Colorado § 5-9.3-105 - Calculation and payment of deficiency balance.

§ 5-9.3-105. Calculation and payment of deficiency balance.

(1) The calculation of the payment or waiver of the deficiency balance may exclude the following, as long as these exclusions are clearly specified in the GAP agreement:

(a) Amounts owed for unpaid installments under the finance agreement, including any fees or surcharges imposed as late charges for unpaid installments;

(b) Legally permitted fees incurred after the effective date of the finance agreement;

(c) Fees for the return or dishonor of checks or other instruments tendered as payment;

(d) Premiums or fees for legally permitted insurance added after the effective date of the finance agreement;

(e) Refunds owed on cancellable service contracts and other protection products that were financed in the finance agreement;

(f) The salvage value of the motor vehicle, as determined by the consumer's primary insurer of the motor vehicle, if the totaled motor vehicle is retained by the consumer; and

(g) Deductions taken by the consumer's primary insurer of the motor vehicle for prior unrepaired damage to the motor vehicle if, before taking the deduction, the GAP administrator or lender has documentary proof that:

(I) The consumer submitted an insurance claim related to prior unrepaired damage to the motor vehicle; or

(II) The consumer received payment for the prior unrepaired damage to the motor vehicle.

(2) Except as provided in this article 9.3, the GAP agreement must pay or waive all of the deficiency balance that would have been owed if:

(a) The consumer had maintained property damage insurance covering the actual cash value of the motor vehicle as of the date of loss, even if the consumer has not maintained such property damage insurance; or

(b) The creditor had purchased property damage insurance for the motor vehicle pursuant to section 5-2-209.

(3) The GAP agreement must provide the consumer with a full refund or a credit of the amount of the consumer's deductible charged for property damage, up to five hundred dollars, as part of the payment of, or relief from, liability for the deficiency balance. The GAP agreement may provide additional coverage for the consumer's deductible in excess of five hundred dollars.

Source: L. 2023: Entire article added, (HB 23-1181), ch. 425, p. 2501, § 3, effective January 1, 2024.