REPORT TITLE:
Motor Vehicle Contracts


DESCRIPTION:
Allows buyers of new or used motor vehicles to cancel their sales
contract at any time prior to midnight of the third business day
after the date on which the buyer signs the contract, provided
the buyer has not taken physical possession of the motor vehicle
or traded in a motor vehicle.  Includes a written statement in
the sales contract notifying buyers to their right of
cancellation.  Also includes other provisions relating to the
sales contracts of motor vehicles.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
HOUSE OF REPRESENTATIVES                H.B. NO.73         
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO MOTOR VEHICLES.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Chapter 437, Hawaii Revised Statutes, is amended
 
 2 by adding a new section to be appropriately designated and to
 
 3 read as follows:
 
 4      "§437-      New or used motor vehicle sales contracts.  (a)
 
 5 A consumer has an unqualified right to cancel a contract to
 
 6 purchase a new or used motor vehicle, without any penalty or
 
 7 obligation, at any time prior to midnight of the third business
 
 8 day after the date on which the consumer signed the contract;
 
 9 provided that the consumer has not:
 
10      (1)  Taken physical possession of the motor vehicle; or
 
11      (2)  Traded in a motor vehicle to purchase the new or used
 
12           motor vehicle.
 
13      (b)  Every contract shall contain a statement notifying the
 
14 consumer of the right of cancellation.  This statement shall be
 
15 in a bold face type of a minimum size of fourteen points and
 
16 shall be in substantially the following form:
 
17           "You, the consumer, shall have the right to cancel this
 
18      contract at any time prior to midnight of the third business
 
19      day after the date you sign this contract; provided that you
 
20      have not:
 

 
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                                     H.B. NO.           
                                                        
                                                        

 
 1           (1)  Taken physical possession of the new or used motor
 
 2                vehicle; or
 
 3           (2)  Traded in a motor vehicle to purchase the new or
 
 4                used motor vehicle.
 
 5      You may cancel this contract by delivering a written notice
 
 6      to this motor vehicle dealer.  The written notice shall
 
 7      state that you are canceling this contract.
 
 8           Upon cancellation of this contract, you, the consumer,
 
 9      may be held responsible for reasonable costs attributed to
 
10      motor vehicle transaction fees and new motor vehicle
 
11      preparation fees.
 
12           The written notice must be delivered to:
 
13           ___________________________________________________."
 
14           (Name and address of motor vehicle dealer) 
15 
16      The buyer and seller shall sign their respective initials
 
17 immediately following the statement to indicate their consent and
 
18 understanding of the statement.
 
19      (c)  Within ten business days of receipt of the notice of
 
20 cancellation, the motor vehicle dealer shall:
 
21      (1)  Refund the entire consideration, including any general
 
22           excise tax, paid by the consumer; and
 
23      (2)  Return all negotiable executed instruments.
 

 
 
 
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                                     H.B. NO.           
                                                        
                                                        

 
 1      (d)  The contract for the sale of a new or used motor
 
 2 vehicle shall be void if the sale is made before financing for
 
 3 the motor vehicle has been finalized and approved by the
 
 4 appropriate lender.
 
 5      (e)  The date of sale for new or used motor vehicles that
 
 6 are subject to the three-day cancellation provision under this
 
 7 section shall be on the fourth business day after the signing of
 
 8 the contract, excluding Saturdays, Sundays, and state or federal
 
 9 holidays."
 
10      SECTION 2.  New statutory material is underscored.
 
11      SECTION 3.  This Act shall take effect on January 1, 2000.
 
12 
 
13                         INTRODUCED BY:___________________________