BAR, and employ at least 5 ASE-certified master technicians. This definition effectively exempts almost all new vehicle dealers, leasing companies, and “big box” used car dealers such as CarMax. UsedVehicleWrittenWarranty Requirement – One of the new laws prohibits BHPH dealers from selling or leasing vehicles without providing a written warranty meeting the following requirements (which must be accurately reflected on the used car buyer’s guide): Duration: the earlier of 30 days from date of delivery, or 1,000 miles from the odometer reading disclosed on the contract. Covered Components: 1. Engine, including all internally lubricated parts; 2. Transmission and transaxle; 3. Front and rear wheel drive components; 4. Engine cooling system; 5. Alternator, generator, starter, and ignition system, not including the battery; 6. Braking system; 7. Front and rear suspension systems; 8. Steering system and components; 9. Seatbelts; 10. Inflatable restraint systems installed on the vehicle as originally manufactured; 11. Catalytic converter and other emissions components necessary for the vehicle to pass a smog test; 12. Heater; 13. Seals and gaskets on components described in this subdivision; 14. Electrical, electronic, and computer components, to the extent that those components substantially affect the functionality of the components listed above. Coverage Terms: 100% parts and labor to repair any noncon formity with the written warranty; dealer option to rescind the contract and refund the customer all payments made, less a reasonable amount for any damage sustained to the vehicle after delivery. Payment Collection Prohibitions – The new law establishing BHPH written warranty requirements also strictly limits the use of electronic tracking and starter-interruption devices to enforce payment obligations, and prohibits BHPH dealers from requiring that payments be made in person (aside from the down payment). BHPH dealers may not repossess a vehicle or impose any charges on the grounds that the deferred down payment was not made in person. UsedVehicle“Fair Market Price”Posting Requirement – A separate bill requires BHPH dealers to affix a label on any used vehicles offered for retail sale disclosing the vehicle’s “Reasonable Market Value”—defined as the “average retail value of a used vehicle based on the condition, mileage, year, make, and model of the vehicle, as determined within the last 60 days by a nationally recognized pricing guide that provides used vehicle retail values or pricing reports to vehicle dealers or the public.” The BHPH dealer must also provide a prospective purchaser with a copy of any information obtained from the pricing guide that was used to establish the “Reasonable Market Value.” Dealer Impact: Non-BHPH Dealers must pay close attention to the number of non-rescinded and non-cash consumer sales and lease agreements that are not assigned to ensure they do not approach the 10% threshold. BHPH Dealers will face several significant new challenges, including: o Written Warranty Requirements; o Limited Payment Collection Mechanisms; and o “Fair Market Value” Posting Mandate. Continued on page 22 Occupational Licensing Settlement Restrictions Dealers and other businesses commonly settle disputes with consumers on terms that prohibit the consumer from filing a complaint with a regulatory agency, or require the consumer to withdraw any existing complaint with the regulatory agency. AB 2570 was passed to specifically prohibit licensees of a regulatory agency under theDepartment of Consumer Affairs (including the Bureau of Automotive Repair) from including in a settlement agreement any provision prohibiting the person from contacting, filing a complaint with, or cooperating with the regulatory agency, or requiring the party to withdraw an existing complaint. Any illegal provision of a settlement agreement is deemed void as against public policy, and subjects the licensee to disciplinary action from the regulatory agency. Dealer Impact: This bill bans dealers from restricting a consumer’s ability to complain to or cooperate with the Bureau of Automotive Repair as part of a settlement agreement for an automotive repair dispute.