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Second Regular Session
Seventy-fifth General Assembly
STATE OF COLORADO
INTRODUCED
LLS NO. 26-0460.02 Jery Payne x2157 HOUSE BILL 26-1261
House Committees Senate Committees
Business Affairs & Labor
A BILL FOR AN ACT
CONCERNING RIGHTS RELATED TO THE TRANSFER OF A MOTOR101
VEHICLE.102
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov.)
Under the "Uniform Consumer Credit Code", a creditor must give
certain notices at least 20 days before repossessing collateral. For a
vehicle that is required to be registered and that is a debtor's only vehicle
(qualified motor vehicle), the bill extends this notice period to 60 days.
A covered person with a qualified motor vehicle subject to a lien may
cure the default during the 60 days by making the back payments plus
HOUSE SPONSORSHIP
Mabrey and Ricks,
SENATE SPONSORSHIP
Weissman and Wallace,
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law.
delinquency or deferral charges.
The bill prohibits disabling a qualified motor vehicle for the
purpose of repossessing it.
The bill creates a 48-day right to cure a default that led to a
qualified motor vehicle being repossessed. The creditor must notify the
covered person that owns the vehicle of the repossession within 48 hours
and that the qualified motor vehicle is subject to disposition unless the
debt is cured. Standards are set for the notice.
If the covered person fails to cure the default within 48 days after
the repossession, the secured party with the repossessed qualified motor
vehicle may dispose of the qualified motor vehicle. If the covered person
cures the default within 48 days after the repossession, the secured party
shall return the qualified motor vehicle and restore the covered person's
rights under the security agreement and the associated obligations under
the consumer transaction or promissory note as though the default did not
occur.
The bill creates a right to return a qualified motor vehicle
purchased from a dealer within 3 business days. For cases in which a
consumer returns a motor vehicle, the bill creates certain requirements for
the consumer and the dealer. Procedures are set for unwinding the
financing agreement and any security agreement.
A dealer must not charge or attempt to charge a consumer for
unreasonable excess mileage or unreasonable cost of repairs or use a
claim of excess mileage or repairs to delay compliance with the bill.
A waiver of the right to return a motor vehicle is void as against
public policy. In addition to any other remedies, a consumer harmed by
a dealer's violation of the bill may recover actual damages, reasonable
attorney fees and costs, and, for willful or knowing violations, treble
damages.
A violation of the bill is an unfair or deceptive trade practice under
the "Colorado Consumer Protection Act".
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, add article 9.4 to title2
5 as follows:3
ARTICLE 9.44
Consumer Protections for Motor Vehicle Liens5
5-9.4-101. Definitions.6
