SECTIONS 2981-2984.6 - California Statutes

CIVIL CODE

SECTION 2981-2984.6

2981. As used in this chapter, unless the context otherwise
requires:
(a) "Conditional sale contract" means:
(1) A contract for the sale of a motor vehicle between a buyer and
a seller, with or without accessories, under which possession is
delivered to the buyer and either of the following:
(A) The title vests in the buyer thereafter only upon the payment
of all or a part of the price, or the performance of any other
condition.
(B) A lien on the property is to vest in the seller as security
for the payment of part or all of the price, or for the performance
of any other condition.
(2) A contract for the bailment of a motor vehicle between a buyer
and a seller, with or without accessories, by which the bailee or
lessee agrees to pay as compensation for use a sum substantially
equivalent to or in excess of the aggregate value of the vehicle and
its accessories, if any, at the time the contract is executed, and by
which it is agreed that the bailee or lessee will become, or for no
other or for a nominal consideration has the option of becoming, the
owner of the vehicle upon full compliance with the terms of the
contract.
(b) "Seller" means a person engaged in the business of selling or
leasing motor vehicles under conditional sale contracts.
(c) "Buyer" means the person who buys or hires a motor vehicle
under a conditional sale contract.
(d) "Person" includes an individual, company, firm, association,
partnership, trust, corporation, limited liability company, or other
legal entity.
(e) "Cash price" means the amount for which the seller would sell
and transfer to the buyer unqualified title to the motor vehicle
described in the conditional sale contract, if the property were sold
for cash at the seller's place of business on the date the contract
is executed, and shall include taxes to the extent imposed on the
cash sale and the cash price of accessories or services related to
the sale, including, but not limited to, delivery, installation,
alterations, modifications, improvements, document preparation fees,
a service contract, a vehicle contract cancellation option agreement,
and payment of a prior credit or lease balance remaining on property
being traded in.
(f) "Downpayment" means a payment that the buyer pays or agrees to
pay to the seller in cash or property value or money's worth at or
prior to delivery by the seller to the buyer of the motor vehicle
described in the conditional sale contract. The term shall also
include the amount of any portion of the downpayment the payment of
which is deferred until not later than the due date of the second
otherwise scheduled payment, if the amount of the deferred
downpayment is not subject to a finance charge. The term does not
include any administrative finance charge charged, received or
collected by the seller as provided in this chapter.
(g) "Amount financed" means the amount required to be disclosed
pursuant to paragraph (8) of subdivision (a) of Section 2982.
(h) "Unpaid balance" means the difference between subdivision (e)
and subdivision (f), plus all insurance premiums (except for credit
life or disability insurance when the amount thereof is included in
the finance charge), which are included in the contract balance, and
the total amount paid or to be paid as follows:
(1) To a public officer in connection with the transaction.
(2) For license, certificate of title, and registration fees
imposed by law, and the amount of the state fee for issuance of a
certificate of compliance or certificate of waiver pursuant to
Section 9889.56 of the Business and Professions Code.
(i) "Finance charge" has the meaning set forth for that term in
Section 226.4 of Regulation Z. The term shall not include delinquency
charges or collection costs and fees as provided by subdivision (k)
of Section 2982, extension or deferral agreement charges as provided
by Section 2982.3, or amounts for insurance, repairs to or
preservation of the motor vehicle, or preservation of the security
interest therein advanced by the holder under the terms of the
contract.
(j) "Total of payments" means the amount required to be disclosed
pursuant to subdivision (h) of Section 226.18 of Regulation Z. The
term includes any portion of the downpayment that is deferred until
not later than the second otherwise scheduled payment and that is not
subject to a finance charge. The term shall not include amounts for
which the buyer may later become obligated under the terms of the
contract in connection with insurance, repairs to or preservation of
the motor vehicle, preservation of the security interest therein, or
otherwise.
(k) "Motor vehicle" means a vehicle required to be registered
under the Vehicle Code that is bought for use primarily for personal
or family purposes, and does not mean any vehicle that is bought for
use primarily for business or commercial purposes or a mobilehome, as
defined in Section 18008 of the Health and Safety Code that is sold
on or after July 1, 1981. "Motor vehicle" does not include any
trailer that is sold in conjunction with a vessel and that comes
within the definition of "goods" under Section 1802.1.
(l) "Purchase order" means a sales order, car reservation,
statement of transaction or any other such instrument used in the
conditional sale of a motor vehicle pending execution of a
conditional sale contract. The purchase order shall conform to the
disclosure requirements of subdivision (a) of Section 2982 and
Section 2984.1, and subdivision (m) of Section 2982 shall apply.
(m) "Regulation Z" means a rule, regulation or interpretation
promulgated by the Board of Governors of the Federal Reserve System ("
Board") under the federal Truth in Lending Act, as amended (15 U.S.C.
1601, et seq.), and an interpretation or approval issued by an
official or employee of the Federal Reserve System duly authorized by
the board under the Truth in Lending Act, as amended, to issue the
interpretations or approvals.
(n) "Simple-interest basis" means the determination of a finance
charge, other than an administrative finance charge, by applying a
constant rate to the unpaid balance as it changes from time to time
either:
(1) Calculated on the basis of a 365-day year and actual days
elapsed (although the seller may, but need not, adjust its
calculations to account for leap years); reference in this chapter to
the "365-day basis" shall mean this method of determining the
finance charge, or
(2) For contracts entered into prior to January 1, 1988,
calculated on the basis of a 360-day year consisting of 12 months of
30 days each and on the assumption that all payments will be received
by the seller on their respective due dates; reference in this
chapter to the "360-day basis" shall mean this method of determining
the finance charge.
(o) "Precomputed basis" means the determination of a finance
charge by multiplying the original unpaid balance of the contract by
a rate and multiplying that product by the number of payment periods
elapsing between the date of the contract and the date of the last
scheduled payment.
(p) "Service contract" means "vehicle service contract" as defined
in subdivision (c) of Section 12800 of the Insurance Code.
(q) "Surface protection product" means the following products
installed by the seller after the motor vehicle is sold:
(1) Undercoating.
(2) Rustproofing.
(3) Chemical or film paint sealant or protectant.
(4) Chemical sealant or stain inhibitor for carpet and fabric.
(r) "Theft deterrent device" means the following devices installed
by the seller after the motor vehicle is sold:
(1) A vehicle alarm system.
(2) A window etch product.
(3) A body part marking product.
(4) A steering lock.
(5) A pedal or ignition lock.
(6) A fuel or ignition kill switch.

