Maryland Law to Require Notice to Purchaser of Vehicle Prior to Dealer-Arranged Financing Approval

Auto Finance Disclosures

On May 12, Governor Larry Hogan (R-MD) signed HB 313, which will require auto dealers to provide notice to the purchaser/lessee before the dealer-arranged third-party financing is approved. The law requires the dealer to “notify a buyer in writing if the terms of a certain financing or lease agreement are not approved by a third-party finance source within a certain period of time.” Specifically, the dealer has four days from the delivery of the vehicle to notify the purchase/lessee of the third-party rejection. If the sale of the vehicle is canceled, the purchaser/lessee must return the vehicle to the dealer within two days of receiving the written notice. The new law is effective October 1, 2015.