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The California Senate has approved a bill allowing car dealers to charge buyers up to $500 extra per vehicle, a significant increase from the current cap of $85. This decision, made with bipartisan support, comes despite previous promises from both parties to reduce costs for Californians. The bill, Senate Bill 791, permits dealers to charge up to 1% of a vehicle's purchase price, capped at $500.
The bill's opponents, including consumer advocacy groups, have criticized the move, calling it a betrayal of efforts to lower living expenses. Rosemary Shahan of Consumers for Auto Reliability and Safety stated, "This is the opposite of saving money for people." The legislation passed with only one dissenting vote from Democratic Senator Henry Stern, who argued that car dealers have not earned the trust to justify such fee increases.
Proponents of the bill, including Senator Dave Cortese, who authored the legislation, argue that the fee increase is necessary to cover rising costs associated with processing vehicle paperwork. Cortese acknowledged the bill's potential impact on car prices but emphasized the need to adjust fees to match California's economic conditions. The bill's passage comes as the California New Car Dealers Association, a significant supporter, has donated millions to lawmakers over recent years.
The bill now moves to the Assembly, where further discussions are expected, particularly regarding the fee ceiling. Governor Gavin Newsom's approval is still required for the bill to become law. The legislation exempts state vehicle purchases from the fee, and further adjustments may be made before final approval.