2981.5. A contract for the bailment or leasing of a motor vehicle,
with or without accessories, which establishes the maximum for which
a bailee or lessee could be held liable at the end of the lease or
bailment period, or upon an earlier termination, by reference to the
value of the vehicle at such time, is not a contract by which the
bailee or lessee will become or for no other or for a nominal
consideration has the option of becoming the owner of the vehicle,
for the purposes of paragraph (2) of subdivision (a) of Section 2981
or any other provision of this chapter.

2981.7. All contracts entered into between a buyer and a seller on
or after January 1, 1983, shall provide for the calculation of the
finance charge contemplated by item (A) of paragraph (1) of
subdivision (j) of Section 2982 on the simple-interest basis, if the
date on which the final installment is due, according to the original
terms of the contract, is more than 62 months after the date of the
contract.

2981.8. No contract shall provide for a finance charge which is
determined in part by the precomputed basis and in part by the
simple-interest basis except for any finance charge permitted by
subdivisions (a) and (c) of Section 2982.8.

2981.9. Every conditional sale contract subject to this chapter
shall be in writing and, if printed, shall be printed in type no
smaller than 6-point, and shall contain in a single document all of
the agreements of the buyer and seller with respect to the total cost
and the terms of payment for the motor vehicle, including any
promissory notes or any other evidences of indebtedness. The
conditional sale contract or a purchase order shall be signed by the
buyer or his or her authorized representative and by the seller or
its authorized representative. An exact copy of the contract or
purchase order shall be furnished to the buyer by the seller at the
time the buyer and the seller have signed it. No motor vehicle shall
be delivered pursuant to a contract subject to this chapter until the
seller delivers to the buyer a fully executed copy of the
conditional sale contract or purchase order and any vehicle purchase
proposal and any credit statement which the seller has required or
requested the buyer to sign and which he or she has signed during the
contract negotiations. The seller shall not obtain the signature of
the buyer to a contract when it contains blank spaces to be filled in
after it has been signed.

2982. A conditional sale contract subject to this chapter shall
contain the disclosures required by Regulation Z, whether or not
Regulation Z applies to the transaction. In addition, to the extent
applicable, the contract shall contain the other disclosures and
notices required by, and shall satisfy the requirements and
limitations of, this section. The disclosures required by subdivision
(a) may be itemized or subtotaled to a greater extent than as
required by that subdivision and shall be made together and in the
sequence set forth in that subdivision. All other disclosures and
notices may appear in the contract in any location or sequence and
may be combined or interspersed with other provisions of the
contract.
(a) The contract shall contain the following disclosures, as
applicable, which shall be labeled "itemization of the amount
financed:"
(1) (A) The cash price, exclusive of document preparation fees,
business partnership automation fees, taxes imposed on the sale,
pollution control certification fees, prior credit or lease balance
on property being traded in, the amount charged for a service
contract, the amount charged for a theft deterrent system, the amount
charged for a surface protection product, the amount charged for an
optional debt cancellation agreement, and the amount charged for a
contract cancellation option agreement.
(B) The fee to be retained by the seller for document preparation.
(C) The fee charged by the seller for certifying that the motor
vehicle complies with applicable pollution control requirements.
(D) A charge for a theft deterrent device.
(E) A charge for a surface protection product.
(F) Taxes imposed on the sale.
(G) The amount of any optional business partnership automation fee
to register or transfer the vehicle, which shall be labeled
"Optional DMV Electronic Filing Fee."
(H) The amount charged for a service contract.
(I) The prior credit or lease balance remaining on property being
traded in, as required by paragraph (6). The disclosure required by
this subparagraph shall be labeled "prior credit or lease balance
(see downpayment and trade-in calculation)."
(J) Any charge for an optional debt cancellation agreement.
(K) Any charge for a used vehicle contract cancellation option
agreement.
(L) The total cash price, which is the sum of subparagraphs (A) to
(K), inclusive.
(M) The disclosures described in subparagraphs (D), (E), and (K)
are not required on contracts involving the sale of a motorcycle, as
defined in Section 400 of the Vehicle Code, or on contracts involving
the sale of an off-highway motor vehicle that is subject to
identification under Section 38010 of the Vehicle Code, and the
amounts of those charges, if any, are not required to be reflected in
the total price under subparagraph (L).
(2) Amounts paid to public officials for the following:
(A) Vehicle license fees.
(B) Registration, transfer, and titling fees.
(C) California tire fees imposed pursuant to Section 42885 of the
Public Resources Code.
(3) The aggregate amount of premiums agreed, upon execution of the
contract, to be paid for policies of insurance included in the
contract, excluding the amount of any insurance premium included in
the finance charge.
(4) The amount of the state fee for issuance of a certificate of
compliance, noncompliance, exemption, or waiver pursuant to any
applicable pollution control statute.
(5) A subtotal representing the sum of the foregoing items.
(6) The amount of the buyer's downpayment itemized to show the
following:
(A) The agreed value of the property being traded in.
(B) The prior credit or lease balance, if any, owing on the
property being traded in.
(C) The net agreed value of the property being traded in, which is
the difference between the amounts disclosed in subparagraphs (A)
