S.B. 143 Enrolled

MOTOR VEHICLE DISCLOSURE
REQUIREMENTS - PURCHASER'S RIGHTS
2003 GENERAL SESSION
STATE OF UTAH
Sponsor: Dan R. Eastman
This act modifies the Motor Vehicles Code by amending dealer financial arrangements
and disclosure provisions for dealer financed motor vehicle purchases. This act provides
that if a dealer was unable to arrange the financing terms made in the disclosure for the
purchase of a motor vehicle and has notified the purchaser, the purchaser has 14 days
from the date of sale to rescind the sale. If the purchaser fails to rescind the sale, the
dealer is not subject to financing the vehicle purchase pursuant to the terms made in the
disclosure and the purchaser is solely responsible for all financing arrangements. This
act requires the dealer to notify purchasers of these requirements in the disclosures. This
act changes the mileage rate a purchaser must pay for use of the vehicle if the contract is
rescinded. This act makes technical changes.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
41-3-401, as last amended by Chapter 30 and renumbered and amended by Chapter
234, Laws of Utah 1992
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 41-3-401 is amended to read:
41-3-401. Disclosure of financing arrangements relating to the sale of motor
vehicles.
(1) (a) A dealer may not issue a temporary permit or release possession of a motor
vehicle that [he] the dealer has sold to someone other than another dealer unless the document
of sale contains one of the disclosures listed in Subsection (2).
(b) The disclosures shall be set forth clearly and conspicuously on the first or front
page of 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 as
follows:
"THE PURCHASER OF THE MOTOR VEHICLE DESCRIBED IN THIS CONTRACT
ACKNOWLEDGES THAT THE SELLER OF THE MOTOR VEHICLE HAS MADE NO
PROMISES, WARRANTIES, OR REPRESENTATIONS REGARDING SELLER'S ABILITY
TO OBTAIN FINANCING FOR THE PURCHASE OF THE MOTOR VEHICLE.
FURTHERMORE, PURCHASER UNDERSTANDS THAT IF FINANCING IS NECESSARY
IN ORDER FOR THE PURCHASER TO COMPLETE THE PAYMENT TERMS OF THIS
CONTRACT ALL THE FINANCING ARRANGEMENTS ARE THE SOLE
RESPONSIBILITY OF THE PURCHASER.

____________________________________________

(Signature of the purchaser)"

(b) The form to be used when the seller agrees to [provide] seek arrangements for
financing shall read as follows:
"(1) THE PURCHASER OF THE MOTOR VEHICLE DESCRIBED IN THIS
CONTRACT HAS EXECUTED THE CONTRACT IN RELIANCE UPON THE SELLER'S
REPRESENTATION THAT THE SELLER CAN PROVIDE FINANCING ARRANGEMENTS
FOR THE PURCHASE OF THE MOTOR VEHICLE[,]. THE PRIMARY TERMS OF THE
FINANCING ARE AS FOLLOWS:
INTEREST RATE BETWEEN ______ % AND ______ % PER ANNUM, TERM
BETWEEN _____________ MONTHS AND _____________ MONTHS. MONTHLY
PAYMENTS BETWEEN $ ____________ PER MONTH AND $ ____________ PER MONTH
BASED ON A DOWN PAYMENT OF $ ______________.
(2) (a) IF SELLER IS NOT ABLE TO ARRANGE FINANCING WITHIN THE TERMS
DISCLOSED, THEN SELLER MUST WITHIN SEVEN CALENDAR DAYS OF THE DATE
OF SALE MAIL NOTICE TO THE PURCHASER THAT HE HAS NOT BEEN ABLE TO
ARRANGE FINANCING.
(b) PURCHASER THEN HAS 14 DAYS FROM THE DATE OF SALE TO ELECT, IF

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PURCHASER CHOOSES, TO RESCIND THE CONTRACT OF SALE PURSUANT TO
SECTION 41-3-401 .
(c) IN ORDER TO RESCIND THE CONTRACT OF SALE, THE PURCHASER
SHALL:
(i) RETURN TO SELLER THE MOTOR VEHICLE HE PURCHASED;
(ii) PAY THE SELLER [30 CENTS FOR] AN AMOUNT EQUAL TO THE CURRENT
STANDARD MILEAGE RATE FOR THE COST OF OPERATING A MOTOR VEHICLE
ESTABLISHED BY THE FEDERAL INTERNAL REVENUE SERVICE FOR EACH MILE
THE MOTOR VEHICLE HAS BEEN DRIVEN; AND
(iii) COMPENSATE SELLER FOR ANY PHYSICAL DAMAGE TO THE MOTOR
VEHICLE.
(3) IN RETURN, SELLER SHALL GIVE BACK TO THE PURCHASER ALL
PAYMENTS OR OTHER CONSIDERATION PAID BY THE PURCHASER, INCLUDING
ANY DOWN PAYMENT AND ANY MOTOR VEHICLE TRADED IN.
(4) IF THE TRADE-IN HAS BEEN SOLD OR OTHERWISE DISPOSED OF BEFORE
THE PURCHASER RESCINDS THE TRANSACTION, THEN THE SELLER SHALL
RETURN TO THE PURCHASER A SUM EQUIVALENT TO THE ALLOWANCE TOWARD
THE PURCHASE PRICE GIVEN BY THE SELLER FOR THE TRADE-IN, AS NOTED IN
THE DOCUMENT OF SALE.
(5) IF PURCHASER DOES NOT ELECT TO RESCIND THE CONTRACT OF SALE
AS PROVIDED IN SUBSECTION (2)(b) OF THIS FORM:
(a) THE PURCHASER IS RESPONSIBLE FOR ADHERENCE TO THE TERMS AND
CONDITIONS OF THE CONTRACT OR RISKS BEING FOUND IN DEFAULT OF THE
TERMS AND CONDITIONS;
(b) THE TERMS AND CONDITIONS OF THE DISCLOSURES SET FORTH IN
SECTION (1) OF THIS FORM ARE NOT BINDING ON THE SELLER; AND
(c) IF FINANCING IS NECESSARY FOR THE PURCHASER TO COMPLETE THE
PAYMENT TERMS OF THE CONTRACT OF SALE, THE PURCHASER IS SOLELY

