Bill Text: DE SB36 | 2025-2026 | 153rd General Assembly | Draft
Bill Title: An Act To Amend Title 21 Of The Delaware Code Relating To Car Purchase Contract Cancellation Option Agreements.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced) 2025-01-03 - Introduced and Assigned to Environment, Energy & Transportation Committee in Senate [SB36 Detail]
Download: Delaware-2025-SB36-Draft.html
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SPONSOR: |
Sen. Brown & Rep. Cooke |
DELAWARE STATE SENATE
153rd GENERAL ASSEMBLY
SENATE BILL NO. 36
AN ACT TO AMEND TITLE 21 OF THE DELAWARE CODE RELATING TO CAR PURCHASE CONTRACT CANCELLATION OPTION AGREEMENTS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend Chapter 63, Title 21 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows and by redesignating accordingly:
§ 6318. Car Purchase Contract Cancellation Option Agreement.
(a) For purposes of this section:
"Cash sale price" means as defined in §2901 of Title 5.
(b)(1) Except as provided in paragraph (e)(1) of this section, when selling a used motor vehicle or new motor vehicle at retail to an individual for personal, family, or household use a dealer must offer the buyer a contract cancellation option agreement that allows the buyer to return the motor vehicle without cause.
(2) The cost of the contract cancellation option is based on the cash sale price as follows:
a. Seventy-five dollars for a motor vehicle with a cash sale price of $5,000 or less.
b. One hundred fifty dollars for a motor vehicle with a cash sale price of more than $5,000, but less than $10,000.
c. Two hundred fifty dollars for a motor vehicle with a cash sale price of $10,000 or more, but less than $30,000.
d. One percent of the cash sale price for a motor vehicle with a cash sale price of $30,000 or more, but less than $50,000.
e. Three percent of the cash sale price for a motor vehicle with a cash sale price of $50,000 or more, but less than $100,000.
f. Five percent of the cash sale price for a motor vehicle with a cash sale price of $100,000 or more.
(c) If a buyer purchases a contract cancellation option, the contract cancellation option agreement must be in a document separate from the conditional sales contract or other motor vehicle purchase agreement and must contain at least all of the following:
(1) The name of the seller and the buyer.
(2) The Vehicle Identification Number and the make, model, and manufacture year of the motor vehicle.
(3)a. How long the buyer has to exercise the right to cancel the purchase under the contract cancellation option and return the motor vehicle to the dealer.
b. The minimum cancellation period is the dealer's close of business on the third business day following the day on which the dealer originally delivered the motor vehicle to the buyer.
(4)a. A statement that clearly and conspicuously states the dollar amount of any restocking fee the buyer must pay to the dealer to exercise the right to cancel the purchase under the contract cancellation option.
b. Except as provided in paragraph (c)(4)c. of this section, the restocking fee may not exceed the following:
1. One hundred seventy-five dollars if the motor vehicle's cash sale price is $5,000 or less.
2. Three hundred fifty dollars if the motor vehicle's cash sale price is more than $5,000, but less than $10,000.
3. Five hundred dollars if the motor vehicle’s cash sale price is $10,000 or more, but less than $20,000.
4. One thousand dollars if the motor vehicle’s cash sale price is $20,000 or more.
c. If a buyer who leased the purchased motor vehicle immediately preceding the dealer's sale of the motor vehicle to the buyer exercises the contract cancellation option, the dealer may increase the restocking fee allowed under paragraph (c)(4)b. of this section by the amount the buyer would have been obligated to pay the lessor at the time of the termination of the lease, if specified in the lease, for the following:
1. Excess mileage.
2. Unrepaired damage.
3. Excess wear and tear.
d. If the limit on the restocking fee is increased in accordance with paragraph (c)(4)c. of this section, the statement required under paragraph (c)(4)a. of this section must include notice of the increased restocking fee.
e. The dealer shall credit the amount paid by the buyer for the contract cancellation option toward the restocking fee. The price for the purchase of the contract cancellation option is not otherwise subject to setoff or refund.
(5) If the dealer is setting a limit on the miles, a statement specifying the maximum number of miles that the motor vehicle may be driven, after its original delivery by the dealer to the buyer, to remain eligible for cancellation under the contract cancellation option agreement. A dealer may not set a mileage limit fewer than 250 miles in the contract cancellation option agreement.
(6)a. A statement that the contract cancellation option gives the buyer the right to cancel the purchase and obtain a full refund, minus the purchase price for the contract cancellation option agreement and any additional fees allowed under paragraph (c)(4) of this section, and that the right to cancel will apply only if, within the time stated in the contract cancellation option agreement, the buyer delivers to the dealer all of the following:
1. A written notice exercising the right to cancel the purchase signed by the buyer.
2. Any restocking fee specified in the contract cancellation option agreement minus the purchase price for the contract cancellation option agreement.
3. The original contract cancellation option agreement and motor vehicle purchase contract and related documents if the dealer gave those original documents to the buyer.
4. All original motor vehicle titling and registration documents, if the dealer gave those original documents to the buyer.
5. The motor vehicle, which must meet all of the following conditions:
A. The motor vehicle is free of all liens and encumbrances, other than any lien or encumbrance created by or incidental to the conditional sales contract, any loan arranged by the dealer, or any car purchase loan obtained by the buyer from a third party.
B. The motor vehicle is in the same condition as when it was delivered by the dealer to the buyer, except for reasonable wear and tear and any defect or mechanical problem, not caused by the buyer, that manifests or becomes evident after delivery.
C. The motor vehicle has not been driven over the mileage limit specified in the contract cancellation option agreement.
b. The agreement may also require the buyer to execute documents reasonably necessary to carry out the cancellation and refund.