and (B). If the prior credit or lease balance of the property being
traded in exceeds the agreed value of the property, a negative number
shall be stated.
(D) The amount of any portion of the downpayment to be deferred
until not later than the due date of the second regularly scheduled
installment under the contract and that is not subject to a finance
charge.
(E) The amount of any manufacturer's rebate applied or to be
applied to the downpayment.
(F) The remaining amount paid or to be paid by the buyer as a
downpayment.
(G) The total downpayment. If the sum of subparagraphs (C) to (F),
inclusive, is zero or more, that sum shall be stated as the total
downpayment and no amount shall be stated as the prior credit or
lease balance under subparagraph (I) of paragraph (1). If the sum of
subparagraphs (C) to (F), inclusive, is less than zero, then that
sum, expressed as a positive number, shall be stated as the prior
credit or lease balance under subparagraph (I) of paragraph (1), and
zero shall be stated as the total downpayment. The disclosure
required by this subparagraph shall be labeled "total downpayment"
and shall contain a descriptor indicating that if the total
downpayment is a negative number, a zero shall be disclosed as the
total downpayment and a reference made that the remainder shall be
included in the disclosure required pursuant to subparagraph (I) of
paragraph (1).
(7) The amount of any administrative finance charge, labeled
"prepaid finance charge."
(8) The difference between item (5) and the sum of items (6) and
(7), labeled "amount financed."
(b) No particular terminology is required to disclose the items
set forth in subdivision (a) except as expressly provided in that
subdivision.
(c) If payment of all or a portion of the downpayment is to be
deferred, the deferred payment shall be reflected in the payment
schedule disclosed pursuant to Regulation Z.
(d) If the downpayment includes property being traded in, the
contract shall contain a brief description of that property.
(e) The contract shall contain the names and addresses of all
persons to whom the notice required under Section 2983.2 and
permitted under Sections 2983.5 and 2984 is to be sent.
(f) (1) If the contract includes a finance charge determined on
the precomputed basis, the contract shall identify the method of
computing the unearned portion of the finance charge in the event of
prepayment in full of the buyer's obligation and contain a statement
of the amount or method of computation of any charge that may be
deducted from the amount of any unearned finance charge in computing
the amount that will be credited to the obligation or refunded to the
buyer. The method of computing the unearned portion of the finance
charge shall be sufficiently identified with a reference to the
actuarial method if the computation will be under that method. The
method of computing the unearned portion of the finance charge shall
be sufficiently identified with a reference to the Rule of 78's, the
sum of the digits, or the sum of the periodic time balances method in
all other cases, and those references shall be deemed to be
equivalent for disclosure purposes.
(2) If the contract includes a finance charge that is determined
on the simple-interest basis but provides for a minimum finance
charge in the event of prepayment in full, the contract shall contain
a statement of that fact and the amount of the minimum finance
charge or its method of calculation.
(g) (1) If the contract includes a finance charge that is
determined on the precomputed basis and provides that the unearned
portion of the finance charge to be refunded upon full prepayment of
the contract is to be determined by a method other than actuarial,
the contract shall contain a notice, in at least 10-point boldface
type if the contract is printed, reading as follows: "Notice to
buyer: (1) Do not sign this agreement before you read it or if it
contains any blank spaces to be filled in. (2) You are entitled to a
completely filled-in copy of this agreement. (3) You can prepay the
full amount due under this agreement at any time and obtain a
partial refund of the finance charge if it is $1 or more. Because of
the way the amount of this refund will be figured, the time when you
prepay could increase the ultimate cost of credit under this
agreement. (4) If you default in the performance of your obligations
under this agreement, the vehicle may be repossessed and you may be
subject to suit and liability for the unpaid indebtedness evidenced
by this agreement."
(2) If the contract includes a finance charge that is determined
on the precomputed basis and provides for the actuarial method for
computing the unearned portion of the finance charge upon prepayment
in full, the contract shall contain a notice, in at least 10-point
boldface type if the contract is printed, reading as follows:
"Notice to buyer: (1) Do not sign this agreement before you read it
or if it contains any blank spaces to be filled in. (2) You are
entitled to a completely filled-in copy of this agreement. (3) You
can prepay the full amount due under this agreement at any time and
obtain a partial refund of the finance charge if it is $1 or more.
(4) If you default in the performance of your obligations under this
agreement, the vehicle may be repossessed and you may be subject to
suit and liability for the unpaid indebtedness evidenced by this
agreement."
(3) If the contract includes a finance charge that is determined
on the simple-interest basis, the contract shall contain a notice, in
at least 10-point boldface type if the contract is printed, reading
as follows: "Notice to buyer: (1) Do not sign this agreement before
you read it or if it contains any blank spaces to be filled in. (2)
You are entitled to a completely filled-in copy of this agreement.
(3) You can prepay the full amount due under this agreement at any
time. (4) If you default in the performance of your obligations
under this agreement, the vehicle may be repossessed and you may be
subject to suit and liability for the unpaid indebtedness evidenced
by this agreement."
(h) The contract shall contain a notice in at least 8-point
boldface type, acknowledged by the buyer, that reads as follows:

