Woodland Hills, CA asked in Banking, Civil Litigation, Consumer Law and Contracts for California

Q: Under consumer protection laws, what criteria are used to determine if contractual terms

Under consumer protection laws, what criteria are used to determine if contractual terms in an auto loan agreement, specifically regarding trade-ins, are considered unfair or one-sided? Are there any specific provisions or practices that should be examined to assess the fairness of these terms?

1 Lawyer Answer
James L. Arrasmith
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  • Consumer Law Lawyer
  • Sacramento, CA
  • Licensed in California

A: Under California's consumer protection laws, contractual terms may be considered "unconscionable" if they are overly one-sided in favor of the lender and oppressive to the consumer. Factors that might be considered include the clarity and understandability of the terms, whether the consumer had a genuine choice in accepting the terms, and if the terms are hidden in fine print or were not disclosed. Specifically for auto loans and trade-ins, key areas to assess might include the fairness and transparency of the trade-in valuation, any hidden fees, and whether the loan terms, including interest rates and penalties, are reasonable and not predatory.

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