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Support Senate Bill 956

Support Bill That Protects Consumers From Predatory Car Dealers

Thanks to a new bill in the California Senate authored by Senator Ted Lieu, there may finally be something that can be done about the predatory business practices employed by Buy-Here-Pay-Here car dealersships.

What are BHPH Car Dealers?

A Buy-Her-Pay-Here (“BHPH”) dealer is a dealer that doesn’t use outside finance companies. Instead, BHPH dealers finance all of their own sales to consumers. BHPH dealers sell low-quality cars while charging twice the fair market value, and they collect interest rates of up to 30 percent on their sales. Frequently, these cars break down, leaving the buyer with no transportation to get to work, and then the BHPH dealer repossesses the vehicle and sells it to another unlucky consumer. In essence, they are the loans sharks of car dealerships.
Now, thanks to California State Senator Ted Lieu and some of his Senate colleagues, the scourge of BHPH dealers may finally be ending.

Senate Bill 956 Protects Consumers From BHPH Dealers

Senate Bill 956 contains important protections that will prevent BHPH dealers from gouging California consumers and then swooping in to repossess their vehicles. In particular, S.B. 956 would require BHPH dealers to obtain licenses, prohibit them from charging interest rates greater than 17.25 percent, give consumers an 11-day grace period after their payments’ due dates the vehicles can be repossessed, and require BHPH dealers to provide written notices to their customers informing them of their legal rights. S.B. 956 also contains protections for consumers whose vehicles are repossessed by BHPH dealers. S.B. 956 limits the amount of “repossession fees” that BHPH dealers can tack onto vehicle loans to a maximum of $500, and it also gives car buyers 45 days to pay these repossession fees – while allowing them to reclaim their vehicles immediately by paying only the past due monthly payments.

Finally, S.B. 956 is entirely self-financed. Any funds necessary to administer the licensing of BHPH dealers would come from fees paid by the BHPH dealers themselves.

Contact Your State Representatives to Support Senate Bill 956

BHPH dealers are offensive and must not be tolerated. The Vachon Law Firm urges all Californians to contact their representatives in the State Assembly and Senate to express their support for S.B. 956.

About the Author
The Vachon Law Firm is based in Southern California and focuses exclusively on consumer protection litigation.