"If you have a complaint concerning this sale, you should try to
resolve it with the seller.
Complaints concerning unfair or deceptive practices or methods by
the seller may be referred to the city attorney, the district
attorney, or an investigator for the Department of Motor Vehicles, or
any combination thereof.
After this contract is signed, the seller may not change the
financing or payment terms unless you agree in writing to the change.
You do not have to agree to any change, and it is an unfair or
deceptive practice for the seller to make a unilateral change.

-------------------------------
Buyer's Signature"

(i) (1) The contract shall contain an itemization of any insurance
included as part of the amount financed disclosed pursuant to
paragraph (3) of subdivision (a) and of any insurance included as
part of the finance charge. The itemization shall identify the type
of insurance coverage and the premium charged therefor, and, if the
insurance expires before the date of the last scheduled installment
included in the repayment schedule, the term of the insurance shall
be stated.
(2) If any charge for insurance, other than for credit life or
disability, is included in the contract balance and disbursement of
any part thereof is to be made more than one year after the date of
the conditional sale contract, any finance charge on the amount to be
disbursed after one year shall be computed from the month the
disbursement is to be made to the due date of the last installment
under the conditional sale contract.
(j) (1) Except for contracts in which the finance charge or
portion thereof is determined by the simple-interest basis and the
amount financed disclosed pursuant to paragraph (8) of subdivision
(a) is more than two thousand five hundred dollars ($2,500), the
dollar amount of the disclosed finance charge may not exceed the
greater of:
(A) (i) One and one-half percent on so much of the unpaid balance
as does not exceed two hundred twenty-five dollars ($225), 1 1/6
percent on so much of the unpaid balance in excess of two hundred
twenty-five dollars ($225) as does not exceed nine hundred dollars
($900) and five-sixths of 1 percent on so much of the unpaid balance
in excess of nine hundred dollars ($900) as does not exceed two
thousand five hundred dollars ($2,500).
(ii) One percent of the entire unpaid balance; multiplied in
either case by the number of months (computed on the basis of a full
month for any fractional month period in excess of 15 days) elapsing
between the date of the contract and the due date of the last
installment.
(B) If the finance charge is determined by the precomputed basis,
twenty-five dollars ($25).
(C) If the finance charge or a portion thereof is determined by
the simple-interest basis:
(i) Twenty-five dollars ($25) if the unpaid balance does not
exceed one thousand dollars ($1,000).
(ii) Fifty dollars ($50) if the unpaid balance exceeds one
thousand dollars ($1,000) but does not exceed two thousand dollars
($2,000).
(iii) Seventy-five dollars ($75) if the unpaid balance exceeds two
thousand dollars ($2,000).
(2) The holder of the contract may not charge, collect, or receive
a finance charge that exceeds the disclosed finance charge, except
to the extent (A) caused by the holder's receipt of one or more
payments under a contract that provides for determination of the
finance charge or a portion thereof on the 365-day basis at a time or
times other than as originally scheduled whether or not the parties
enter into an agreement pursuant to Section 2982.3, (B) permitted by
paragraph (2), (3), or (4) of subdivision (c) of Section 226.17 of
Regulation Z, or (C) permitted by subdivisions (a) and (c) of Section
2982.8.
(3) If the finance charge or a portion thereof is determined by
the simple-interest basis and the amount of the unpaid balance
exceeds five thousand dollars ($5,000), the holder of the contract
may, in lieu of its right to a minimum finance charge under
subparagraph (C) of paragraph (1), charge, receive, or collect on the
date of the contract an administrative finance charge not to exceed
seventy-five dollars ($75), provided that the sum of the
administrative finance charge and the portion of the finance charge
determined by the simple-interest basis shall not exceed the maximum
total finance charge permitted by subparagraph (A) of paragraph (1).
Any administrative finance charge that is charged, received, or
collected by a holder shall be deemed a finance charge earned on the
date of the contract.
(4) If a contract provides for unequal or irregular payments, or
payments on other than a monthly basis, the maximum finance charge
shall be at the effective rate provided for in paragraph (1), having
due regard for the schedule of installments.
(k) The contract may provide that for each installment in default
for a period of not less than 10 days the buyer shall pay a
delinquency charge in an amount not to exceed in the aggregate 5
percent of the delinquent installment, which amount may be collected
only once on any installment regardless of the period during which it
remains in default. Payments timely received by the seller under an
extension or deferral agreement may not be subject to a delinquency
charge unless the charge is permitted by Section 2982.3. The contract
may provide for reasonable collection costs and fees in the event of
delinquency.
(l) Notwithstanding any provision of a contract to the contrary,
the buyer may pay at any time before maturity the entire indebtedness
evidenced by the contract without penalty. In the event of
prepayment in full:
(1) If the finance charge was determined on the precomputed basis,
the amount required to prepay the contract shall be the outstanding
contract balance as of that date, provided, however, that the buyer
shall be entitled to a refund credit in the amount of the unearned
portion of the finance charge, except as provided in paragraphs (3)
and (4). The amount of the unearned portion of the finance charge
shall be at least as great a proportion of the finance charge,
including any additional finance charge imposed pursuant to Section
2982.8 or other additional charge imposed because the contract has
been extended, deferred, or refinanced, as the sum of the periodic
monthly time balances payable more than 15 days after the date of
prepayment bears to the sum of all the periodic monthly time balances
under the schedule of installments in the contract or, if the
contract has been extended, deferred, or refinanced, as so extended,
deferred, or refinanced. If the amount of the refund credit is less
than one dollar ($1), no refund credit need be made by the holder.
Any refund credit may be made in cash or credited to the outstanding
obligations of the buyer under the contract.
(2) If the finance charge or a portion thereof was determined on
the simple-interest basis, the amount required to prepay the contract
shall be the outstanding contract balance as of that date, including
any earned finance charges that are unpaid as of that date and, if
applicable, the amount provided in paragraph (3), and provided
further that in cases where a finance charge is determined on the
360-day basis, the payments theretofore received will be assumed to
have been received on their respective due dates regardless of the
actual dates on which the payments were received.
(3) Where the minimum finance charge provided by subparagraph (B)
or subparagraph (C) of paragraph (1) of subdivision (j), if either is
applicable, is greater than the earned finance charge as of the date
of prepayment, the holder shall be additionally entitled to the
difference.
(4) The provisions of this subdivision may not impair the right of
the seller or the seller's assignee to receive delinquency charges
on delinquent installments and reasonable costs and fees as provided
in subdivision (k) or extension or deferral agreement charges as
provided in Section 2982.3.
(5) Notwithstanding any provision of a contract to the contrary,
whenever the indebtedness created by any contract is satisfied prior
to its maturity through surrender of the motor vehicle, repossession
of the motor vehicle, redemption of the motor vehicle after
repossession, or any judgment, the outstanding obligation of the
buyer shall be determined as provided in paragraph (1) or (2).
Notwithstanding, the buyer's outstanding obligation shall be computed
by the holder as of the date the holder recovers the value of the
motor vehicle through disposition thereof or judgment is entered or,
if the holder elects to keep the motor vehicle in satisfaction of the
buyer's indebtedness, as of the date the holder takes possession of
the motor vehicle.
(m) Notwithstanding any other provision of this chapter to the
contrary, any information required to be disclosed in a conditional
sale contract under this chapter may be disclosed in any manner,
method, or terminology required or permitted under Regulation Z, as
in effect at the time that disclosure is made, except that permitted
by paragraph (2) of subdivision (c) of Section 226.18 of Regulation
Z, provided that all of the requirements and limitations set forth in
subdivision (a) of this section are satisfied. This chapter does not
prohibit the disclosure in that contract of additional information
required or permitted under Regulation Z, as in effect at the time
that disclosure is made.
(n) If the seller imposes a fee for document preparation, the
contract shall contain a disclosure that the fee is not a
governmental fee.
(o) A seller may not impose an application fee for a transaction
governed by this chapter.
(p) The seller or holder may charge and collect a fee not to
exceed fifteen dollars ($15) for the return by a depository
institution of a dishonored check, negotiated order of withdrawal, or
share draft issued in connection with the contract, if the contract
so provides or if the contract contains a generalized statement that
the buyer may be liable for collection costs incurred in connection
with the contract.
(q) The contract shall disclose on its face, by printing the word
"new" or "used" within a box outlined in red, that is not smaller
than one-half inch high and one-half inch wide, whether the vehicle
is sold as a new vehicle, as defined in Section 430 of the Vehicle
Code, or as a used vehicle, as defined in Section 665 of the Vehicle
Code.
(r) The contract shall contain a notice with a heading in at least
12-point bold type and the text in at least 10-point bold type,
circumscribed by a line, immediately above the contract signature
line, that reads as follows:

THERE IS NO COOLING-OFF PERIOD UNLESS
YOU
OBTAIN A CONTRACT CANCELLATION
OPTION.
California law does not provide for a
"cooling-off" or other cancellation period
for vehicle sales. Therefore, you cannot
later cancel this contract simply because
you change your mind, decide the vehicle
costs too much, or wish you had acquired a
different vehicle. After you sign below, you
may only cancel this contract with the
agreement of the seller or for legal cause,
such as
fraud.
However, California law does require a
seller to offer a 2-day contract
cancellation option on used vehicles with a
purchase price of less than $40,000, subject
to certain statutory conditions. This
contract cancellation option requirement
does not apply to the sale of a recreational
vehicle, a motorcycle, or an off-highway
motor vehicle subject to identification
under California law. See the vehicle
contract cancellation option agreement for
details.

