(A) A GAP waiver must include the following terms in clear, easily understandable language:
(1) the name and address of the initial creditor and the borrower at the time of sale and the identity of any manager if different from the creditor;
(2) the purchase price and the terms of the GAP waiver including, without limitation, the requirements for protection, conditions, or exclusions associated with the GAP waiver;
(3) the length of the free-look period and the procedure by which a borrower may exercise the borrower's rights during that period;
(4) the terms required by Section 37-30-150;
(5) the procedure the borrower must follow, if any, to obtain GAP waiver benefits under the terms and conditions of the waiver, including a telephone number and address where the borrower may apply for waiver benefits;
(6) the methodology for calculating any refund of the unearned purchase price of the GAP waiver due in the event of cancellation of the GAP waiver or early termination of the finance agreement;
(7) a statement that the purchase of the GAP waiver is optional and the statement must be in all caps, underlined, or disclosed in another prominent manner and must be substantially similar to the following: "THIS GAP WAIVER IS NOT REQUIRED TO OBTAIN CREDIT, NOR TO OBTAIN CERTAIN TERMS OF CREDIT OR TO PURCHASE THE RELATED MOTOR VEHICLE. THIS GAP WAIVER WILL NOT BE PROVIDED UNLESS YOU SIGN AND AGREE TO PAY THE ADDITIONAL COST"; and
(8) a statement that the GAP waiver is not insurance and does not take the place of collision, comprehensive, or any other form of insurance on the motor vehicle.
(B) A GAP waiver that is included within the body of the finance agreement must provide the disclosures required by this section in a separate document that must be signed by the borrower before the purchase of a GAP waiver. A GAP waiver that is a separate addendum to the finance agreement may include these disclosures within the terms of the GAP waiver which also must be signed by the borrower.
HISTORY: 2015 Act No. 31 (S.441), Section 2, eff June 1, 2015.
Editor's Note
2015 Act No. 31, Section 3, provides as follows:
"SECTION 3. This act takes effect upon approval by the Governor and applies to all GAP waivers which become effective one hundred eighty days after the effective date."