California Used Car Laws

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What Laws Govern the Sale of Used Cars in California?

Both federal and state laws apply to the sale of used cars in California. These laws are intended to ensure the rights of dealers while simultaneously protecting consumers. Warranties tend to cause the most friction between dealers and buyers. Below is a quick overview of important bodies of law that deal with used car sales in California.

Federal Laws

1) Uniform Commercial Code – while not technically federal law, all 50 states have adopted some form of the Uniform Commercial Code, making it a good first point of reference when discussing warranties.

The UCC distinguishes between “express warranties” and “implied warranties.” With respect to car sellers, if warranties are going to be excluded, it must be conspicuous and draw the buyer’s attention to the fact that there are no implied or express warranties.

2) Used Car Rule – the Federal Trade Commission (FTC) enacted this rule with the specific intent to discouraged buyers from misrepresenting warranties or omitting material facts about the condition of used cars. This rule is responsible for the promulgation of the “Buyer’s Guide.” The Buyer’s Guide is a piece of paper that must be clearly placed in the window of a used car. This guide should describe at least the following:

Contrary to popular belief, in California simply writing “As Is – No Warranty” does not completely absolve the dealer/seller of any responsibility with selling the vehicle. Perhaps creating this tension is that through the course of dealing, a seller may create express warranties or waive any language excluding implied warranties.

Furthermore, the vehicle must meet all safety requirements as set forth by the Department of Motor Vehicles. Failure to do so may undermine the deal altogether. Finally, misrepresenting any information on the Buyer’s Guide, such as the year, make, and model of a vehicle may qualify as a breach of an express warranty, if not completely undermining the basis of the sale altogether.

3) Magnuson-Moss Warranty Act – The Magnuson-Moss Act was passed by Congress to deal with car dealers misusing their superior knowledge during transactions. There was a recurring trend of many dealers misusing exclusion of warranties. The Act splits warranties into “full” and “limited,” and provides that any dealer making a written warranty to a consumer must fully and conspicuously disclose, in simple and easily understood language, the terms and conditions of the warranty. If the dealer writes an ambiguous warranty, the terms will be construed against them. Failure to abide by the Act will result in steep fines, and a breach of any of terms of the warranty, will make a number of remedies available to buyers, including the potential to collect attorney’s fees.

State Laws

1) Song-Beverly Consumer Warranty Act – the Song-Beverly Act is a set of laws that spell out implied and express warranties, and the obligations of buyers and sellers. Similar to the UCC, Song-Beverly requires that if dealers who are trying to waive implied warranties, they must do so with plain, simple and conspicuous language. One additional protection under Song-Beverly is a requirement that these waivers also conspicuously state the buyer, and not the seller, is responsible for repair costs.

2) Tanner Consumer Protection Act – A section of the Song-Beverly Act, referred to as the Tanner Act, provides that a failure to repair a warranted vehicle may result in restitution to the car owner. It also defines what are required repair attempts.

Repair attempts start to be counter 18 months from delivery of the car or, if it occurs first, 18,000 miles on the odometer. During this time, once of the following constitutes “reasonable attempts”:

Seeking Legal Advice

This area of the law is very dense and complicated. If you have questions about California’s used car laws, speaking with an experienced consumer protection attorney can help you understand how to proceed with the purchase or sale of a used car in California.

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Last Modified: 04-25-2014 04:41 PM PDT

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