The controversial “Buy Here, Pay Here” used car industry would face strict new regulations under several bills moving through the California legislature, the California Capitol Network reports.
Search “Buy Here, Pay Here” on Google and the first website that pops up is “We-Approve-Bad-Credit.com.” Dealers require buyers to make each month’s loan payment in person. If they can’t, their cars are often repossessed on the spot.
Democratic State Senator Ted Lieu says his bill would apply similar regulations for typical auto lenders to the "Buy Here, Pay Here" industry.
“They have a very different business model. They want you to fail," said Lieu. "They actually want you to default on your loan so they can take back the car and then re-sell it. That’s why they have an astronomical default rate of 25 to 33 percent.”
Other bills at the Capitol would require dealers to post a car’s reasonable market price — and prohibit them from using GPS and ignition-override technology to disable vehicles whose owners are late on payments.
The "Buy Here, Pay Here" industry opposes the measures, which will come up for final votes later this summer.