2982.1. It shall be unlawful for any seller to induce or attempt to
induce any person to enter into a contract subject to this chapter
by offering a rebate, discount, commission, or other consideration,
contingent upon the happening of a future event, on the condition
that the buyer either sells, or gives information or assistance for
the purpose of leading to a sale by the seller of, the same or
related goods.

2982.2. (a) Prior to the execution of a conditional sale contract,
the seller shall provide to a buyer, and obtain the buyer's signature
on, a written disclosure that sets forth the following information:
(1) (A) A description and the price of each item sold if the
contract includes a charge for the item.
(B) Subparagraph (A) applies to each item in the following
categories:
(i) A service contract.
(ii) An insurance product.
(iii) A debt cancellation agreement.
(iv) A theft deterrent device.
(v) A surface protection product.
(vi) A vehicle contract cancellation option agreement.
(2) The sum of all of the charges disclosed under subdivision (a),
labeled "total."
(3) The amount that would be calculated under the contract as the
regular installment payment if charges for the items disclosed
pursuant to subdivision (a) are not included in the contract. The
amount disclosed pursuant to this subdivision shall be labeled
"Installment Payment EXCLUDING Listed Items."
(4) The amount that would be calculated under the contract as the
regular installment payment if charges for the items disclosed under
subdivision (a) are included in the contract. The amount disclosed
pursuant to this subdivision shall be labeled "Installment Payment
INCLUDING Listed Items."
(b) The disclosures required under this section shall be in at
least 10-point type and shall be contained in a document that is
separate from the conditional sale contract and a purchase order.
(c) This section does not apply to the sale of a motorcycle as
defined in Section 400 of the Vehicle Code or an off-highway vehicle
subject to identification under Section 38010 of the Vehicle Code.

2982.3. (a) The holder of a conditional sale contract may, upon
agreement with the buyer, extend the scheduled due date or defer the
scheduled payment of all or of any part of any installment or
installments payable thereunder. No charge shall be made for any such
extension or deferment unless the agreement for such extension or
deferment is in writing and signed by the parties thereto. However,
the seller or holder may, as an adjunct to or to assist in efforts to
collect one or more delinquent installments on the contract, advise
one or more obligors on the contract, either in writing or orally,
that the due date for one or more installments under the contract
shall be extended, with no charge being made for such extension other
than any applicable late charge provided for in the contract.
(b) Where the contract includes a finance charge determined on the
precomputed basis, the holder may charge and contract for the
payment of an extension or deferral agreement charge by the buyer and
collect and receive the same, but such charge may not exceed an
amount equal to 1 percent per month simple interest on the amount of
the installment or installments, or part thereof, extended or
deferred for the period of extension or deferral. Such period shall
not exceed the period from the date when such extended or deferred
installment or installments, or part thereof, would have been payable
in the absence of such extension or deferral to the date when such
installment or installments, or part thereof, are made payable under
the agreement of extension or deferment; except that a minimum charge
of one dollar ($1) for the period of extension or deferral may be
made in any case where the extension or deferral agreement charge,
when computed at such rate, amounts to less than one dollar ($1).
(c) Where the contract includes a finance charge determined on the
simple-interest basis, the holder may charge and contract for the
payment of an extension or deferral agreement charge by the buyer and
collect and receive the same, but the charge for the extension or
deferral agreement may not exceed the lesser of twenty-five dollars
($25) or 10 percent of the then outstanding principal balance of the
contract. Such charge shall be in addition to any finance charges
which accrue because such extended or deferred payments are received
at a time other than as originally scheduled.

2982.5. (a) This chapter may not be deemed to affect a loan, or the
security therefor, between a purchaser of a motor vehicle and a
supervised financial organization, other than the seller of the motor
vehicle, all or a portion of which loan is used in connection with
the purchase of a motor vehicle. As used in this chapter, "supervised
financial organization" means a person organized, chartered, or
holding a license or authorization certificate under a law of this
state or the United States to make loans and subject to supervision
by an official or agency of this state or the United States.
(b) This chapter may not be deemed to prohibit the seller's
assisting the buyer in obtaining a loan upon any security from any
third party to be used as a part or all of the downpayment or any
other payment on a conditional sale contract or purchase order;
provided that the conditional sale contract sets forth on its face
the amount of the loan, the finance charge, the total thereof, the
number of installments scheduled to repay the loan and the amount of
each installment, that the buyer may be required to pledge security
for the loan, which security shall be mutually agreed to by the buyer
and the lender and notice to the buyer in at least 8-point type that
he or she is obligated for the installment payments on both the
conditional sale contract and the loan. The seller may not provide
any security or other guarantee of payment on the loan, nor shall the
seller receive any commission or other remuneration for assisting
the buyer to obtain the loan. If the buyer obligates himself or
herself to purchase, or receives possession of, the motor vehicle
prior to securing the loan, and if the buyer upon appropriate
application for the loan is unable to secure the loan, on the
conditions stated in the conditional sale contract, the conditional
sale contract or purchase order shall be deemed rescinded and all
consideration thereupon shall be returned by the respective parties
without demand.
(c) The proceeds of any loan payable to the seller after the date
of the contract but prior to the due date of the second payment
otherwise scheduled thereunder may not be subject to a finance charge
and the amount thereof shall be disclosed pursuant to subparagraph
(D) of paragraph (6) of subdivision (a) of Section 2982.
(d) This chapter may not be deemed to prohibit the seller's
assisting the buyer in obtaining a loan from any third party to be
used to pay for the full purchase price, or any part thereof, of a
motor vehicle, if each of the following provisions applies:
(1) The loan may be upon any security, but except as provided in
paragraph (2), the loan may not be secured in whole or in part by a
lien on real property. Any lien on real property taken in violation
of this section shall be void and unenforceable.
(2) A lien on real property may be taken to secure a loan of seven
thousand five hundred dollars ($7,500) or more used to pay the full
purchase price, or any part thereof, of a recreational vehicle, as
defined in Section 18010 of the Health and Safety Code, which is not
less than 20 feet in length.
(3) The provisions of Sections 2983.2, 2983.3, and 2984.4 shall
apply to the loan, but may not authorize the lender or the lender's
successor in interest to charge for any costs, fees, or expenses or
to obtain any other benefit which the lender is prohibited from
charging or obtaining under any regulatory law applicable to the
lender. Notwithstanding this paragraph, the provisions of Sections
2983.2 and 2983.3 may not apply to a loan made by a lender licensed
under Division 9 (commencing with Section 22000) or Division 10
(commencing with Section 24000) of the Financial Code.
(4) The lender or the lender's successor in interest shall be
subject to all claims and defenses which the buyer could assert
against the seller, but liability may not exceed the amount of the
loan.
(5) If the buyer becomes obligated to purchase, or receives
possession of, the motor vehicle prior to obtaining the loan, the
agreement between the buyer and the seller shall set forth on its
face the amount of the loan, the finance charge, the total thereof,
the number of installments scheduled to repay the loan and the amount
of each installment, that the buyer may be required to pledge
security for the loan, which security must be mutually agreed to by
the buyer and the lender, and notice to the buyer in at least 8-point
type that the buyer is obligated for the installment payments on the
loan and for any payments which may be due on the agreement between
the buyer and the seller. The seller may not provide any security or
other guarantee of payment on the loan, and the seller may not
receive any commission or other remuneration for assisting the buyer
to obtain the loan. If the buyer upon proper application for the loan
is unable to obtain the loan, on the condition stated in the
agreement between the buyer and the seller, the agreement shall be
deemed rescinded and all consideration thereupon shall be returned by
the respective parties without demand.
(6) Any waiver by the buyer of the provisions of this section
shall be void and unenforceable.
This subdivision does not apply to state or federally chartered
banks and savings and loan associations and may not be construed to
affect existing law regarding a seller's assisting a buyer to obtain
a loan from a bank or savings and loan association or any loan
obtained by the buyer from those lenders.

