Georgia CommonsHouse · Introduced · 2025-2026 Regular Session
HB 504: Commerce and trade; procedures, conditions, and limitations relative to vehicle value protection agreements; provide
Last action February 10, 2026 · House Committee Favorably Reported By Substitute
HB504 would create new state rules for vehicle value protection agreements, the add-on contracts sold with car purchases that promise a payout if the car is totaled or stolen, requiring insurance backing, disclosures, and cancellation rights.
The summaries below were written by an AI model (claude-sonnet-5) from the text of the bill and are not part of it. Quote the text, not the summary. The stored text is the Comm Sub version, the latest the General Assembly's website lists.
In plain language
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.
What the bill does
- 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.
Who it affects
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.
Why it matters
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.
Key provisions
- 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.
From the bill
“IN ACCORDANCE WITH GEORGIA CODE SECTION 10-1-973, YOU MAY CANCEL THIS AGREEMENT AT ANY TIME BEFORE THE END OF THE FREE LOOK PERIOD DESCRIBED IN THIS AGREEMENT.”
“A finance agreement or vehicle purchase agreement shall not be conditioned on a consumer entering into a vehicle value protection agreement.”
“A vehicle value protection agreement shall provide for a free look period of at least 30 days.”
Discussed in meetings (4)
The House and Senate meetings that took this bill up, from their machine transcripts. Each account was written by Georgia Commons with AI and is not part of the record; the video is what was said.
House Regulated Industries Committee, February 2, 2026
From 0:34:03 · Watch on the General Assembly's Vimeo channel
Summary by Georgia Commons: The sponsor presented a substitute for HB 504 to allow and regulate optional vehicle value protection agreements, citing consumer choice, disclosures, a 30-day cancellation window, financial backing and consumer-protection enforcement. A Guaranteed Asset Protection Alliance witness said these products protect vehicle equity after a total loss or unrecovered theft, unlike GAP waivers covering loan shortfalls. One member questioned overlap with replacement insurance; the witness said disclosures would warn against duplicate coverage. Answering other questions, the witness said products could cover new or used vehicles, costs could enter financing at the loan’s interest rate, and no deductible applied. The witness described backup-insurer claims access, typically after 60 days, and said products could potentially cover vehicle taxes. The witness said known providers honor agreements after interstate moves, but the bill did not require that. The substitute required disclosure of any condition tying benefits to the selling dealer. One member argued that this restriction weakened buyers’ bargaining power and wanted unrestricted options. Another sought separate signed acknowledgment. After a break, the committee approved an amendment making a dealer-return condition enforceable only through a separate signed form covering that condition. A member maintained opposition because dealer restrictions remained. The chair suspended action for further work on possible amendments, without a final passage vote.
House Regulated Industries Committee, February 9, 2026
From 0:10:46 · Watch on the General Assembly's Vimeo channel
Summary by Georgia Commons: The chair resumed consideration of the bill after action had been suspended at the previous meeting. The chair explained that the version before members already included language adopted at that meeting. Members received another proposed substitute from an absent committee member, but no member moved to offer it. After clarifying which version was before the committee, members approved the previously amended substitute, LC560567S, by voice vote. The chair declared that the ayes prevailed; no vote count was given.
House Rules Committee, February 17, 2026
From 0:46:57 · Watch on the General Assembly's Vimeo channel
Summary by Georgia Commons: The sponsor said the bill concerned vehicle value protection agreements designed to protect a buyer's equity, comparing that protection with gap coverage for lenders. The sponsor said benefits could be used at the selling dealership or another dealership, depending on the agreement. No questions or decision followed.
Status timeline
- House Committee Favorably Reported By Substitute (House)
- House Withdrawn, Recommitted (House)
- House Committee Favorably Reported (House)
- House Second Readers (House)
- House First Readers (House)
- House Hopper (House)
Sponsors
- Martin Momtahan (R, HD-17)
- Matt Barton (R, HD-5)
- Derrick McCollum (R, HD-30)
- Noel Williams, Jr. (R, HD-148)
Topics
- vehicle protection agreements
- consumer protection
- car dealership regulations
- insurance requirements
- Attorney General enforcement