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Released: January 10, 2012
Bill would regulate Buy Here Pay Here used-car lots
Source: Ken Bensinger, L.A.Times (Free Registration)
Used-car dealers known as Buy Here Pay Here lots would be regulated by the state as lenders under new legislation aimed at curbing what some critics say are abusive and predatory lending practices.
The bill, SB 956, would require Buy Here Pay Here dealers to be regulated by the Department of Corporations as lenders. That’s because, unlike conventional dealerships, they finance car purchases themselves, offering buyers what are essentially installment plans.
Focusing on customers with bad credit, dealers often charge triple the book value for older used cars and charge interest rates that can top 30%. Some employ a business model that ratchets up profits by repossessing the same car multiple times, reselling it to new customers each time.
Read Full Article: Bill would regulate Buy Here Pay Here used-car lots
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