A bill signed by Gov. Jerry Brown will go into effect on July 1, 2012 and require new and used car dealers to mark lemon law vehicles with a red warning sticker. The bill had the support of consumer advocates, law enforcement officials and both the California New Car Dealers Association and the National Independent Automobile Dealers Association (NIADA), which represents used car dealers.

While there is large support for full disclosure of a vehicle’s history, the legislation is not without its critics. Dealers supported the bill largely because it will allow them to charge more for documentation fees, raising the caps from $55 for purchases and $45 for leases to $80 for either.

But another requirement of the law is for dealers to run a vehicle’s identification number through the National Motor Vehicle Title Information System, established by Congress and operated by the Justice Department. Commercial systems like Carfax, AutoCheck and Experian claim that was wrong for the state to mandate one information supplier. An official from Carfax also testified during a hearing in July that the federal check system was far from perfect, but Carfax itself has faced class action lawsuits about the company concealing the limits on the information it collects.

Consumer advocates are hoping the California law will lead to a federal program of the same type. On that level, however, MSN reported on October 3, 2011 that NIADA opposes the idea primarily because of the red warning sticker. “Title brands should be more uniform, branding systems should be accurate and databases should be complete,” said Brad Miller, NIADA’s associate director of legal and regulatory affairs. “Pursuing these goals via a window sticker is an outmoded concept that makes little sense. Instead this type of information should be gathered, maintained and made available to consumers in a uniform electronic format.”

Do you think the red sticker will reduce auto dealership fraud in California? Would you support the state law becoming a federal program? Our California lemon law lawyers want to hear from you. Share your comments with us below, and if you believe that a dealership violated California lemon law in your last car purchase, contact our office today for a free evaluation.

Rosner, Barry & Babbitt, LLP — California lemon law attorneys