California New Car Dealers Oppose AB 68 (Montanez)

Urge Legislators To Check Under The Hood Before Casting Their Votes

SACRAMENTO, Calif., March 1 -- The California Motor Car Dealers Association (CMCDA) urges legislators to read the fine print in AB 68 and vote "NO" on the flawed bill that would impose limitations on both consumers and dealers.

"We strongly encourage members of the Legislature to take a look under the hood of this bill because it contains numerous flaws that will stifle the state's robust new and used car industry," said Peter Welch, CMCDA's president.

AB 68 is virtually identical to AB 1839 (Montanez) of 2004, which was vetoed by the Governor. The only significant difference between the two measures is that AB 68 contains a so-called "3-day cooling off period" for used vehicle sales which failed passage on the Senate floor of the 2003-2004 legislative session.

CMCDA's analysis of AB 68 details a long list of the potentially devastating consequences of the bill. Two of these include:

  -- AB 68 is an intrusion into the private contract rights of car dealers
     and consumers. The purpose of the bill is to protect consumers from
     alleged high pressure sales tactics at the hands of unscrupulous car
     dealers, but in reality it's nothing more than a remedy for "buyer's
     remorse." The bill would permit a consumer that purchases a used car
     from a dealer (unless the vehicle was a consignment sale or sold "as
     is") to cancel the transaction without cause for up to three business
     days -- whether or not the selling dealer did anything wrong.
  -- Imposes government price controls on the amount dealers can charge to
     finance a vehicle purchase. The bill's provisions concerning vehicle
     financing would dramatically alter California's robust auto financing
     market, by prohibiting the state's 10,000 new and used car dealers from
     competing on a level playing field with banks and credit unions. The
     inevitable result will be less competition and higher prices for car
     buyers.

In addition, AB 68 contains numerous provisions that are vague and ambiguous and will result in endless and expensive litigation.

About CMCDA

The California Motor Car Dealers Association (CMCDA) is a statewide trade association that represents the interests of more than 1,400 franchised new car dealer members. For more information, visit CMCDA's Web site: www.cmcda.org.