2982.7. (a) Any payment made by a buyer to a seller pending
execution of a conditional sale contract shall be refunded to the
buyer in the event the conditional sale contract is not executed.
(b) In the event of breach by the seller of a conditional sale
contract or purchase order where the buyer leaves his motor vehicle
with the seller as downpayment and such motor vehicle is not returned
by the seller to the buyer for whatever reason, the buyer may
recover from the seller either the fair market value of the motor
vehicle left as a downpayment or its value as stated in the contract
or purchase order, whichever is greater. The recovery shall be
tendered to the buyer within five business days after the breach.
(c) The remedies of the buyer provided for in subdivision (b) are
nonexclusive and cumulative and shall not preclude the buyer from
pursuing any other remedy which he may have under any other provision
of law.

2982.8. (a) If a buyer is obligated under the terms of the
conditional sale contract to maintain insurance on the vehicle and
subsequent to the execution of the contract the buyer either fails to
maintain or requests the holder to procure the insurance, any
amounts advanced by the holder to procure the insurance may be the
subject of finance charges from the date of advance as provided in
subdivision (e).
(b) These amounts shall be secured as provided in the contract and
permitted by Section 2984.2 if the holder notifies the buyer in
writing of his or her option to repay those amounts in any one of the
following ways:
(1) Full payment within 10 days from the date of giving or mailing
the notice.
(2) Full amortization during the term of the insurance.
(3) If offered by the holder, full amortization after the term of
the conditional sale contract, to be payable in installments which do
not exceed the average payment allocable to a monthly period under
the contract.
(4) If offered by the holder, a combination of the methods
described in paragraphs (2) and (3), so that there is some
amortization during the term of the insurance, with the remainder of
the amortization being accomplished after the term of the conditional
sale contract, to be payable in installments which do not exceed the
average payment allocable to a monthly period under the original
terms of the contract.
(5) If offered by the holder, any other amortization plan.
If the buyer neither pays in full the amounts advanced nor
notifies the holder in writing of his or her choice regarding
amortization options before the expiration of 10 days from the date
of giving or mailing the notice by the holder, the holder may
amortize the amounts advanced on a secured basis pursuant to
paragraph (2) or, if offered by the holder as an option to the buyer,
paragraph (3) or (4).
(c) The written notification described in subdivision (b) shall
also set forth the amounts advanced by the holder and, with respect
to each amortization plan the amount of the additional finance
charge, the sum of the amounts advanced and the additional finance
charge, the number of installments required, the amount of each
installment and the date for payment of the installments.
In addition, the notice shall contain a statement in contrasting
red print in at least 8-point bold type, which reads as follows:
"WARNING--IT IS YOUR RESPONSIBILITY UNDER CALIFORNIA LAW TO OBTAIN
LIABILITY INSURANCE OR BE SUBJECT TO PENALTIES FOR VIOLATING SECTION
16020 OF THE VEHICLE CODE, WHICH MAY INCLUDE LOSS OF LICENSE OR A
FINE. THE INSURANCE ACQUIRED BY THE LIENHOLDER DOES NOT PROVIDE
LIABILITY COVERAGE AND DOES NOT SATISFY YOUR RESPONSIBILITY UNDER
CALIFORNIA LAW."

(d) If subsequent to the execution of the contract the holder
advances amounts for repairs to or preservation of the motor vehicle
or preservation of the holder's security interest therein and such
advances are occasioned by the buyer's default under the contract,
such advances may be the subject of finance charges from the date of
advance as provided in subdivision (e) and shall be secured as
provided in the contract and permitted by Section 2984.2.
(e) The maximum rate of finance charge which may be imposed on
amounts advanced by the holder subsequent to the execution of the
contract for insurance, repairs to or preservation of the motor
vehicle, or preservation of the holder's security interest therein,
shall not exceed the annual percentage rate disclosed pursuant to
Section 2982.

2982.9. In the event a buyer obligates himself to purchase, or
receive possession of, a motor vehicle pursuant to a contract or
purchase order, and the seller knows that the buyer intends to obtain
financing from a third party without the assistance of the seller,
and the buyer is unable to obtain such financing, the contract or
purchase order shall be deemed rescinded and all consideration
thereupon shall be returned by the respective parties without demand.

2982.10. (a) In consideration of the assignment of a conditional
sale contract, the seller shall not receive or accept from the
assignee any payment or credit based upon any amount collected or
received, or to be collected or received, under the contract as a
finance charge except to the extent the payment or credit does not
exceed the amount that would be calculated in accordance with
Regulation Z, whether or not Regulation Z applies to the contract, as
the contract's finance charge using, for the purposes of the
calculation, an annual percentage rate equal to 2.5 percent for a
contract having an original scheduled term of 60 monthly payments or
less or 2 percent for a contract having an original scheduled term of
more than 60 monthly payments.
(b) Subdivision (a) does not apply in the following circumstances:
(1) An assignment that is with full recourse or under other terms
requiring the seller to bear the entire risk of financial performance
of the buyer.
(2) An assignment that is more than six months following the date
of the conditional sale contract.
(3) Isolated instances resulting from bona fide errors that would
otherwise constitute a violation of subdivision (a) if the seller
maintains reasonable procedures to guard against any errors and
promptly, upon notice of the error, remits to the assignee any
consideration received in excess of that permitted by subdivision
(a).
(4) The assignment of a conditional sale contract involving the
sale of a motorcycle, as defined in Section 400 of the Vehicle Code.
(5) The assignment of a conditional sale contract involving the
sale of an off-highway motor vehicle that is subject to
identification under Section 38010 of the Vehicle Code.

