(a) No buy-here-pay-here dealer, as that term is defined in Section 241 of the Vehicle Code, shall sell or lease a used vehicle, as defined in Section 665 of the Vehicle Code, at retail price without giving the buyer or lessee a written warranty that shall have a minimum duration of at least 30 days from the date of delivery or when the odometer has registered 1,000 miles from what is shown on the contract, whichever occurs first.
(b) The written warranty shall provide that if the buyer or lessee notifies the buy-here-pay-here dealer that the vehicle does not conform to the written warranty, the buy-here-pay-here dealer shall either repair the vehicle to conform to the written warranty, reimburse the buyer or lessee for the reasonable cost of repairs, or cancel the sale or lease contract and provide the buyer or lessee with a full refund, less a reasonable amount for any damage sustained by the vehicle after the sale or lease, excepting damage caused by any nonconformity with the written warranty.
(c) The written warranty shall provide that the buy-here-pay-here dealer shall pay 100 percent of the cost of labor and parts for any repairs pursuant to the warranty, and may not charge the buyer or lessee for the cost of repairs or for inspecting the vehicle, tearing down the engine or transmission or other part, or for any deductible. Any person performing repairs pursuant to this subdivision shall comply with the requirements of an automotive repair dealer pursuant to Chapter 20.3 (commencing with Section 9880) of Division 3 of the Business and Professions Code.
(d) The buy-here-pay-here dealer or its agent may elect to refund the buyer or lessee a full refund, less a reasonable amount for any damage sustained by the vehicle after the sale or lease, excepting damage caused by any nonconformity with the written warranty, rather than performing a repair. In the event that the buy-here-pay-here dealer cancels the sale or lease, all of the following shall apply:
(1) The buy-here-pay-here dealer shall give written notice to the buyer or lessee of the election to cancel the sale or lease by personal delivery or first-class mail.
(2) The buyer or lessee shall return the vehicle in substantially the same condition as when it was delivered by the buy-here-pay-here dealer, reasonable wear and tear and any nonconformity with the written warranty excepted.
(3) The buy-here-pay-here dealer shall provide the buyer or lessee with a receipt stating all of the following:
(A) The date the vehicle was returned to the buy-here-pay-here dealer.
(B) The vehicle identification number.
(C) The make, year, and model of the vehicle.
(D) The odometer reading at the time that the vehicle was returned to the buy-here-pay-here dealer.
(E) A statement that the buy-here-pay-here dealer has canceled the sale or lease.
(F) The amount of the buyer’s or lessee’s refund.
(4) The buy-here-pay-here dealer shall not treat the return of the vehicle pursuant to the contract cancellation provisions of this subdivision as a repossession.
(5) The buyer or lessee shall execute the documents necessary to transfer any interest in the vehicle to the buy-here-pay-here dealer or to remove the buyer or lessee from any registration or title documents.
(6) The buy-here-pay-here dealer shall refund to the buyer or lessee, no later than the day after the day on which the buyer or lessee returns the vehicle and the notice of election to cancel is given to the buyer or lessee, all amounts paid under the sale or lease agreement, less a reasonable amount for property damage sustained by the vehicle after the sale or lease, excepting damage caused by any nonconformity with the warranty.
(e) The written warranty shall cover at least the following components:
(1) Engine, including all internally lubricated parts.
(2) Transmission and transaxle.
(3) Front and rear wheel drive components.
(4) Engine cooling system.
(5) Alternator, generator, starter, and ignition system, not including the battery.
(6) Braking system.
(7) Front and rear suspension systems.
(8) Steering system and components.
(10) Inflatable restraint systems installed on the vehicle as originally manufactured.
(11) Catalytic converter and other emissions components necessary for the vehicle to pass a California emissions test.
(13) Seals and gaskets on components described in this subdivision.
(14) Electrical, electronic, and computer components, to the extent that those components substantially affect the functionality of other components described in this subdivision.
(f) Any Used Car Buyer’s Guide displayed on a vehicle offered for sale or lease by a buy-here-pay-here dealer shall list each of the above systems and components and shall specify that the buy-here-pay-here dealer will pay 100 percent of the cost of parts and labor for repairs covered by the warranty.
(g) The buy-here-pay-here dealer shall make the repair or provide a refund notwithstanding the fact that the warranty period has expired if the buyer or lessee notified the buy-here-pay-here dealer of the failure of a covered system or part within the warranty period.
(h) This section shall not apply to any defect or nonconformity caused by the unauthorized or unreasonable use of the vehicle following the sale, or to any property damage not to the vehicle arising out of the failure of a covered part.
(i) In any proceeding in which the exclusion of coverage permitted by subdivision (h) or the deduction allowed by paragraph (6) of subdivision (d) is an issue, the buy-here-pay-here dealer shall have the burden of proof.
(j) A buy-here-pay-here dealer shall not sell or lease any vehicle unless the vehicle meets all of the equipment requirements of Division 12 (commencing with Section 24000) of the Vehicle Code.
(k) Any agreement between a buy-here-pay-here dealer and a buyer or lessee that disclaims, limits, or waives the rights set forth in this section shall be void as contrary to public policy.
(l) If a buy-here-pay-here dealer fails to give a buyer a written warranty pursuant to this section, the buy-here-pay-here dealer shall be deemed to have provided the warranty as a matter of law.
(Added by Stats. 2012, Ch. 740, Sec. 2. (AB 1447) Effective January 1, 2013.)
Last modified: October 25, 2018