California State Senator Benjamin Allen recently introduced Senate Bill 776, called the California Combating Auto Retail Scams (CARS) Act. This is the first state-backed legislation introduced following the Fifth Circuit vacating the FTC’s Vehicle Shopping Rule.
The bill would impose new regulations on California automotive dealers, many of which tie back to the FTC’s rule. Key provisions include:
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Making it a violation for dealers to misrepresent vehicle sale information, including financing terms, costs, available of vehicles at advertised prices, and benefits of add-ons
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Requiring dealers to clearly state certain disclosures, such as the offering price, total amount the customer will pay, that add-ons are not required, and required downpayment
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Prohibiting dealers from charging for add-on products or services that don’t benefit the customer
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Mandates a 10-day right to cancel cooling off period
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Requiring dealers to maintain necessary records for seven years (an increase from the FTC’s rule)
While the first state-level Vehicle Shopping Rule has been introduced in California, it’s not expected to be the last. The future of F&I compliance is just as much in the air now as it was last year. Don’t wait until tomorrow to get your F&I documents in order, get in touch with an experienced Compliance Consultant today to discuss your free F&I Document Review.