SACRAMENTO, Calif. — Enlisted service members would receive an automatic 30-day cooling-off period in California when purchasing or leasing vehicles, under a proposal backed Tuesday by the state attorney general and leader of the Senate of the state.
They argued that these people are often the target of predatory auto sales practices. Vehicle dealers near military bases may offer “special deals” for military personnel that actually include inflated prices and financing.
There is no cooling off period for the general public under California law, according to the Department of Motor Vehicles. State law provides a two-day cooling-off period for those who buy a used vehicle for less than $40,000, but only if the buyer purchases a contract-cancellation option agreement.
Most dealerships allow a three-day window, but that’s subject to negotiation, Sen. Susan Talamantes Eggman said.
Under the bill by Talamantes Eggman and pro Tempore Senate Speaker Toni Atkins, the 30-day window to return any purchased or leased vehicle would apply to enlisted service members up to the rank of Army Sergeant, Corps marines and space force, air force. Navy and Coast Guard Staff Sergeant and Petty Officer Second Class.
“This is a very vulnerable group, some of our most junior military members,” said California Attorney General Rob Bonta, who proposed the bill. “They have a little less experience in the world, they are often younger and they are often more vulnerable financially. Their salaries are lower than those of some of the most senior members of the military.
The proposal comes amid soaring prices and reduced vehicle availability due to pent-up demand and supply chain shortages during the coronavirus pandemic.
According to Edmunds.com, eight in 10 new car buyers paid above list price in January, while the price of a used vehicle jumped 39% last fall over a 12-month period . More than half of American families have less income than is considered necessary to purchase a mid-priced used vehicle.
Representatives of the California New Car Dealers Association and the Independent Automobile Dealers Association of California did not respond to requests for comment.
The same pending legislation would make it easier for service members to end auto leases when they are reassigned or deployed.
The provisions are part of a broader consumer protection bill for the military drafted by Talamantes Eggman, who served four years in the U.S. Army as a combat medic and sits on the Senate Military Affairs Committee and veterans.
Bonta said the bill grew out of his office’s investigation and prosecution of companies that target military families, as well as discussions with military personnel, military attorneys and financial advisers.
“The alarming things I heard… made me realize very clearly that our existing laws needed to be strengthened,” Bonta said. “Unfortunately, corporations too often try to take advantage of service members and their families.”
Among other things, the bill would clarify an existing state law that allows members of the California National Guard and Reserve to defer payments on mortgages and other debts while deployed. It also clarifies that service members do not accrue interest on their deferred mortgage obligation.
Another provision expands the right of service members to appear remotely or through a representative in small claims cases seeking to recover improperly withheld security deposits.
Companies would be prohibited from accessing or using personal information on smart military ID cards.
It would also increase military protections under the federal Military Loans Act, the state’s unfair competition law, and prevent companies from offering military discounts on the condition that military members or veterans waive their rights under federal or state law.
The US Department of Veterans Affairs of California and the Veterans Council of California State Commanders, which backed a consumer protection bill for military personnel in 2018, did not immediately comment on the new proposal. .
The bill is set for its first committee hearing on April 19.