A bill introduced by California Senator Ellen Corbett (D-San Leandro) would expand the damages available to car buyers suing dealers and salespeople for "any fraud or contract or statutory violation ... in connection with the purchase or lease of a motor vehicle."
Current law limits damages to the amount of the vehicle. Senate Bill 95 would also allow "incidental and consequential" damages and "reasonable attorneys fees."
The bill would also require dealers to pay off liens on used cars before reselling them, and would increase the amount of a dealer's bond from $50,000 to $250,000 for a franchisee of new motor vehicles and to $100,000 for independent dealers.
The Civil Justice Association of California (CJAC) has not taken a position on the bill.
Peter Welch, president of the California New Car Dealers Association, told the Contra Costa Times that the bill would punish above-board dealers and likely force hundreds of otherwise strong dealers out of business.