Section 11709.4 Of Article 1. Issuance Of Licenses And Certificates To Manufacturers, Transporters, And Dealers From California Vehicle Code >> Division 5. >> Chapter 4. >> Article 1.
11709.4
. (a) When a dealer purchases or obtains a vehicle in trade
in a retail sale or lease transaction and the vehicle is subject to a
prior credit or lease balance, all of the following apply:
(1) If the dealer agreed to pay a specified amount on the prior
credit or lease balance owing on the vehicle purchased or obtained in
trade, and the agreement to pay the specified amount is contained in
a written agreement documenting the transaction, the dealer shall
tender the agreed upon amount as provided in the written agreement to
the lessor registered in accordance with Section 4453.5, or to the
legal owner reflected on the ownership certificate, or to the
designee of that lessor or legal owner of the vehicle purchased or
obtained in trade within 21 calendar days of purchasing or obtaining
the vehicle in trade.
(2) If the dealer did not set forth an agreement regarding payment
of a prior credit or lease balance owed on the vehicle purchased or
obtained in trade, in a written agreement documenting the
transaction, the dealer shall tender to the lessor registered in
accordance with Section 4453.5, or to the legal owner reflected on
the ownership certificate, or to the designee of that lessor or legal
owner of the vehicle purchased or obtained in trade, an amount
necessary to discharge the prior credit or lease balance owing on the
vehicle purchased or obtained in trade within 21 calendar days of
purchasing or obtaining the vehicle in trade.
(3) The time period specified in paragraph (1) or (2) may be
shortened if the dealer and consumer agree, in writing, to a shorter
time period.
(4) A dealer shall not sell, consign for sale, or transfer any
ownership interest in the vehicle purchased or obtained in trade
until an amount necessary to discharge the prior credit or lease
balance owing on the vehicle has been tendered to the lessor
registered in accordance with Section 4453.5, or to the legal owner
reflected on the ownership certificate, or to the designee of that
lessor or legal owner of the vehicle purchased or obtained in trade.
(b) A dealer does not violate this section if the dealer
reasonably and in good faith gives notice of rescission of the
contract promptly, but no later than 21 days after the date on which
the vehicle was purchased or obtained in trade, and the contract is
thereafter rescinded on any of the grounds in Section 1689 of the
Civil Code.