California Liability Law on Used Vehicles

Car buyers that purchase used cars from private sellers can file a complaint with the California DMV for odometer fraud

In California, the Car Buyers Bill of Rights protects consumers that purchase new and used vehicles. Under the state's consumer protection law, used car buyers have rescission periods to cancel their purchases. California further protects used car buyers with mandatory disclosure laws that dealers must comply with prior to completing the invoice or sales transaction. These used car consumer protection laws generally apply to transactions between a used car dealer and car buyer.

Song-Beverly Consumer Warranty Act

The Song-Beverly Consumer Warranty Act is California's lemon law. Under the state's lemon law, manufacturers that cannot remedy a defect under their express car warranties must replace the vehicle or refund the owner for the cost of the transaction. The law covers both buyers and lessees leasing new cars. Under the law, buyers or lessees have the sole discretion to determine whether they would like a replacement car or refund of their fees, including purchase price, taxes, registration fees and incidental damage and repair fees the owner incurred. However, dealers may deduct fees for reasonable use determined by the state's calculation for deduction rules.

Exceptions to the Song-Beverly Consumer Warranty Act

Generally, California's lemon law applies to only new vehicles. However, it applies to used vehicles still covered under an express warranty. For example, car dealers that sell used cars still covered under the general warranty period are bound by the state's lemon law.

Car Buyer's Bill of Rights Rescissions

To provide used car owners with some consumer protections against dealers that sell "lemons," California enacted a rescission law allowing used car buyers with an option to cancel their purchases during a two-day cooling off period. Buyers purchasing used cars for less than $40,000 can cancel their transactions. The rescission rights do not apply to buyers who buy luxury vehicles exceeding $40,000 or buyers who buy cars from private sellers. The rescission rights do not extend to consumers buying RVs, ATVs, commercial-use vans or trucks.

Two-Day Timing

Car dealers can charge a contract cancellation fee up to a limited amount depending on the car's sticker price. Car buyers that buy the option must return their vehicles to their dealers by the end of the second rescission day unless the terms of their agreement provide otherwise. Purchasers have at least 250 miles to drive the car, but dealers can charge reasonable fees for restocking in addition to the charge for the rescission options. Buyers must provide the dealers with all of their original receipts and may not have altered the vehicle or have used it as collateral. Buyers that do not comply with the two-day rescission allowance must receive a nonacceptance letter from the dealer of its refusal to provide a return.

Invoice and Odometer Fraud

Under California law, dealers must provide car buyers with price accounting itemizations for all charges. Dealers must also provide buyers with an inspection report certifying the car's odometer reading and certifying the vehicle did not previously suffer any damage or accident. Dealers that do not comply with these disclosure laws are guilty of violating California Civil Codes by committing odometer fraud or inspection fraud punishable by imprisonment or fines.

Considerations

Since laws can frequently change, you should not use this information as a substitute for legal advice. Seek advice through an attorney licensed to practice law in your jurisdiction.

References

• State of California Department of Justice, Office of the Attorney General: Motor Vehicle Warranty and Lemon Law
• California Department of Motor Vehicles: Car Buyer's Bill of Rights FFVR 35

Resources

• National Highway Traffic Safety Administration, Office of Defects Investigation: Safety Complaints