HB187: HB187 Professions and businesses; contractors; change certain provisions

Georgia law currently has no specific rules for vehicle value protection agreements, contracts sold alongside a car purchase that promise to pay toward a replacement vehicle if the covered car is totaled or stolen (sometimes called trade-in, diminished value, or depreciation benefit agreements). This bill adds a new article to Georgia's trade practices law (O.C.G.A. Title 10, Chapter 1) to regulate how these agreements are sold and enforced. Providers would have to clearly disclose contact information, benefit terms, and cancellation rights, and give consumers a 'free look period' of at least 30 days to cancel for a full refund. Providers must back their promises either through a licensed insurer, a funded reserve account plus a trust deposit with the Insurance Commissioner, or a parent company with at least $100 million in net worth. Car buyers cannot be required to buy one of these agreements to get financing. The Attorney General could sue violators, seek damages, and impose civil penalties of up to $2,500 per violation, and violations would also count as violations of Georgia's Fair Business Practices Act.

• Creates a new legal category, 'vehicle value protection agreements,' covering trade-in, diminished value, cash down payment, and depreciation benefit contracts sold with vehicles.
• Requires providers to disclose contact information, benefit terms, cancellation conditions, and refund methods clearly in the agreement itself.
• Guarantees consumers at least a 30-day 'free look period' to cancel for a full refund if no benefits have been used.
• Requires providers to maintain financial backing through an insurance policy, a funded reserve account plus a state trust deposit, or a parent company with at least $100 million net worth.
• Bars car dealers and lenders from requiring a buyer to purchase one of these agreements as a condition of financing.
• Gives the Attorney General power to sue violators, seek damages or restitution, and impose civil penalties of up to $2,500 per violation.

Companies and administrators that sell vehicle value protection or trade-in protection agreements, insurers backing those agreements, car dealers who offer them at the point of sale, consumers who buy vehicles and are offered these add-on contracts, and the Attorney General's office, which would enforce the new rules.

Georgians who buy add-on vehicle protection contracts would get guaranteed disclosure of terms, a 30-day window to cancel for a refund, and assurance that the seller has money or insurance set aside to pay claims. Dealers could no longer tie financing approval to buying one of these agreements.

• Section 1 adds Article 38 to Chapter 1 of Title 10, defining terms such as 'administrator,' 'provider,' 'covered vehicle,' and 'vehicle value protection agreement' (O.C.G.A. § 10-1-970).
• New Code Section 10-1-971 requires conspicuous disclosure of provider and administrator contact information, contract terms, cancellation rights, and a specific statutory notice on the agreement's first page.
• New Code Section 10-1-971(e) prohibits conditioning a vehicle finance or purchase agreement on the consumer buying a vehicle value protection agreement.
• New Code Section 10-1-972 requires providers to back agreements with a licensed insurer meeting minimum capital standards, a funded reserve account plus a trust deposit with the Commissioner of Insurance, or a parent company with at least $100 million net worth.
• New Code Section 10-1-973 sets a minimum 30-day free look period, refund rules on cancellation, and allows providers to charge up to a $75.00 administrative fee on provider-initiated cancellations.
• New Code Section 10-1-974 authorizes the Attorney General to sue for injunctions, damages, restitution, and civil penalties of up to $2,500 per violation, and ties violations to the Fair Business Practices Act of 1975.
• Section 2 repeals all conflicting laws.

1. 2026-03-25Senate Committee Favorably Reported By Substitute (Senate)
2. 2026-01-12Senate Recommitted (Senate)
3. 2025-03-25Senate Read Second Time (Senate)
4. 2025-03-21Senate Committee Favorably Reported (Senate)
5. 2025-02-28Senate Read and Referred (Senate)
6. 2025-02-27House Passed/Adopted By Substitute (House)
7. 2025-02-27House Third Readers (House)
8. 2025-02-11House Committee Favorably Reported By Substitute (House)

• Dale Washburn (R, HD-144)Primary sponsor
• Alan Powell (R, HD-033)
• Lauren McDonald (R, HD-026)
• Kasey Carpenter (R, HD-004)
• Derrick McCollum (R, HD-030)
• Steve Tarvin (R, HD-002)
• Ricky Williams (R, SD-025)

1. PassedHouse voteFebruary 27, 2025

   157 yea, 2 nay (7 not voting, 14 absent)

   Passage: House Vote #110

• vehicle protection contracts
• consumer protection
• auto dealers
• insurance regulation
• Attorney General enforcement