Thursday, August 2, 2012
The controversial “Buy Here, Pay Here” used car industry would face strict new regulations under several bills moving through the California legislature.
Search "Buy Here, Pay Here" on Google and the first website that pops up is "WeApproveBadCredit.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 said 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. 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 twenty-five to thirty-three percent," explained Lieu.
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.