Dealers and finance companies are getting regulatory assistance in four more states in an effort to help buyers and contract holders protect their purchases via products available in F&I offices.
A trio of industry groups recently praised state legislatures across the nation for continued progress in passing new protections for consumers who purchase service contracts or GAP waivers for their vehicles. The Service Contract Industry Council (SCIC), Motor Vehicle Protection Products Association (MVPPA), and Guaranteed Asset Protection Alliance (GAPA) successfully promoted new regulations and guidelines to help owners protect their vehicles.
Among the new state consumer protection laws:
— Mississippi: HB 925, which took effect July 1, expands the definition of a service contract to include contracts to repair or replace tires, wheels and windshields for damage from road hazards, and covering contracts for paintless dent repair and contracts to replace lost or stolen key fobs.
— Arkansas established a free-look period requirement on GAP waivers, allowing purchasers ample time to understand the benefits of their GAP waivers before fully committing. Arkansas HB 1672, which took effect July 24, will allow anyone to cancel a GAP waiver without a penalty, fee or cost within 30 days of purchase.
— New Mexico: SB 350 requires that automatic renewal provisions be clearly and conspicuously disclosed within a service contract or a sales presentation if sold orally.
— Florida – HB 925 requires that home warranties that cover HVAC systems clearly indicate that consumers can also purchase coverage for certain system components.
“Service contracts and GAP waivers exist to help consumers,” SCIC executive director Tim Meenan said in a news release. “These industry groups are proud to have spurred important changes that better protect consumers.”
A GAP waiver is an agreement between a borrower and their creditors designed to cancel some or all of the remaining balance after a total loss. A GAP waiver is not insurance or a warranty but can provide certain financial security for the owner of a vehicle.
The industry groups pointed out this year’s legislation follows a half-dozen new laws passed last year around the nation, enhancing consumer protections in this area.
The organizations mentioned legislation enacted in Idaho, Minnesota, Utah, Mississippi, West Virginia and Wisconsin last year added protections to be covered by service contracts and ensuring that consumers are fully informed about their service contracts.