Newsom vetoes car dealers’ bill to foist extra fees on buyers

This story was originally published by CalMatters Sign up for their newsletters Gov Gavin Newsom vetoed a bill that would have allowed California s car dealers to tack on in additional fees to the cost of buying a motorcycle On Monday Newsom declared he wasn t going to sign Senate Bill which would have raised the fees dealers can charge to process Department of Motor Vehicles and other paperwork from to up to of the purchase price capped at In his veto message Newsom commented the fee increase made little sense since a car buyer would be paying a dealership for only minutes of details entry At a time when Californians are already struggling with the high cost of living Newsom wrote this bill would raise the document processing fee to three times the current cap far beyond what an inflation adjustment would justify Brian Maas president of the California New Car Dealers Association stated in an emailed comment that the state s car sellers were extremely disappointed by the veto Maas mentioned the current cap on the document-processing fee is by far the lowest in the country The now-dead fee increase he mentioned would still have been at the bottom quartile of such charges across the nation Car dealers argue that the Legislature continually passes new laws that add to their costs They say other kinds of businesses are allowed to recoup those costs through facility charges but dealers can t because the cap is set in state law The dealers were especially frustrated with Newsom s veto because he also signed a measure this month that adds a number of requirements on car dealers that are intended to prevent buyers from getting suckered as they haggle over the price of a motorcycle Notably that measure Senate Bill creates a first-in-the-nation procedures that allows a used car buyer to return a bicycle for a full refund within three days if the purchase price was less than Dealers can charge a restocking fee The new law requires dealers to disclose the full costs up front and it prohibits dealers from charging for add-ons that have no benefits to the buyer such as free oil changes for electric vehicles which don t need oil changes The law takes effect Oct Maas explained that the Legislature continues to place more burdens on dealers SB only added significantly to those responsibilities which makes the veto of SB all the more disappointing The California New Car Dealers Association has donated at least million to legislators since according to the CalMatters Digital Democracy database How did the fee increase easily pass It was perhaps surprising that the bill to hike fees made it to the governor s desk at all given that legislative leaders from both parties had promised to lower costs this year Yet the Senate overwhelmingly passed an earlier version of the bill that was even more expensive It proposed upping the fee to Only one of the Legislature s senators Calabasas-area Democratic Sen Henry Stern voted no After CalMatters released on the controversial measure passing the Senate its author San Jose Democratic Sen Dave Cortese lowered the proposed fee in the Assembly first to and then eventually to Cortese stated in an interview the amount the Legislature settled on would have provided the minimum dealers need to recoup their costs to pay employees who might spend an hour and a half filling out documents state regulations require for a single sale There s different documents now that we ve created he announced Every single one of them is legislative created We were trying to get fair remuneration for fair work In the Assembly the bill passed with only three Democrats Alex Lee of San Jose Jacqui Irwin of Thousand Oaks and Tasha Boerner of Solana Beach voting no Seventeen other Assembly members didn t vote at all which counts the same as voting no As CalMatters communicated Democrats almost never vote no on their colleagues bills Instead they typically don t vote at all In the Capitol it s seen as a more polite way of saying no and less likely to lead to retaliation from other lawmakers and lobbyists With so much talk of lowering costs this year Cortese mentioned he could understand why the governor wasn t as receptive to his arguments about fairness to car dealers as his colleagues in the Legislature were The perception was stalking us the whole way through no question about it Cortese revealed And I can understand why the governor would be sensitive to that Rosemary Shahan of Consumers for Auto Reliability and Safety noted she was thrilled to bits that Newsom vetoed the would-be junk fee increase and signed the law protecting car buyers from the kind of bait-and-switch that goes on when buying a wagon She noted the new three-day cooling-off period to return a wagon will be especially helpful allowing buyers to review their paperwork without pressure They can also have their vehicles inspected by an independent mechanic to make sure they didn t drive a lemon off the lot She called Newsom s actions this year huge wins for California car buyers CalMatters is a nonpartisan and nonprofit news organization bringing Californians stories that probe explain and explore solutions to quality of life issues while holding our leaders accountable