Summary
SB-932 will modify California’s hold harmless protections for private automobile sales, establishing protections for a new owner of a used vehicle from any past due registration fees and penalties carried by the previous owner.
Background
Prohibitive transportation costs can interfere with employment prospects and economic self-sufficiency. Many experts often credit this to affordability, specifically when workers conclude they cannot afford to accept, or even seek, jobs that involve burdensome commutes. About 16% of the average American’s total budget goes to transportation, including vehicle costs and fuel. This makes transportation the second-biggest expenditure after housing but before incidentals like food, education, and saving for retirement. Today’s market makes things even worse: according to Kelly Blue Book the average cost of a new vehicle exceeded $47,000 at the end of 2021, up more than 23% in just two years.
Californians who take the time to do so, can often find better deals by purchasing used cars from private sellers instead of car dealers. However, if it is found after the sale that the car comes with back-fees, the new owner is now on the hook for those fees in addition to any other maintenance that comes with the car. With transportation already counting for a considerable costly chunk for the average household, unexpected fees can lead to more distress instead of less as a new owner of a used car.
As transportation costs rise exponentially, low-income households may face difficult choices between mobility and access on one hand, and household necessities on the other. New owners who have done their due-diligence should have protections from these costly, unplanned, and often hidden fees. The discovery of these fees can strain a family’s budget creating turmoil out of an initially beneficial situation. Additionally, costs have been found to be a key barrier to vehicle ownership, especially among low-income households, and providing protections for families in this increasingly prevalent scenario allows for monetary relief. Currently, in no other scenario is the consumer on the hook for another’s fees. However, the current arbitrary methods of the state’s hold harmless practices for vehicle sales has shielded predatory sales practices of used cars and led to increased consumer monetary loss through weak protections.
Proposal
SB-932 will enhance California’s hold harmless protections for private sales of used automobiles by tying outstanding fees to an individual’s driver’s license, as opposed to a given vehicle, to collect these delinquent fees and penalties from the seller under current practices used to collect fees on delinquent traffic tickets.