HB 504: Commerce and trade; procedures, conditions, and limitations relative to vehicle value protection agreements; provide

Georgia currently has no specific law governing vehicle value protection agreements, add-on products sold alongside car purchases or loans that promise to cover a shortfall (like negative equity or diminished value) if something happens to the vehicle. This bill adds a new article to Georgia's trade practices law setting rules for these agreements. Providers would have to disclose contact information, benefit terms, and cancellation rights clearly in the agreement, and back their promises with insurance, a funded reserve account plus a trust deposit, or a minimum net worth requirement. Consumers get at least a 30 day free look period to cancel for a full refund, and rules govern refunds when either side cancels later. The Attorney General could sue violators for injunctions, damages, and civil penalties up to $2,500 per violation, and violations also count as violations of Georgia's Fair Business Practices Act of 1975.

• Creates a new legal category, 'vehicle value protection agreements,' covering products like vehicle trade-in, diminished value, cash down payment protection, and depreciation benefit agreements.
• Requires providers to maintain insurance backing, a funded reserve account with a trust deposit, or a minimum net worth of $100 million to guarantee they can pay claims.
• Requires agreements to clearly disclose provider and administrator contact information, benefit terms, conditions, and cancellation rights, including a mandatory cancellation notice on the first page.
• Guarantees consumers a free look period of at least 30 days to cancel for a full refund, with specific refund rules if benefits were already used.
• Bars dealers from conditioning a vehicle finance agreement or purchase on the consumer also buying a vehicle value protection agreement.
• Lets the Attorney General sue violators for injunctions, restitution, and civil penalties of up to $2,500 per violation, and treats violations as Fair Business Practices Act violations.

Car dealers and third-party companies that sell vehicle value protection add-ons, the insurers and administrators that back or manage those agreements, consumers who buy vehicles and finance them, and the Georgia Attorney General's office, which would enforce the new rules.

Buyers who purchase these add-on protection products would get guaranteed disclosure of terms, a 30-day window to cancel for a refund, and assurance that providers have financial backing to pay claims. Dealers and providers would face new compliance costs and potential state enforcement action for violations.

• Section 1, new Code Section 10-1-970, defines key terms including 'provider,' 'administrator,' 'consumer,' 'finance agreement,' 'free look period,' and 'vehicle value protection agreement.'
• Code Section 10-1-971 requires conspicuous disclosure of contact information, agreement terms, benefit procedures, and cancellation rights, plus a required statement on the agreement's first page about the right to cancel.
• Code Section 10-1-971 also bars conditioning a finance or purchase agreement on buying a vehicle value protection agreement.
• Code Section 10-1-972 requires providers to be backed by a licensed insurer meeting capital thresholds, a funded reserve account plus a trust deposit with the Commissioner of Insurance, or a $100 million net worth requirement.
• Code Section 10-1-973 sets a minimum 30-day free look period, refund rules for consumer and provider cancellations, and allows providers to charge up to a $75 administrative fee for certain cancellations.
• Code Section 10-1-974 authorizes the Attorney General to sue providers or administrators for injunctions, damages, restitution, and civil penalties up to $2,500 per violation, and ties violations to 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)

• vehicle protection agreements
• consumer protection
• car dealership regulations
• insurance requirements
• Attorney General enforcement