Payment Packing

SECRETLY INSERTING CHARGES INTO VEHICLE PURCHASE (OR LEASE) CONTRACTS

This is one of the oldest tricks in the book for car dealers because it is so simple. Some unscrupulous car dealers simply insert charges for extra items into vehicle purchase or lease contracts without the customer’s consent. Since these contracts are complex and difficult for many non-lawyers to understand, many people simply don’t notice.

Anti-Packing Provisions in California’s Car Buyer’s Bill of Rights

Payment packing became a little harder for car salesman on July 1, 2006, when the legislature in Sacramento enacted California’s Car Buyer’s Bill of Rights.  One of the many provisions in the Car Buyer’s Bill of Rights is California Vehicle Code Section 11713.19, which states that car dealers must obtain their customers’ consent prior to including any charges for optional items in purchase or lease contracts.  In other words, it is not enough for a car salesman to claim that a consumer agreed to buy optional items by signing the contract – the Car Buyer’s Bill of Rights requires that the consumer agree before the charge is even written into the contract.

A related provision of the Car Buyer’s Bill of Rights requires that prior to obtaining a consumer’s signature on a purchase or lease contract, a dealership must first present the consumer with and get his or her signature on a separate form that lists all of the optional items included in the purchase contract, itemizes their costs, and states what the difference would be in the customer’s monthly payments with and without the optional items.

False Claims by Dealers That Buyers NEED to Purchase Optional Items

Partly because packing became harder in 2006, car dealers developed s similar version of this scam in which the car salesman tells the consumer that he or she NEEDS to buy certain optional items in order for a lender to finance the transaction.  As it turns out, this could almost never be true.  As a general matter, lenders never require the purchase of extra items as a condition of financing because if they did state and federal credit disclosure rules would treat the cost of such items as “finance charges,” they would have to be expressly disclosed as finance charges in the contract, and the A.P.R. stated in the contract would have to be adjusted upward to account for them.  Lenders universally desire to avoid these types of headaches.  Accordingly, if a dealer tells you that optional items are required, you should be immediately on guard.

If you have been a victim of either form of packing, you should contact an experienced California lemon law attorney right away to discuss what legal remedies you may have.

The Law Office of Michael R. Vachon, Esq. offers FREE consultations to discuss your California lemon law or “packing” claims. Call (858) 674-4100 today! Find out how much money you may be entitled to!


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