F&I and Showroom, January 2016

www fi magazine com 8 F I and Showroom January 2016 DEVELOPMENTS As of Dec 1 South Carolina has a new set of rules governing the sale of guaranteed asset protection While the new law containing the new requirements mostly clarifies what GAP is and does it also defines how and when it can be sold Th e states Guaranteed Asset Protection Act requires that GAP waivers sold in the state include a 30 day right to cancel It also prohibits dealers and other creditors from requiring that consumers purchase the protection to obtain credit or to secure better terms Consumers must also receive a written contract disclosing certain terms such as the price conditions and exclusions associated with the waiver in clear easily understandable language Matthew Nowels an attorney for Tallahassee Fla based law firm Meenan P A said the new law mirrors the model act developed by the Guaranteed Asset Protection Alliance GAPA which his firm manages He said the trade group which was formed in 2006 by providers of GAP waivers initiated discussions with the South Carolina Department of Consumer Affairs in December 2014 about amending state law to provide a framework under which GAP waivers may be offered in the state Not in the model act developed by GAPA were four restrictions on the sale of GAP the South Carolina Department of Consumer Affairs wanted included in the final version of Senate Bill 441 which was signed into law by Governor Nikki Haley on June 1 2015 One of those restrictions says dealers can only sell GAP in conjunction with a loan unrelated to the purchase of a motor vehicle if the loan has an origination repayment term of more than 12 months and a principal loan amount greater than four thousand dollars Also added was a prohibition on the sale of GAP unless the selling dealer believes the consumer will be eligible for a benefit under the product Dealers are also prohibited from selling GAP waivers unless the consumer credit terms and the vehicle qualify under the terms of the waiver and the amount financed minus the cost of the GAP waiver and other F I products is at least 80 of the manufacturer suggested retail price for a new vehicle or the National Automobile Dealers Associations average retail value for a used vehicle S C Gap Law Takes Effect TRANSPORTATION BILL OPENS DOOR TO DIGITAL TRANSACTIONS B illed as a down payment for building a 21st century transportation system the recently passed Fixing Americas Surface Transportation Act or Fast Act contains a provision that clears a key hurdle in the industrys drive toward a fully digital transaction Inside the 1300 page bill President Obama signed into law on Dec 4 is language that allows states to begin digitizing odometer disclosures notices and related materials This also means states will no longer have to apply to begin accepting electronic signatures on odometer disclosures The law which will also direct 305 billion in funding toward transportation projects over the next five years also requires states to implement appropriate data authentication and security measures John Brueggeman an executive with the Motor Vehicle Software Corp said the e odometer language in the Fast Act removes a key deterrent for states looking to go paperless F I managers should expect immediate benefits once states move to electronic signatures for odometer disclosures Brueggeman said They will no longer have to mail handwritten disclosures to the DMV nor wait for the DMV to receive and manually process the documents before mailing back verifications In states that move to electronic disclosures Brueggeman said dealers will receive immediate confirmation once they input a customers signature into their database and then electronically submit it to the DMV The time saved he added should allow F I managers to spend more time presenting and selling their products to more customers The e odometer provisions should also help reduce odometer fraud as the information dealerships enter into a state database will become permanent record This means any change to the database will also be permanently recorded offering a form of transparency paper cant match Brueggeman said ISTOCKPHOTO COM DENISTANGNEYJR