The California Motor Car Dealers Association (CMCDA) announced that Governor Schwarzenegger signed AB 68 (Montanez) this afternoon. The comprehensive measure approved today was the product of countless hours of negotiations between the Governor's office, legislative leaders, consumer groups and car dealers. Among its provisions, the bill addresses the fraudulent practice of "payment packing" and requires specific monthly payment disclosures to curb the practice, provides for a 2- day contract cancellation option for used cars, imposes limits on dealer finance income, requires credit score information be made available to consumers, and defines "certified used cars."

"We are pleased that the Governor signed the bill because it is a win-win situation for consumers and dealers," said Peter Welch, CMCDA President. Surveys indicate that consumers are generally happy with the car buying process experience overall. AB 68 builds on this momentum by providing more transparency in the car buying process, while preserving the ability of dealers to sell the cars and automotive products and services consumers expect.

"One of the most talked about provisions of the bill is the 2-day contract cancellation option," Welch added. "The compromise reached between all the parties on this issue is a fair deal." Consumers can purchase this option for used cars under $40,000, and return the car for any reason. The tiered pricing system for the option makes the benefit more affordable to low-income consumers and those with poor credit.

The provisions of the bill will become operative on July 1, 2006.