(7)a. At the bottom of the contract cancellation option agreement, a statement to indicate the buyer's election to exercise the right to cancel the purchase under the terms of the contract cancellation option agreement, and the last date and time by which the option to cancel may be exercised, followed by a line for the buyer to sign if the buyer chooses to exercise the contract cancellation option.
b. A specific form of statement is not required, but the following statement is sufficient: "By signing below, I choose to exercise my right to cancel the purchase of the motor vehicle described in this agreement." The buyer's delivery of the purchase cancellation agreement to the dealer with the buyer's signature following this statement is sufficient written notice exercising the right to cancel the purchase as required under paragraph (c)(6)a.1. of this section.
c. The dealer shall provide the buyer with the statement required under paragraph (c)(7)a. of this section in duplicate so the buyer can return the signed cancellation notice and keep a copy of the contract cancellation option agreement.
(d)(1) No later than 3 business days after the day on which the buyer exercises the right to cancel the purchase in compliance with the contract cancellation option agreement, the dealer shall cancel the contract and give the buyer a full refund of the cash sale price, minus the restocking fee allowed under paragraphs (c)(4)b. and (c)(4)c. of this section. If the dealer received a portion of the cash sale price by credit card, or other third-party payer on the buyer's account, the dealer may refund that portion of the cash sale price to the credit card issuer or third-party payer for credit to the buyer's account.
(2)a. If the buyer is not charged for the contract cancellation option agreement, the dealer shall return to the buyer, no later than the day after the day on which the buyer exercises the right to cancel the purchase, any motor vehicle the buyer left with the seller as a down payment or trade-in.
b. If the dealer sells or otherwise transfers title to the motor vehicle that was used as a down payment or trade-in, the full refund paid under paragraph (d)(1) of this section must include the fair market value of the motor vehicle left as a down payment or trade-in, or its value as stated in the contract or purchase order, whichever is greater.
(3)a. If the buyer was charged for the contract cancellation option agreement, the dealer shall keep any motor vehicle the buyer left with the dealer as a down payment or trade-in until the buyer exercises the right to cancel or the right to cancel expires.
b. If the buyer exercises the right to cancel the purchase, the dealer shall return to the buyer, no later than the day after the day on which the buyer exercises the right to cancel the purchase, any motor vehicle the buyer left with the seller as a down payment or trade-in.
c. If the dealer mistakenly sells or otherwise transfers title to the motor vehicle by mistake, despite reasonable procedures designed to avoid that mistake, the mistaken sale or transfer of title is not a violation of paragraph (d)(3)a. or paragraph (d)(3)b. of this section. But the full refund paid under paragraph (d)(1) of this section must include the retail market value of the motor vehicle used as a down payment or trade-in, or its value as stated in the contract or purchase order, whichever is greater.
(e)(1) A dealer is not required to offer a contract cancellation option agreement to an individual who exercised the right to cancel the purchase of a motor vehicle from the dealer according to a contract cancellation option agreement for 30 days after the individual cancelled the purchase.
(2) A dealer is not required to give notice of the return of a motor vehicle under this section to a subsequent buyer.
(3) This section does not cancel or limit any disclosure obligation required by any other law.
(f)(1) This section does not affect or alter the legal rights, duties, obligations, or liabilities of the buyer, the dealer, or the dealer's agents or assigns, that would exist without a contract cancellation option agreement.
(2) The buyer is the owner of a motor vehicle when the buyer takes delivery of a motor vehicle until the motor vehicle is returned to the dealer under a contract cancellation option agreement. The existence of a contract cancellation option agreement does not impose permissive user liability on the dealer, or the dealer's agents or assigns.
(g) This section does not affect a buyer’s ability of to cancel the contract or revoke acceptance under any other law.
Section 2. This Act takes effect 90 days after its enactment into law.
SYNOPSIS
This Act requires dealers to offer car buyers the opportunity to purchase a contract cancellation option agreement. The contract cancellation option agreement must allow buyers to cancel a car purchase no less than 3 business days after the dealer delivers the car to the buyer. The cost of the contract cancellation option is based on the cash sale price of the car. A dealer may also charge a restocking fee, based on the cash sale price, if a consumer cancels the car purchase. But the cost of the contract cancellation option must be credited to any restocking fee. If a consumer chooses to buy a car at the end of a lease and then exercises a contract cancellation option, a dealer may charge to that consumer any amount that would have been due under the lease for excess mileage, unrepaired damage, and excess wear and tear. The dealer must keep any trade-in motor vehicles through the end of the cancellation period.
If a consumer cancels a car purchase, the consumer must return the car to the dealer along with the signed contract cancellation option. The car must be free of excess mileage, excess wear and tear, and liens, other than liens created by the sales contract or a loan used to finance the purchase of the car. The dealer must give a full refund, less the restocking fee, and must return any trade-in car. If the dealer mistakenly sells the trade-in car before the cancellation period ends and the buyer exercises the right to cancel, the dealer must also refund the fair market value of the car or the value listed in the contract, whichever is higher.
A dealer is not required to allow the same consumer to purchase a cancellation option again within 30 days after the consumer exercises a cancellation option.
A dealer is not required to give notice of the return of a motor vehicle under this Act to a subsequent buyer. This Act does not cancel or limit any disclosure obligation required by any other law. This Act does not affect or alter the legal rights, duties, obligations, or liabilities of the buyer, the dealer, or the dealer's agents or assigns, that would exist without a contract cancellation option agreement.
The buyer is the owner of a motor vehicle when the buyer takes delivery of a motor vehicle until the motor vehicle is returned to the dealer under a contract cancellation option agreement. The existence of a contract cancellation option agreement does not impose permissive user liability on the dealer, or the dealer's agents or assigns.
This Act does not affect a buyer’s ability of to cancel the contract or revoke acceptance under any other law.
Author: Senator Brown
