41-3-401 - Disclosure of financing arrangements relating to the sale of motor vehicles.
41-3-401. Disclosure of financing arrangements relating to the sale of motorvehicles.
(1) (a) A dealer may not issue a temporary permit or release possession of a motorvehicle that the dealer has sold to someone other than another dealer unless the document of salecontains one of the disclosures listed in Subsection (2).
(b) The disclosures shall be set forth clearly and conspicuously on the first or front pageof the sale document at the time of sale, executed by the purchaser, and for Subsection (2)(b),executed by the seller also.
(2) (a) The form to be used when financing is the purchaser's responsibility shall read asfollows:
"THE PURCHASER OF THE MOTOR VEHICLE DESCRIBED IN THIS CONTRACTACKNOWLEDGES THAT THE SELLER OF THE MOTOR VEHICLE HAS MADE NOPROMISES, WARRANTIES, OR REPRESENTATIONS REGARDING SELLER'S ABILITYTO OBTAIN FINANCING FOR THE PURCHASE OF THE MOTOR VEHICLE.FURTHERMORE, PURCHASER UNDERSTANDS THAT IF FINANCING IS NECESSARYIN ORDER FOR THE PURCHASER TO COMPLETE THE PAYMENT TERMS OF THISCONTRACT ALL THE FINANCING ARRANGEMENTS ARE THE SOLERESPONSIBILITY OF THE PURCHASER.
(b) The form to be used when the seller agrees to seek arrangements for financing shallread as follows:
"(1) THE PURCHASER OF THE MOTOR VEHICLE DESCRIBED IN THISCONTRACT HAS EXECUTED THE CONTRACT IN RELIANCE UPON THE SELLER'SREPRESENTATION THAT THE SELLER CAN PROVIDE FINANCING ARRANGEMENTSFOR THE PURCHASE OF THE MOTOR VEHICLE. THE PRIMARY TERMS OF THEFINANCING ARE AS FOLLOWS:
INTEREST RATE BETWEEN ______ % AND ______ % PER ANNUM, TERMBETWEEN _____________ MONTHS AND _____________ MONTHS. MONTHLYPAYMENTS BETWEEN $ ____________ PER MONTH AND $ ____________ PER MONTHBASED ON A DOWN PAYMENT OF $ ______________.
(2) (a) IF SELLER IS NOT ABLE TO ARRANGE FINANCING WITHIN THE TERMSDISCLOSED, THEN SELLER MUST WITHIN SEVEN CALENDAR DAYS OF THE DATEOF SALE MAIL NOTICE TO THE PURCHASER THAT HE HAS NOT BEEN ABLE TOARRANGE FINANCING.
(b) PURCHASER THEN HAS 14 DAYS FROM THE DATE OF SALE TO ELECT, IFPURCHASER CHOOSES, TO RESCIND THE CONTRACT OF SALE PURSUANT TOSECTION 41-3-401.
(c) IN ORDER TO RESCIND THE CONTRACT OF SALE, THE PURCHASERSHALL:
(i) RETURN TO SELLER THE MOTOR VEHICLE HE PURCHASED;
(ii) PAY THE SELLER AN AMOUNT EQUAL TO THE CURRENT STANDARDMILEAGE RATE FOR THE COST OF OPERATING A MOTOR VEHICLE ESTABLISHEDBY THE FEDERAL INTERNAL REVENUE SERVICE FOR EACH MILE THE MOTORVEHICLE HAS BEEN DRIVEN; AND
(iii) COMPENSATE SELLER FOR ANY PHYSICAL DAMAGE TO THE MOTORVEHICLE.
(3) IN RETURN, SELLER SHALL GIVE BACK TO THE PURCHASER ALLPAYMENTS OR OTHER CONSIDERATION PAID BY THE PURCHASER, INCLUDINGANY DOWN PAYMENT AND ANY MOTOR VEHICLE TRADED IN.
(4) IF THE TRADE-IN HAS BEEN SOLD OR OTHERWISE DISPOSED OF BEFORETHE PURCHASER RESCINDS THE TRANSACTION, THEN THE SELLER SHALLRETURN TO THE PURCHASER A SUM EQUIVALENT TO THE ALLOWANCE TOWARDTHE PURCHASE PRICE GIVEN BY THE SELLER FOR THE TRADE-IN, AS NOTED INTHE DOCUMENT OF SALE.
