Florida Senate Bill 902 – This legislation revises the definition of “Guaranteed Asset Protection Product” in the state’s Motor Vehicle Sales Finance law. As amended, the law will allow benefits under a GAP waiver to include waiver a portion of the cost of a replacement vehicle. It also will allow a credit, in lieu of waiver, which can be applied toward the purchase of a replacement vehicle. The new law also provides that a GAP waiver may be cancellable or non-cancellable and establishes a new required “free-look” period. Any cancellation fee imposed by the waiver after the “free-look” period may not exceed $75.
The legislation also creates the “Florida Vehicle Value Protection Agreements Act” and defines such agreements as “a contractual agreement that provides a benefit toward either the reduction of some or all of the contract holder’s current finance agreement deficiency balance or the purchase or lease of a replacement motor vehicle or motor vehicle services upon the occurrence of an adverse event to the motor vehicle, including, but not limited to, loss, theft, damage, obsolescence, diminished value, or depreciation.” While a GAP waiver benefit is limited to the total loss of a vehicle due to theft, a VVPA’s benefits can be more board. Both types of agreements are deemed to not be insurance.
The new law establishes financial responsibility requirements for providers of VVPAs as well as sets forth penalties for both providers and administrators of such programs. The new law is effective October 1, 2024.