2983. If the seller, except as the result of an accidental or bona
fide error in computation, violates any provision of Section 2981.9
or of subdivision (a), (j), or (k) of Section 2982, the conditional
sale contract shall not be enforceable, except by a bona fide
purchaser, assignee or pledgee for value or until after the violation
is corrected as provided in Section 2984, and if the violation is
not corrected the buyer may recover from the seller the total amount
paid, pursuant to the terms of the contract, by the buyer to the
seller or his assignee. The amount recoverable for property traded in
as all or part of the downpayment shall be equal to the agreed cash
value of such property as the value appears on the conditional sale
contract or the fair market value of such property as of the time the
contract is made, whichever is greater.

2983.1. If the seller or holder of a conditional sale contract,
except as the result of an accidental or bona fide error of
computation, violates any provision of subdivision (l) of Section
2982, the buyer may recover from such person three times the amount
of any finance charge paid to that person.
If a holder acquires a conditional sale contract without actual
knowledge of the violation by the seller of Section 2981.9 or of
subdivision (a), (j), or (k) of Section 2982, the contract shall be
valid and enforceable by such holder except (unless the violation is
corrected as provided in Section 2984) the buyer is excused from
payment of the unpaid finance charge.
If a holder acquires a conditional sale contract with knowledge of
such violation of Section 2981.9 or of subdivision (a), (j), or (k)
of Section 2982, the conditional sale contract shall not be
enforceable except by a bona fide purchaser, assignee or pledgee for
value or unless the violation is corrected as provided in Section
2984, and if the violation is not corrected the buyer may recover
from the person to whom payment was made the amounts specified in
Section 2983.
When a conditional sale contract is not enforceable under Section
2983 or 2983. 1, the buyer may elect to retain the motor vehicle and
continue the contract in force or may, with reasonable diligence,
elect to rescind the contract and return the motor vehicle. The value
of the motor vehicle so returned shall be credited as restitution by
the buyer without any decrease which results from the passage of
time in the cash price of the motor vehicle as such price appears on
the conditional sale contract.

2983.2. (a) Except where the motor vehicle has been seized as
described in paragraph (6) of subdivision (b) of Section 2983.3, any
provision in any conditional sale contract for the sale of a motor
vehicle to the contrary notwithstanding, at least 15 days' written
notice of intent to dispose of a repossessed or surrendered motor
vehicle shall be given to all persons liable on the contract. The
notice shall be personally served or shall be sent by certified mail,
return receipt requested, or first-class mail, postage prepaid,
directed to the last known address of the persons liable on the
contract. If those persons are married to each other, and, according
to the most recent records of the seller or holder of the contract,
reside at the same address, one notice addressed to both persons at
that address is sufficient. Except as otherwise provided in Section
2983.8, those persons shall be liable for any deficiency after
disposition of the repossessed or surrendered motor vehicle only if
the notice prescribed by this section is given within 60 days of
repossession or surrender and does all of the following:
(1) Sets forth that those persons shall have a right to redeem the
motor vehicle by paying in full the indebtedness evidenced by the
contract until the expiration of 15 days from the date of giving or
mailing the notice and provides an itemization of the contract
balance and of any delinquency, collection or repossession costs and
fees and sets forth the computation or estimate of the amount of any
credit for unearned finance charges or canceled insurance as of the
date of the notice.
(2) States either that there is a conditional right to reinstate
the contract until the expiration of 15 days from the date of giving
or mailing the notice and all the conditions precedent thereto or
that there is no right of reinstatement and provides a statement of
reasons therefor.
(3) States that, upon written request, the seller or holder shall
extend for an additional 10 days the redemption period or, if
entitled to the conditional right of reinstatement, both the
redemption and reinstatement periods. The seller or holder shall
provide the proper form for applying for the extensions with the
substance of the form being limited to the extension request, spaces
for the requesting party to sign and date the form, and instructions
that it must be personally served or sent by certified or registered
mail, return receipt requested, to a person or office and address
designated by the seller or holder and received before the expiration
of the initial redemption and reinstatement periods.
(4) Discloses the place at which the motor vehicle will be
returned to those persons upon redemption or reinstatement.
(5) Designates the name and address of the person or office to
whom payment shall be made.
(6) States the seller's or holder's intent to dispose of the motor
vehicle upon the expiration of 15 days from the date of giving or
mailing the notice, or if by mail and either the place of deposit in
the mail or the place of address is outside of this state, the period
shall be 20 days instead of 15 days, and further, that upon written
request to extend the redemption period and any applicable
reinstatement period for 10 days, the seller or holder shall without
further notice extend the period accordingly.
(7) Informs those persons that upon written request, the seller or
holder will furnish a written accounting regarding the disposition
of the motor vehicle as provided for in subdivision (b). The seller
or holder shall advise them that this request must be personally
served or sent first-class mail, postage prepaid, or certified mail,
return receipt requested, to a person or office and address
designated by the seller or holder.
(8) Includes notice, in at least 10-point bold type if the notice
is printed, reading as follows: "NOTICE. YOU MAY BE SUBJECT TO SUIT
AND LIABILITY IF THE AMOUNT OBTAINED UPON DISPOSITION OF THE VEHICLE
IS INSUFFICIENT TO PAY THE CONTRACT BALANCE AND ANY OTHER AMOUNTS
DUE."
(9) Informs those persons that upon the disposition of the motor
vehicle, they will be liable for the deficiency balance plus interest
at the contract rate, or at the legal rate of interest pursuant to
Section 3289 if there is no contract rate of interest, from the date
of disposition of the motor vehicle to the date of entry of judgment.
The notice prescribed by this section shall not affect the
discretion of the court to strike out an unconscionable interest rate
in the contract for which the notice is required, nor affect the
court in its determination of whether the rate is unconscionable.
(b) Unless automatically provided to the buyer within 45 days
after the disposition of the motor vehicle, the seller or holder
shall provide to any person liable on the contract within 45 days
after their written request, if the request is made within one year
after the disposition, a written accounting regarding the
disposition. The accounting shall itemize:
(1) The gross proceeds of the disposition.
(2) The reasonable and necessary expenses incurred for retaking,
holding, preparing for and conducting the sale and to the extent
provided for in the agreement and not prohibited by law, reasonable
attorney fees and legal expenses incurred by the seller or holder in
retaking the motor vehicle from any person not a party to the
contract.
(3) The satisfaction of indebtedness secured by any subordinate
lien or encumbrance on the motor vehicle if written notification of
demand therefor is received before distribution of the proceeds is
completed. If requested by the seller or holder, the holder of a
subordinate lien or encumbrance must seasonably furnish reasonable
proof of its interest, and unless it does so, the seller or holder
need not comply with its demand.
(c) In all sales which result in a surplus, the seller or holder
shall furnish an accounting as provided in subdivision (b) whether or
not requested by the buyer. Any surplus shall be returned to the
buyer within 45 days after the sale is conducted.
(d) This section shall not apply to a loan made by a lender
licensed under Division 9 (commencing with Section 22000) or Division
10 (commencing with Section 24000) of the Financial Code.

