1. AUTO SALES INSTALLMENT CONTRACTS - INTRODUCTION TO HOW CALIFORNIA PROTECTS CAR BUYERS MAKING PAYMENTS

The average car buyer is at a disadvantage when negotiating a contract with a dealership; they have years of experience. That is why California enacted what is officially titled as the "REES-LEVERING AUTO SALES FINANCE ACT"

Rees-Levering sets forth requirements for what MUST be disclosed to an auto sales buyer, PROHIBITS the imposition of certain terms, and requires ALL terms of the contract to be included in a SINGLE document.

Because Rees-Levering includes so many details in its buyer's protection plan it would be difficult to discuss all of the Act's aspects in a few web pages. But we will cover the essentials of this auto sales contract so that you understand exactly what you are signing (or have signed). We will also cover some of the common issues that come up after the sale. Move your MOUSE over the image to the left. Your mouse will show important areas of the contract. Then click to see actual size. (Or just click here to see a sample CONDITIONAL SALES CONTRACT)

The Auto Sales Finance Act covers contracts made with the dealer where the dealer sells/assigns a contract to a bank/finance company which in turn receives the payment from the buyer and holds the vehicle's title/lien until the buyer pays off the vehicle. The Act does not cover automobile loans where the buyer negotiates a loan from a bank (or party other than the seller/dealer) and then pays the vehicle dealer the total cash price.

The Auto Sales Finance Act covers auto sales where the buyer makes a contract that includes monthly payments; that means a "Conditional Sales Contract". Rees-Levering covers all "conditional sales contracts" for most vehicles that are required to be registered with California's Department of Motor Vehicles, including fifth wheels and travel trailers. The Act does not cover leases UNLESS the total lease payments equals the value of vehicle and is a Lease-to-Own contract.