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RESPONSIBLE FOR MAKING ALL THE FINANCING ARRANGEMENTS.
[(5)] (6) SIGNING THIS DISCLOSURE DOES NOT PROHIBIT THE PURCHASER
FROM SEEKING HIS OWN FINANCING.

_______________________________________

(Signature of the purchaser)

_______________________________________

(Signature of the seller)"

(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 the
purchaser as provided in Subsection (2)(b) within seven calendar days immediately following the
sale[, the] date [to be] disclosed on the document of sale, then in either case the purchaser may
return the purchased motor vehicle to the dealer and receive a complete refund of all money and
other consideration given to the dealer for the purchase, including any motor vehicle or property
used as a trade-in.
(ii) If the motor vehicle or property used as a trade-in has been sold or otherwise
disposed of, the seller shall return to the purchaser the amount of money equivalent to the
allowance towards the purchase price given by the dealer for the motor vehicle or property traded
in, as noted in the document of sale.
(b) If the purchaser qualifies for the remedies set forth in Subsection (3)(a) and if the
purchaser elects to rescind by returning the purchased motor vehicle to the dealer within the
prescribed 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 [30 cents per mile] the current standard mileage rate for the
cost of operating a motor vehicle established by the federal Internal Revenue Service for each
mile the motor vehicle was 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) if

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the purchaser materially misrepresents in writing any information requested by the dealer in an
application for financing, financial statement, or similar document customarily used to elicit
personal 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 to
secure financing as set forth in the disclosure, shall within seven days of the date of sale mail
written notice to the purchaser:
(i) disclosing that the dealer has not been able to secure financing as set forth in the
disclosure; and
(ii) instructing the purchaser of his right to rescind the contract of sale within 14 calendar
days of the date of sale, as provided for in Subsection [(3)] (2).
(b) (i) The dealer shall mail notification to the purchaser within seven calendar days
following 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 of
the seventh day following the date of sale and addressed to the purchaser at the address [set forth]
contained in the document of sale.
(iii) If the purchaser's address is not contained on the document of sale, then proof of
compliance with the notification provision of this Subsection (4)(b) shall be borne by the dealer.
(iv) [Provided that] If a dealer gives notice in the manner prescribed, the purchaser has
14 calendar days from the date of sale to elect to rescind the contract of sale, in accordance with
Subsection [(3)] (2).
(c) (i) If a dealer executes the disclosure required by Subsection (2)(b), but is not able to
secure financing as set forth in the disclosure, and the dealer fails to give written notice to the
purchaser within seven days, as provided for in Subsections (4)(a) and (b), then the purchaser
may rescind within seven days of the date he first learns that the dealer has not been able to
secure financing as set forth in the disclosure.
(ii) [The] Except as provided in this Subsection (4)(c), the purchaser's option to rescind
[under this subsection] shall be exercised in the manner prescribed in [Subsections (3)(a) and (b),
except that the 14 day time limit is waived, and remains subject to] Subsection (3)[(c)].

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(d) If the purchaser does not exercise the option to rescind within the specified time
limits in Subsections (3) and (4)(c):
(i) the purchaser is responsible for adherence to the terms and conditions of the contract
of 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 the
contract 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 to
provide written notice to the purchaser within the time frame specified in this section, subject the
dealer to the sanctions in Section 41-3-701 .
(6) Either the purchaser or a dealer may bring an action to enforce his rights under this
section. The prevailing party in the action is entitled to reasonable attorneys' fees as part of the
costs of suit.
(7) [Motor vehicles] A motor vehicle returned by the purchaser to the dealer in
accordance with the rescission provisions of this section [are] is not considered sold for purposes
of notice of sale under Section 41-3-301 and for purposes of sales tax under Title 59, Chapter 12,
Sales and Use Tax Act.

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