New Motor Vehicle Board (NMVB) Consumer Mediation Services Program

Mediation FAQ

Q. I feel the dealership where I purchased my vehicle engaged in predatory lending practices by inflating the interest rate on my loan due to my ethnicity, gender, and/or socio-economic status. What can I do?

A. You will want to contact your local District Attorney’s office and the California Attorney General at https://oag.ca.gov/consumers

Q. I bought my new car three days ago and have decided I don't want it. Can I can cancel my contract with the dealer and give them the car back?

A. Probably not. There is no new cooling off period for vehicle sales. Generally speaking, once a consumer signs the contract for a vehicle they are legally bound by it unless financing cannot be secured. Vehicle sales contracts must contain a notice to this effect. The notification is located immediately above the signature line on the contract.

Q. When I negotiated the deal on my new vehicle, I told the salesman I would get my own financing, however, I have been unable to do so and now the dealer says that I must allow them to try.  Is this true?

A. Civil Code section 2982.9 provides that the contract is rescinded when a consumer has expressly notified the sales person of their intention to arrange for their own financing and has been unable to do so.  However, most dealers insist in writing that they be allowed to procure financing if you are unable.

Q. I have subsequently discovered indications that the new vehicle I recently purchased was involved in an accident.  What are my rights?

A. Vehicle Code section 9990 clearly defines the dollar amount of the damage that must be disclosed to the purchaser.  The amount is defined in part as ... damage required repairs having a value, including parts and labor calculated at the repairer's cost, exceeding 3 percent of the manufacturer's suggested retail price of the vehicle or $500 dollars, whichever is greater ...   This applies to new cars only.  The dealership's license can be suspended or revoked if the dealership is found guilty of fraud or deceit (Veh. Code § 11705(14)).

Q. I purchased a service contract for my vehicle, and now I have decided I don't want it.  What can I do?

A. Civil Code section 1794.41 provides that a consumer is entitled to a full refund if they cancel the service contract within 60 days of receiving the contract for a new vehicle, or 30 days in the case of a used vehicle.  A consumer must provide written notice of their cancellation to the dealership.  The notification should be sent certified mail with return receipt requested.  If a claim has been made against the contract within the above time periods, then the consumer is entitled to a pro-rata refund.  Please note that if the vehicle is being financed, the refund will be sent to the lender, not the consumer.

Q. I bought a new car (1) week ago.  The dealership called me today and informed me that they haven't been able to get the vehicle financed at the terms on the contract.  They told me to come to the dealership and sign a new contract at a higher interest rate or give them the car back.  Can they do that?

A. It depends. Many contracts used by dealers contain a provision whereby the customer and the dealer can agree to rescind the contract if the dealer is unable to get the vehicle financed. The provision usually provides that this rescission right can be exercised by the dealer only if the dealer notifies the customer of the rescission within ten (10) days of the date of the contract. If your sales contract contains this provision, then the dealership can rescind the contract. You are entitled to whatever consideration you put toward the vehicle, such as a cash down payment or a vehicle trade-in. The dealership cannot charge you for the mileage that you put on the vehicle while they were looking for a lender. On the other hand, if you still want the vehicle, then you have to renegotiate the terms of the contract, which might include a higher interest rate or a larger down payment.

Q. The dealer refuses to give me a copy of my warranty work orders.  Am I entitled to a copy?

A. Civil Code section 1793.1(a)(2) provides that the dealership shall give the consumer a copy of the warranty work order or repair invoice after completing the repair.

Q. The dealership refuses to perform warranty work on my vehicle because I did not purchase it there.  What can I do?

A. All franchise agreements (contract between the manufacturer and the dealership) require that a dealership perform the warranty work for the particular line it sells, regardless of whether or not the vehicle was purchased from the dealership.  A franchisor can terminate a dealership's sales agreement for failing to perform warranty work (see Veh. Code § 3061 or § 3071).

Q. The transmission on my new vehicle needed repairs after only 400 miles of driving.  Even though it has only happened once, and the vehicle has been in the shop for less than 30 days, I no longer want the vehicle.  What are my rights?  Can the California Lemon Law help me?

A. In order to gain the rebuttable presumption that you are due a refund or replacement under the Lemon Law, you must have four or more unsuccessful repair attempts on the same material defect or 30 days out of service for repairs; the manufacturer or its agents have made four or more attempts to repair the same warranty problem, or the vehicle has been out of service for more than 30 days (not necessarily all at the same time) while being repaired for any number of warranty problems; the manufacturer of its agents have made two or more attempts to repair a warranty problem that results in a condition that is likely to cause death or serious bodily injury if the vehicle is driven. Since the failure has not occurred the required number of times (four or more), the Lemon Law presumption may not aid you in this situation.  However, you may wish to:  consult with a private attorney to determine whether other legal remedies are available to you; or, file a Mediation Request Form with the New Motor Vehicle Board and attempt to resolve the matter through mediation.

Q. When I purchased my vehicle, it did not have a sticker in the window which indicated its price, accessories, etc.  Are new vehicles required to have a sticker in the window?

A. United States Code section 1232 provides that the manufacturer will affix a sticker ("Monroney sticker") to each new automobile.  Dealerships who remove the sticker may be fined $1,000.  Used vehicles must have a Buyer's Guide sticker affixed to the window pursuant to the Code of Federal Regulations, Title 16, Part 455.   

Q. I went to a local dealership to purchase a vehicle.  Somehow I ended up leasing the vehicle.  I want to change the contact from a lease to a purchase.  Can I do that?

A. You should try to work the situation out with the dealership.  If that is not successful, you may wish to file a Mediation Request Form with the New Motor Vehicle Board and attempt to resolve the matter through mediation.

Q. I just purchased a brand new vehicle and I have already had a problem that had to be repaired by the dealer. Shouldn't a brand new vehicle be free of any problems?

A. Not necessarily. Because most vehicles are mass-produced and are made up of hundreds of different parts that are manufactured by different companies, it is inevitable that some new vehicles will have problems. This is precisely why manufacturers provide an original manufacturer warranty with new vehicles. Manufacturers provide such a warranty so that if a new vehicle experiences a problem that is a manufacturing defect (not the result of owner neglect or normal wear and tear), the owner will not have to pay for the repair.

Q. I just purchased a new vehicle and the owner's manual lists when I should have various maintenance procedures completed (often called a vehicle maintenance schedule) such as engine oil changes, tire rotation, engine tune-ups, and transmission services. Must I follow the manufacturer maintenance schedule?

A. Yes. If you fail to have the required maintenance completed on your vehicle at the specified time, e.g., oil change every three months or 3,000 miles, you may render the original manufacturer warranty void for any damage caused by your failure to have the required maintenance completed at the required time.