AS USED IN THIS ARTICLE 9.4, UNLESS THE CONTEXT OTHERWISE7
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REQUIRES:1
(1) "COVERED PERSON" MEANS A NATURAL PERSON THAT ENTERS2
INTO A RETAIL INSTALLMENT CONTRACT OR LEASE FOR A QUALIFIED3
MOTOR VEHICLE.4
(2) "DISABLE A MOTOR VEHICLE" MEANS ACTIVATING, INCLUDING5
BY REMOTE OR ELECTRONIC ACTIVATION , A DEVICE THAT PREVENTS6
NORMAL OPERATION OF A MOTOR VEHICLE.7
(3) (a) "QUALIFIED MOTOR VEHICLE" MEANS A SELF -PROPELLED8
VEHICLE THAT IS:9
(I) REQUIRED TO BE REGISTERED UNDER ARTICLE 3 OF TITLE 42,10
REGARDLESS OF WHETHER THE VEHICLE IS USED FOR PERSONAL ,11
HOUSEHOLD, OR BUSINESS PURPOSES; AND12
(II) THE ONLY MOTOR VEHICLE OWNED BY A DEBTOR.13
(b) "Q UALIFIED MOTOR VEHICLE " DOES NOT INCLUDE A FLEET14
VEHICLE AS DEFINED IN SECTION 42-1-102 (36).15
(4) "S ECURED PARTY " MEANS A PERSON WITH A SECURITY16
INTEREST IN A MOTOR VEHICLE.17
(5) "S ECURITY INTEREST " HAS THE MEANING SET FORTH IN18
SECTION 4-1-201 (35).19
5-9.4-102. Applicability - conflict of laws.20
(1) N OTWITHSTANDING COMMON LAW OR A PROVISION OF A21
CONTRACT, THIS ARTICLE 9.4 APPLIES TO THE ENFORCEMENT OF RIGHTS22
UNDER A SECURITY INTEREST IN A QUALIFIED MOTOR VEHICLE . A23
PROVISION OF A CONTRACT THAT WAIVES A RIGHT GRANTED UNDER THIS24
ARTICLE 9.4 IS VOID TO THE EXTENT NECESSARY FOR A COVERED PERSON25
TO RETAIN THE RIGHT.26
(2) I F A PROVISION IN THIS ARTICLE 9.4 CONFLICTS WITH A27
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PROVISION IN SECTION 4-9-609 OR ARTICLE 5 OF THIS TITLE 5, THE1
PROVISION IN THIS ARTICLE 9.4 GOVERNS TO THE EXTENT THAT THE2
CONFLICT APPLIES TO A SECURITY INTEREST IN A QUALIFIED MOTOR3
VEHICLE PURCHASED BY A COVERED PERSON.4
5-9.4-103. Cure of default.5
(1) AFTER A COVERED PERSON 'S DEFAULT CONSISTING ONLY OF6
THE COVERED PERSON 'S FAILURE TO MAKE A REQUIRED PAYMENT , A7
CREDITOR SHALL NOT, BECAUSE OF THE DEFAULT, ACCELERATE MATURITY8
OF THE UNPAID BALANCE OF THE OBLIGATION NOR TAKE POSSESSION OF OR9
OTHERWISE ENFORCE A SECURITY INTEREST IN A QUALIFIED MOTOR10
VEHICLE UNTIL SIXTY DAYS AFTER GIVING THE CONSUMER THE NOTICE OF11
RIGHT TO CURE DESCRIBED IN SECTION 5-5-110.12
(2) U NTIL THE EXPIRATION OF THE TIME PERIOD DESCRIBED IN13
SUBSECTION (1) OF THIS SECTION, A DEFAULT CONSISTING OF A FAILURE TO14
MAKE A REQUIRED PAYMENT MAY BE CURED BY TENDERING TO THE15
CREDITOR THE AMOUNT OF ALL UNPAID SUMS DUE AT THE TIME OF THE16
TENDER, WITHOUT ACCELERATION, PLUS ANY UNPAID DELINQUENCY OR17
DEFERRAL CHARGES . CURING THE DEFAULT RESTORES THE COVERED18
PERSON'S RIGHTS UNDER THE AGREEMENT AS THOUGH THE DEFAULT DID19
NOT OCCUR.20
(3) THIS SECTION DOES NOT APPLY:21
(a) IF THE DEFAULT CONTINUES FOR ONE HUNDRED TWENTY DAYS22
OR MORE; OR23
(b) TO A SECOND OR SUBSEQUENT DEFAULT.24
(4) A SECURED PARTY MUST COMPLY WITH THIS SECTION IN ORDER25
TO TAKE POSSESSION OF A QUALIFIED MOTOR VEHICLE.26
5-9.4-104. Disabling motor vehicle prohibited.27
HB26-1261-4-
A SECURED PARTY SHALL NOT DISABLE A MOTOR VEHICLE FOR THE1