(5) IF PURCHASER DOES NOT ELECT TO RESCIND THE CONTRACT OF SALEAS PROVIDED IN SUBSECTION (2)(b) OF THIS FORM:
(a) THE PURCHASER IS RESPONSIBLE FOR ADHERENCE TO THE TERMS ANDCONDITIONS OF THE CONTRACT OR RISKS BEING FOUND IN DEFAULT OF THETERMS AND CONDITIONS;
(b) THE TERMS AND CONDITIONS OF THE DISCLOSURES SET FORTH INSECTION (1) OF THIS FORM ARE NOT BINDING ON THE SELLER; AND
(c) IF FINANCING IS NECESSARY FOR THE PURCHASER TO COMPLETE THEPAYMENT TERMS OF THE CONTRACT OF SALE, THE PURCHASER IS SOLELYRESPONSIBLE FOR MAKING ALL THE FINANCING ARRANGEMENTS.
(6) SIGNING THIS DISCLOSURE DOES NOT PROHIBIT THE PURCHASER FROMSEEKING HIS OWN FINANCING.
(3) (a) (i) In addition to the penalties in this chapter, if the disclosures in Subsection (2)are not properly executed or if the seller is unable to provide the financing arrangements for thepurchaser as provided in Subsection (2)(b) within seven calendar days immediately following thesale date disclosed on the document of sale, then in either case the purchaser may return thepurchased motor vehicle to the dealer and receive a complete refund of all money and otherconsideration given to the dealer for the purchase, including any motor vehicle or property usedas a trade-in.
(ii) If the motor vehicle or property used as a trade-in has been sold or otherwisedisposed of, the seller shall return to the purchaser the amount of money equivalent to theallowance towards the purchase price given by the dealer for the motor vehicle or property tradedin, as noted in the document of sale.
(b) If the purchaser qualifies for the remedies set forth in Subsection (3)(a) and if thepurchaser elects to rescind by returning the purchased motor vehicle to the dealer within theprescribed time frame, then the purchaser is liable to the dealer:
(i) for all physical damage to the motor vehicle while in the possession of the purchaser;and
(ii) in an amount equal to the current standard mileage rate for the cost of operating amotor vehicle established by the federal Internal Revenue Service for each mile the motor vehiclewas driven between the date the purchaser first acquired possession and the date when the
purchaser returned the motor vehicle to the dealer.
(c) The purchaser is not entitled to the remedy set forth in Subsections (3)(a) and (b) ifthe purchaser materially misrepresents in writing any information requested by the dealer in anapplication for financing, financial statement, or similar document customarily used to elicitpersonal and financial data upon which a credit decision is normally predicated.
(4) (a) A dealer who has complied with Subsection (2)(b), but who has not been able tosecure financing as set forth in the disclosure, shall within seven days of the date of sale mailwritten notice to the purchaser:
(i) disclosing that the dealer has not been able to secure financing as set forth in thedisclosure; and
(ii) instructing the purchaser of his right to rescind the contract of sale within 14 calendardays of the date of sale, as provided for in Subsection (2).
(b) (i) The dealer shall mail notification to the purchaser within seven calendar daysfollowing the date of sale as set forth in the contract of sale.
(ii) This notice complies with Subsection (4)(b)(i) if it is postmarked before the end ofthe seventh day following the date of sale and addressed to the purchaser at the address containedin the document of sale.
(iii) If the purchaser's address is not contained on the document of sale, then proof ofcompliance with the notification provision of this Subsection (4)(b) shall be borne by the dealer.
(iv) If a dealer gives notice in the manner prescribed, the purchaser has 14 calendar daysfrom the date of sale to elect to rescind the contract of sale, in accordance with Subsection (2).
(c) (i) If a dealer executes the disclosure required by Subsection (2)(b), but is not able tosecure financing as set forth in the disclosure, and the dealer fails to give written notice to thepurchaser within seven days, as provided for in Subsections (4)(a) and (b), then the purchasermay rescind within seven days of the date he first learns that the dealer has not been able tosecure financing as set forth in the disclosure.
(ii) Except as provided in this Subsection (4)(c), the purchaser's option to rescind shall beexercised in the manner prescribed in Subsection (3).
(d) If the purchaser does not exercise the option to rescind within the specified timelimits in Subsections (3) and (4)(c):
(i) the purchaser is responsible for adherence to the terms and conditions of the contractof sale;
(ii) the dealer is not subject to the financing terms set forth in the disclosure; and
(iii) if financing is necessary for the purchaser to complete the payment terms of thecontract of sale, the purchaser is solely responsible for making all the financing arrangements.
(5) A dealer's failure to execute the disclosure required by Subsection (2), or its failure toprovide written notice to the purchaser within the time frame specified in this section, subject thedealer to the sanctions in Section 41-3-701.
(6) Either the purchaser or a dealer may bring an action to enforce his rights under thissection. The prevailing party in the action is entitled to reasonable attorneys' fees as part of thecosts of suit.
(7) A motor vehicle returned by the purchaser to the dealer in accordance with therescission provisions of this section is not considered sold for purposes of notice of sale underSection 41-3-301 and for purposes of sales tax under Title 59, Chapter 12, Sales and Use TaxAct.
Amended by Chapter 71, 2003 General Session