2983.3. (a) In the absence of default in the performance of any of
the buyer's obligations under the contract, the seller or holder may
not accelerate the maturity of any part or all of the amount due
thereunder or repossess the motor vehicle.
(b) If after default by the buyer, the seller or holder
repossesses or voluntarily accepts surrender of the motor vehicle,
any person liable on the contract shall have a right to reinstate the
contract and the seller or holder shall not accelerate the maturity
of any part or all of the contract prior to expiration of the right
to reinstate, unless the seller or holder reasonably and in good
faith determines that any of the following has occurred:
(1) The buyer or any other person liable on the contract by
omission or commission intentionally provided false or misleading
information of material importance on his or her credit application.
(2) The buyer, any other person liable on the contract, or any
permissive user in possession of the motor vehicle, in order to avoid
repossession has concealed the motor vehicle or removed it from the
state.
(3) The buyer, any other person liable on the contract, or any
permissive user in possession of the motor vehicle, has committed or
threatens to commit acts of destruction, or has failed to take care
of the motor vehicle in a reasonable manner, so that the motor
vehicle has become substantially impaired in value, or the buyer, any
other person liable on the contract, or any nonoccasional permissive
user in possession of the motor vehicle has failed to take care of
the motor vehicle in a reasonable manner, so that the motor vehicle
may become substantially impaired in value.
(4) The buyer or any other person liable on the contract has
committed, attempted to commit, or threatened to commit criminal acts
of violence or bodily harm against an agent, employee, or officer of
the seller or holder in connection with the seller's or holder's
repossession of or attempt to repossess the motor vehicle.
(5) The buyer has knowingly used the motor vehicle, or has
knowingly permitted it to be used, in connection with the commission
of a criminal offense, other than an infraction, as a consequence of
which the motor vehicle has been seized by a federal, state, or local
agency or authority pursuant to federal, state, or local law.
(6) The motor vehicle has been seized by a federal, state, or
local public agency or authority pursuant to (A) Section 1324 of
Title 8 of the United States Code or Part 274 of Title 8 of the Code
of Federal Regulations, (B) Section 881 of Title 21 of the United
States Code or Part 9 of Title 28 of the Code of Federal Regulations,
or (C) other federal, state, or local law, including regulations,
and, pursuant to that other law, the seizing authority, as a
precondition to the return of the motor vehicle to the seller or
holder, prohibits the return of the motor vehicle to the buyer or
other person liable on the contract or any third person claiming the
motor vehicle by or through them or otherwise effects or requires the
termination of the property rights in the motor vehicle of the buyer
or other person liable on the contract or claimants by or through
them.
(c) Exercise of the right to reinstate the contract shall be
limited to once in any 12-month period and twice during the term of
the contract.
(d) The provisions of this subdivision cover the method by which a
contract shall be reinstated with respect to curing events of
default which were a ground for repossession or occurred subsequent
to repossession:
(1) Where the default is the result of the buyer's failure to make
any payment due under the contract, the buyer or any other person
liable on the contract shall make the defaulted payments and pay any
applicable delinquency charges.
(2) Where the default is the result of the buyer's failure to keep
and maintain the motor vehicle free from all encumbrances and liens
of every kind, the buyer or any other person liable on the contract
shall either satisfy all encumbrances and liens or, in the event the
seller or holder satisfies the encumbrances and liens, the buyer or
any other person liable on the contract shall reimburse the seller or
holder for all reasonable costs and expenses incurred therefor.
(3) Where the default is the result of the buyer's failure to keep
and maintain insurance on the motor vehicle, the buyer or any other
person liable on the contract shall either obtain the insurance or,
in the event the seller or holder has obtained the insurance, the
buyer or any other person liable on the contract shall reimburse the
seller or holder for premiums paid and all reasonable costs and
expenses, including, but not limited to, any finance charge in
connection with the premiums permitted by Section 2982.8, incurred
therefor.
(4) Where the default is the result of the buyer's failure to
perform any other obligation under the contract, unless the seller or
holder has made a good faith determination that the default is so
substantial as to be incurable, the buyer or any other person liable
on the contract shall either cure the default or, if the seller or
holder has performed the obligation, reimburse the seller or holder
for all reasonable costs and expenses incurred in connection
therewith.
(5) Additionally, the buyer or any other person liable on the
contract shall, in all cases, reimburse the seller or holder for all
reasonable and necessary collection and repossession costs and fees
incurred, including attorney's fees and legal expenses expended in
retaking and holding the vehicle.
(e) If the seller or holder denies the right to reinstatement
under subdivision (b) or paragraph (4) of subdivision (d), the seller
or holder shall have the burden of proof that the denial was
justified in that it was reasonable and made in good faith. If the
seller or holder fails to sustain the burden of proof, the seller or
holder shall not be entitled to a deficiency, but it shall not be
presumed that the buyer is entitled to damages by reason of the
failure of the seller or holder to sustain the burden of proof.
(f) This section shall not apply to a loan made by a lender
licensed under Division 9 (commencing with Section 22000) or Division
10 (commencing with Section 24000) of the Financial Code.

2983.35. (a) If a creditor has requested a cosigner as a condition
of granting credit to any person for the purpose of acquisition of a
motor vehicle, the creditor or holder shall give the cosigner a
written notice of delinquency prior to the repossession of the motor
vehicle if the motor vehicle is to be repossessed pursuant to the
motor vehicle credit agreement. The written notice of delinquency
shall be personally served or shall be sent by certified mail, return
receipt requested, or first-class mail, postage prepaid, directed to
the last known address of the cosigner. If the last known address of
the buyer and the cosigner are the same, a single written notice of
delinquency given to both the borrower and cosigner prior to
repossession satisfies the cosigner notice requirement of this
section.
(b) A creditor or holder who fails to comply with this section may
not recover any costs associated with the repossession of the
vehicle from the cosigner.
(c) This section applies to any motor vehicle cred