State Senator Says Bill Will Protect Consumers As Car Dealers Go Under

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(Sacramento, CA)
Tuesday, January 27, 2009

Groups like Consumers for Auto Reliability and Safety say they’re hearing more and more stories like this one from Chastity Young.  The San Francisco resident traded in her 2003 model car— but still owed on it. She says the dealer promised to pay it off… But a few months later she got a call from the lender saying payments were past due. Young was still the legal owner of the car—the title hadn’t been transferred. 

 “Then around the end of October, they went out of business.  Now I’m stuck with having to make payments on two cars at once. Even though I have one car!”

Democratic State Senator Ellen Corbett has introduced a bill that would do a number of things.  It includes a requirement that dealers pay off cars before selling them—or before the next payment is due.  She says with so many dealers going under—the fallout can be devastating for consumers. 

 “Failing to pay off the title by these dealerships results in ruined credit to consumers, the repossession of their vehicles through no fault of their own.”
The President of the California New Car Dealers Association says the organization has not taken an official position on the measure. However he has raised concerns that the bill could add more time consuming red tape that would create more problems than it solves.