COVERED PERSON'S FAILURE TO MEET PAYMENT OBLIGATIONS UNDER THE2
PURCHASE TRANSACTION ASSOCIATED WITH THE SECURITY INTEREST OR3
PROMISSORY NOTE WHEN EXERCISING THE SECURED PARTY'S RIGHTS WITH4
RESPECT TO COLLATERAL.5
5-9.4-105. Qualified motor vehicle - right to cure after6
repossession.7
(1) A SECURED PARTY THAT HAS REPOSSESSED A QUALIFIED8
MOTOR VEHICLE SHALL NOT DISPOSE OF THE MOTOR VEHICLE UNTIL9
FORTY-EIGHT DAYS AFTER THE MOTOR VEHICLE IS REPOSSESSED.10
(2) W ITHIN FORTY -EIGHT HOURS AFTER REPOSSESSING A11
QUALIFIED MOTOR VEHICLE , A SECURED PARTY SHALL NOTIFY THE12
COVERED PERSON THAT THE MOTOR VEHICLE HAS BEEN REPOSSESSED AND13
THAT THE MOTOR VEHICLE IS SUBJECT TO DISPOSITION FORTY-EIGHT DAYS14
AFTER THE DATE OF REPOSSESSION UNLESS THE COVERED PERSON CURES15
THE DEFAULT IN ACCORDANCE WITH SUBSECTION (3) OF THIS SECTION. THE16
NOTICE MUST INCLUDE:17
(a) THE ACTUAL DATE THE QUALIFIED MOTOR VEHICLE IS SUBJECT18
TO DISPOSITION IF THE DEBTOR DOES NOT CURE THE DEFAULT;19
(b) T HE AMOUNT NECESSARY TO CURE THE DEFAULT UNDER20
SUBSECTION (3) OF THIS SECTION;21
(c) THE ACCEPTABLE FORMS OF PAYMENT TO CURE THE DEFAULT;22
AND23
(d) THE NAME OF, ADDRESS OF, AND TELEPHONE NUMBER OF THE24
SECURED PARTY.25
(3) TO CURE A DEFAULT THAT CAUSED THE REPOSSESSION OF A26
QUALIFIED MOTOR VEHICLE , THE COVERED PERSON MUST PAY THE27
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OVERDUE AMOUNT PLUS THE REASONABLE COST OF REPOSSESSING THE1
MOTOR VEHICLE.2
(4) (a) IF A COVERED PERSON FAILS TO CURE A DEFAULT WITHIN3
FORTY-EIGHT DAYS AFTER THE REPOSSESSION OF A QUALIFIED MOTOR4
VEHICLE, THE SECURED PARTY MAY DISPOSE OF THE MOTOR VEHICLE IN5
ACCORDANCE WITH PART 6 OF ARTICLE 9 OF TITLE 4 AND ARTICLE 5 OF6
THIS TITLE 5.7
(b) IF A COVERED PERSON CURES A DEFAULT WITHIN FORTY-EIGHT8
DAYS AFTER THE REPOSSESSION OF A QUALIFIED MOTOR VEHICLE , THE9
SECURED PARTY SHALL RETURN THE MOTOR VEHICLE AND RESTORE THE10
COVERED PERSON'S RIGHTS UNDER THE SECURITY AGREEMENT AND THE11
ASSOCIATED OBLIGATIONS UNDER THE PURCHASE TRANSACTION OR12
PROMISSORY NOTE AS THOUGH THE DEFAULT DID NOT OCCUR . THE13
COVERED PERSON'S OBLIGATIONS UNDER THE SECURITY AGREEMENT AND14
THE ASSOCIATED OBLIGATIONS UNDER THE PURCHASE TRANSACTION OR15
PROMISSORY NOTE RESUME AS THOUGH THE DEFAULT DID NOT OCCUR.16
5-9.4-106. Enforcement - unfair or deceptive trade practice.17
A VIOLATION OF THIS ARTICLE 9.4 IS AN UNFAIR OR DECEPTIVE18
TRADE PRACTICE UNDER THE "COLORADO CONSUMER PROTECTION ACT",19
AS DESCRIBED IN SECTION 6-1-105 (1)(rrrr).20
SECTION 2. In Colorado Revised Statutes, add 44-20-130.5 as21
follows:22
44-20-130.5. Right to return - enforcement - unfair or23
deceptive trade practice - definitions - rules.24
(1) AS USED IN THIS SECTION, UNLESS THE CONTEXT OTHERWISE25
REQUIRES:26
(a) "DEALER" MEANS A MOTOR VEHICLE DEALER OR A USED MOTOR27
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VEHICLE DEALER.1
(b) "QUALIFIED MOTOR VEHICLE" HAS THE MEANING SET FORTH IN2
SECTION 5-9.4-101 (3).3
(2) (a) SUBJECT TO SUBSECTION (3) OF THIS SECTION, A CONSUMER4
