In a landmark step to protect consumers from predatory vehicle loans, California Gov. Jerry Brown signed into law two bills regulating specialized used-car dealers known as Buy Here Pay Here lots, according to the L.A. Times.
For the first time, the dealers that offer their own in-house financing and target people with damaged credit and low incomes will be required to provide warranties on every car they sell in California. The new laws also oblige Buy Here Pay Here dealers to post fair-market values on their autos while giving customers greater flexibility in making payments.
The governor stopped short of endorsing wholesale restrictions of the controversial industry, however, by vetoing a third bill. It would have capped interest rates the lots could charge and regulated them as finance lenders monitored by the Department of Corporations, an added layer of bureaucracy that gave the governor pause, the news outlet reported.
All three Buy Here Pay Here bills were introduced this year following a series of Times articles last year exploring the business practices of the industry.
"I signed two 'buy-here-pay-here' consumer protection bills this session," Brown wrote in a message that accompanied his veto of SB 956 by state Sen. Ted Lieu (D-Torrance). "If consumers need added protection once those bills are implemented, my administration will work with the Legislature to find appropriate, measured solutions."