HB504: HB504 Commerce and trade; procedures, conditions, and limitations relative to vehicle value protection agreements; provide

Vehicle value protection agreements are add-on contracts, sometimes called trade-in or vehicle depreciation benefit agreements, sold alongside car purchases or loans. They promise the buyer money toward a replacement vehicle if something happens to the covered car. Georgia law does not currently set specific rules for these agreements. This bill would add a new article to the state's consumer protection code (O.C.G.A. Title 10, Chapter 1) covering how they must be sold, disclosed, backed financially, and canceled. Providers would have to disclose contact information, benefit terms, and cancellation rights, and could not require a customer to buy one of these agreements as a condition of financing or buying a car. Providers would need to carry insurance, a funded reserve, or a minimum net worth to guarantee they can pay claims. Consumers would get at least a 30 day 'free look' period to cancel for a refund, and the Attorney General could sue violators and seek civil penalties up to $2,500 per violation.

• Creates a new legal category, 'vehicle value protection agreements,' covering trade-in, diminished value, cash down payment, and depreciation benefit add-on contracts sold with vehicle purchases.
• Requires providers to disclose contact information, agreement terms, benefit eligibility rules, and cancellation rights conspicuously in the agreement.
• Bars lenders and dealers from conditioning a car loan or purchase agreement on the buyer accepting one of these add-on agreements.
• Requires providers to maintain one of three financial backing options: an insurance policy from a well capitalized insurer, a funded reserve account plus a security deposit with the Insurance Commissioner, or a net worth of at least $100 million.
• Guarantees consumers a free look period of at least 30 days to cancel for a full or partial refund, and sets rules for refunds when a provider cancels instead.
• Authorizes the Attorney General to sue providers or administrators that violate the law, seeking injunctions, restitution, and civil penalties up to $2,500 per violation.

Car buyers who purchase add-on vehicle value protection agreements, the companies (providers) and administrators that sell and manage these agreements, insurers that back them, auto dealers and lenders who offer financing, and the Georgia Attorney General's office, which would enforce the new rules.

Consumers who buy these add-on products would get clearer disclosures, a guaranteed 30-day window to cancel for a refund, and assurance that providers have money set aside or insurance to pay claims. Dealers and lenders could no longer require these agreements as a condition of a car loan or sale.

• Section 1 adds new Code Section 10-1-970 defining key terms, including 'vehicle value protection agreement,' 'provider,' 'administrator,' and 'free look period.'
• Code Section 10-1-971 sets disclosure requirements, including a required cancellation notice on the first page stating the consumer may cancel under O.C.G.A. § 10-1-973.
• Code Section 10-1-971(e) prohibits conditioning a finance agreement or vehicle purchase agreement on entering into one of these add-on agreements.
• Code Section 10-1-972 requires providers to maintain insurance from an insurer with at least $15 million in capital and surplus, or a funded reserve of 40 percent of net receipts plus a 5 percent trust deposit with the Insurance Commissioner, or a $100 million net worth.
• Code Section 10-1-973 guarantees a free look period of at least 30 days, sets refund rules for cancellations by consumers or providers, and caps an administrative fee at $75 when a provider cancels.
• Code Section 10-1-974 lets the Attorney General sue for injunctions, restitution, and civil penalties of up to $2,500 per violation, and treats violations as violations of the Fair Business Practices Act of 1975.
• Section 2 repeals any conflicting laws.

1. 2026-02-10House Committee Favorably Reported By Substitute (House)
2. 2025-04-04House Withdrawn, Recommitted (House)
3. 2025-03-04House Committee Favorably Reported (House)
4. 2025-02-20House Second Readers (House)
5. 2025-02-19House First Readers (House)
6. 2025-02-18House Hopper (House)

• Martin Momtahan (R, HD-017)Primary sponsor
• Matt Barton (R, HD-005)
• Derrick McCollum (R, HD-030)
• Noel Williams (R, HD-148)

• auto financing
• consumer protection
• vehicle add-on products
• insurance regulation
• Attorney General enforcement