WHO PURCHASES A QUALIFIED MOTOR VEHICLE FROM A DEALER HAS A5
RIGHT TO RETURN THE MOTOR VEHICLE TO THE DEALER WITHIN THREE6
BUSINESS DAYS AFTER THE LATER OF THE CONSUMER RECEIVING DELIVERY7
OF THE MOTOR VEHICLE OR THE CONSUMER PURCHASING THE MOTOR8
VEHICLE.9
(b) IF A CONSUMER RETURNS A QUALIFIED MOTOR VEHICLE UNDER10
THIS SECTION, THE DEALER, WITHIN THREE BUSINESS DAYS, SHALL:11
(I) REFUND THE AMOUNTS ACTUALLY PAID BY THE CONSUMER FOR12
THE RETURNED VEHICLE MINUS THE FEES DESCRIBED IN SUBSECTION (3)(c)13
OF THIS SECTION AND ANY COST OF REPAIRING THE RETURNED VEHICLE AS14
DESCRIBED IN SUBSECTION (3)(e)(II) OF THIS SECTION;15
(II) T AKE ALL NECESSARY STEPS TO UNWIND OR CANCEL ANY16
FINANCING OR LEASING ARRANGEMENTS RELATED TO THE RETURNED17
VEHICLE; AND18
(III) I F THE CONSUMER TRADED IN A VEHICLE AS PART OF THE19
TRANSACTION:20
(A) R ETURN THE TRADE -IN VEHICLE TO THE CONSUMER IN21
SUBSTANTIALLY THE SAME CONDITION IF THE DEALER STILL OWNS THE22
VEHICLE; OR23
(B) PAY THE CONSUMER THE AGREED TRADE-IN VALUE STATED IN24
THE PURCHASE CONTRACT IF THE DEALER NO LONGER OWNS THE VEHICLE.25
(3) T O EXERCISE THE RIGHT TO RETURN A QUALIFIED MOTOR26
VEHICLE, A CONSUMER MUST:27
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(a) R ETURN THE QUALIFIED MOTOR VEHICLE TO THE DEALER 'S1
PLACE OF BUSINESS DURING NORMAL BUSINESS HOURS WITHIN THE2
THREE-BUSINESS-DAY RETURN PERIOD;3
(b) S IGN THE CERTIFICATE OF TITLE OF THE QUALIFIED MOTOR4
VEHICLE AND TRANSFER THE CERTIFICATE OF TITLE TO THE DEALER;5
(c) PAY A REASONABLE RESTOCKING FEE AND ANY REASONABLE6
EXCESS MILEAGE FEE, AS EACH IS DETERMINED PURSUANT TO SUBSECTION7
(4) OF THIS SECTION;8
(d) RETURN ALL ITEMS RECEIVED AS PART OF THE TRANSACTION;9
AND10
(e) (I) RETURN THE QUALIFIED MOTOR VEHICLE IN SUBSTANTIALLY11
THE DELIVERED CONDITION, NOT INCLUDING ORDINARY WEAR AND TEAR12
AND REASONABLE MILEAGE; OR13
(II) P AY THE REASONABLE COST , NOT TO EXCEED ONE -HALF OF14
ONE PERCENT OF THE VALUE OF THE QUALIFIED MOTOR VEHICLE AT THE15
POINT OF SALE , OF REPAIRING THE MOTOR VEHICLE TO SUBSTANTIALLY16
THE DELIVERED CONDITION.17
(4) IF A QUALIFIED MOTOR VEHICLE IS RETURNED PURSUANT TO18
THIS SECTION, A DEALER MAY CHARGE A REASONABLE RESTOCKING FEE OF19
TWO HUNDRED DOLLARS OR MORE BUT NOT TO EXCEED THE LOWER OF SIX20
HUNDRED DOLLARS OR ONE AND ONE-HALF PERCENT OF THE TOTAL SALE21
PRICE OF THE RETURNED MOTOR VEHICLE . IN ADDITION TO THE22
RESTOCKING FEE, THE DEALER MAY CHARGE AN EXCESS MILEAGE FEE TO23
COMPENSATE THE DEALER FOR EXCESS MILEAGE BEYOND REASONABLE24
MILEAGE. BOTH THE RESTOCKING FEE AND THE EXCESS MILEAGE FEE ARE25
DEDUCTED FROM THE CONSUMER 'S REFUND . THE DEALER SHALL NOT26
REQUIRE THE CONSUMER TO PAY THE RESTOCKING FEE OR THE EXCESS27
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MILEAGE FEE BEFORE RETURNING THE QUALIFIED MOTOR VEHICLE1
PURSUANT TO THIS SECTION.2
(5) (a) (I) A SECURITY INTEREST , PROMISSORY NOTE , OR3
FINANCING INSTRUMENT FOR THE PURCHASE OF A QUALIFIED MOTOR4
VEHICLE FROM A DEALER DOES NOT TAKE EFFECT UNTIL THE FOURTH5
