It is a misdemeanor, in connection with the sale of a motor vehicle by a person engaged in the business of selling motor vehicles at retail, for such person to accept assignment of an insurance policy, or rights thereunder, pertaining to any motor vehicle traded in by the purchaser, unless all amounts realized on such policy or rights by such person be credited by the dealer to the buyer on the next monthly payment due or same shall be refunded to the buyer.
Chapter 1aAutomobile Dealers
Section § 18450
This law makes it illegal for car dealers to keep any money from an insurance policy on a vehicle that a customer trades in unless the dealer either applies that money to the customer's next payment or gives it back to the customer as a refund.
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Section § 18451
If you buy a car and the seller illegally accepts an insurance policy assignment from you, you can sue them and potentially get back three times the insurance money involved.
The purchaser of a motor vehicle may recover from the seller in a civil action three times the amount realized on any insurance policy, or rights thereunder, assignment of which has been accepted in violation of Section 18450.
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