Lieu bill regulating 'buy here, pay here' car loans passes state Senate State Senate voted 23-12 on Thursday to approve a South Bay lawmaker's bill aimed at regulating car dealers who offer "buy here, pay here" installment loans.
The bill now goes to the Assembly for consideration.
In some cases, consumers pay thousands of dollars more for a vehicle than it's worth while also paying high interest rates, Lieu said. The move sometimes leads to repossession, while the dealer keeps the down payment and resells the same vehicle.
The measure also would limit used-car installment loans to a maximum of 17.2 percent interest. The bill also calls for providing grace periods before a used car is repossessed.
"These buy-here, pay-here used-car dealers take advantage of our lack of laws to prey on desperate workers, low-income families and members of the military by pushing unregulated loans to sell cars for far beyond market value," Lieu said.
- Art Marroquin, Daily Breeze -- June 1, 2012
Senator Lieu wants to protect consumers from predatory car lenders. We would be better served if government would protect us from government mandates attempting to protect us.
How many of us have forgotten Reagan's nine most dangerous words in the English language: "I'm from the government, and I'm here to help."
If consumers are paying far more money at a higher interest rate for a car, then the responsibility for this financial decision lies with the consumer. Every individual purchasing a car must make the necessary effort to shop around and find the best price.
The more that government regulates the sale of automobiles, the fewer options there will be available for individuals when purchasing anything, including cars. Some individuals consumers settle for a higher interest rate because of previous purchase and banking choices. Some people simply have bad credit, and car salesmen should not have to shoulder the risk of selling a vehicle to someone who cannot afford it, or who does not have a record of timely repayment.
This country has already witnessed the massive failure of regulation and subsidy from the government in the housing market. There is no justifiable reason for Sacramento to get involved in the sale of used cars. The market system, left to itself, provides better mechanisms for punishing bad businesses than government ever can provide.
Our legislators need to get out of the way. Senator Lieu, the state of California does not need a lemon law. We need a government that does as little as possible.
The more that government regulates the sale of automobiles, the fewer options there will be available for individuals when purchasing anything, including cars. Some individuals consumers settle for a higher interest rate because of previous purchase and banking choices. Some people simply have bad credit, and car salesmen should not have to shoulder the risk of selling a vehicle to someone who cannot afford it, or who does not have a record of timely repayment.
This country has already witnessed the massive failure of regulation and subsidy from the government in the housing market. There is no justifiable reason for Sacramento to get involved in the sale of used cars. The market system, left to itself, provides better mechanisms for punishing bad businesses than government ever can provide.
Our legislators need to get out of the way. Senator Lieu, the state of California does not need a lemon law. We need a government that does as little as possible.
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