BUSINESS DAY AFTER THE LATER OF THE CONSUMER PURCHASING THE6
MOTOR VEHICLE OR THE CONSUMER RECEIVING DELIVERY OF THE MOTOR7
VEHICLE.8
(II) UPON NOTICE FROM A DEALER THAT A PURCHASE CONTRACT9
HAS BEEN CANCELED UNDER THIS SECTION , A HOLDER OF A SECURITY10
INTEREST, PROMISSORY NOTE , OR FINANCING INSTRUMENT SHALL11
PROMPTLY:12
(A) R EVERSE THE OBLIGATIONS OF THE CONSUMER UNDER THE13
SECURITY INTEREST, PROMISSORY NOTE, OR FINANCING INSTRUMENT; AND14
(B) REFUND THE PAYMENTS RECEIVED FROM OR ON BEHALF OF THE15
CONSUMER.16
(b) THIS SUBSECTION (5) DOES NOT APPLY IF THE CONSUMER HAS17
FINANCED THE PURCHASE OF A QUALIFIED MOTOR VEHICLE WITHOUT18
GRANTING A SECURITY INTEREST IN THE MOTOR VEHICLE TO OBTAIN THE19
FINANCING.20
(6) A DEALER SHALL NOT:21
(a) C HARGE OR ATTEMPT TO CHARGE A CONSUMER FOR22
UNREASONABLE EXCESS MILEAGE OR UNREASONABLE COST OF REPAIRS ;23
OR24
(b) U SE A CLAIM OF EXCESS MILEAGE OR REPAIRS TO DELAY25
COMPLIANCE WITH THIS SECTION.26
(7) A WAIVER OF THE RIGHT TO RETURN A QUALIFIED MOTOR27
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VEHICLE UNDER THIS SECTION IS VOID AS AGAINST PUBLIC POLICY.1
(8) (a) A VIOLATION OF THIS SECTION IS AN UNFAIR OR DECEPTIVE2
TRADE PRACTICE UNDER THE "COLORADO CONSUMER PROTECTION ACT",3
AS DESCRIBED IN SECTION 6-1-105 (1)(qqqq).4
(b) IN ADDITION TO ANY OTHER REMEDIES, A CONSUMER HARMED5
BY A DEALER 'S VIOLATION OF THIS SECTION MAY RECOVER ACTUAL6
DAMAGES, REASONABLE ATTORNEY FEES AND COSTS, AND, FOR A WILLFUL7
OR KNOWING VIOLATION, TREBLE DAMAGES.8
(9) THE BOARD MAY ADOPT RULES TO IMPLEMENT AND ENFORCE9
THIS SECTION. THE RULES MAY INCLUDE DEFINITIONS FOR "REASONABLE10
MILEAGE", "ORDINARY WEAR AND TEAR ", "REASONABLE RESTOCKING11
FEE", AND "UNREASONABLE COST OF REPAIRS".12
SECTION 3. In Colorado Revised Statutes, 6-1-105, add13
(1)(qqqq) and (1)(rrrr) as follows:14
6-1-105. Unfair or deceptive trade practices - definitions.15
(1) A person engages in a deceptive trade practice when, in the16
course of the person's business, vocation, or occupation, the person:17
(qqqq) VIOLATES SECTION 44-20-130.5;18
(rrrr) VIOLATES ARTICLE 9.4 OF TITLE 5.19
SECTION 4. Act subject to petition - effective date -20
applicability. (1) This act takes effect at 12:01 a.m. on the day following21
the expiration of the ninety-day period after final adjournment of the22
general assembly (August 12, 2026, if adjournment sine die is on May 13,23
2026); except that, if a referendum petition is filed pursuant to section 124
(3) of article V of the state constitution against this act or an item, section,25
or part of this act within such period, then the act, item, section, or part26
will not take effect unless approved by the people at the general election27
HB26-1261-10-
to be held in November 2026 and, in such case, will take effect on the1
date of the official declaration of the vote thereon by the governor.2
(2) This act applies to motor vehicle sales made on or after the3
applicable effective date of this act.4
HB26-1261-11-