2013 Maryland Code
TRANSPORTATION
§ 15-311 - Contents of vehicle sales contracts

§15-311.

(a) A contract for the sale of a vehicle by a dealer shall contain a clear statement of:

(1) The principal amount charged for the vehicle;

(2) Any interest charged on the principal amount;

(3) Any fee charged under § 13-610 of this article;

(4) Any dealer processing charge, as defined in § 15-311.1 of this subtitle; and

(5) Any other charge made in connection with the sale of the vehicle.

(b) In addition to the information required by subsection (a) of this section, a contract for the sale of a new vehicle shall include:

(1) The base price of the vehicle;

(2) The manufacturer’s code or stock number for the vehicle; and

(3) A clear and specific description of each extra item and each extra charge not included in the base price of the vehicle ordered by the buyer.

(c) When a vehicle arrives for delivery, the dealer shall advise the buyer of any extra items ordered by the buyer that are not on the vehicle.

(d) When a vehicle arrives for delivery, the dealer shall advise the buyer of any extra items on the vehicle that the buyer did not order.

(e) When a vehicle arrives for delivery, the dealer shall advise the buyer of the cost of extra items described under subsections (c) and (d) of this section.

§ 15-311 - 1. Dealer processing charge

(a) "Dealer processing charge" defined. --

(1) In this section, "dealer processing charge" includes an amount charged by a dealer for:

(i) The preparation of written documentation of the transaction;

(ii) Obtaining the title and license plates for the vehicle;

(iii) Obtaining a release of lien;

(iv) Filing title documents with the Administration;

(v) Retaining documentation and records of the transaction;

(vi) Complying with federal or State privacy laws; or

(vii) Other administrative services concerning the sale of the vehicle.

(2) "Dealer processing charge" does not include a charge to purchase or install tangible personal property on or in the vehicle, or to perform mechanical service on the vehicle.

(b) Maximum allowable charge. --

(1) If a dealer charges a dealer processing charge, the charge:

(i) Shall be reasonable;

(ii) May not exceed:

1. $ 200 for the period from July 1, 2011, through June 30, 2014; and

2. $ 300 on and after July 1, 2014; and

(iii) Shall reflect dealer expenses generally incurred for the services identified in subsection (a)(1) of this section.

(2) A dealer shall provide a written disclosure of the services included in the dealer processing charge on request by the purchaser.

(c) Disclosure generally. -- Any dealer processing charge or freight charge shall be disclosed to a purchaser as provided in this section.

(d) Statement in contract for sale of vehicle. -- A contract for the sale of a vehicle shall contain a statement, in 12 point type or larger, on the contract form as follows:

"Dealer processing charge (not required by law): $ ....".

"Freight charge: $ ....".

(e) Inclusion of charge in advertised price. -- If a dealer advertises the
price of a vehicle, the amount of any dealer processing charge and freight
charge shall be included in the advertised price unless the dealer clearly and
conspicuously discloses the amount of the dealer processing charge and freight
charge in at least 10 point and bold font within reasonable proximity to the
advertised price.

(f) Price statement. -- The dealer shall attach its price statement to a
window of the vehicle, next to any other price disclosure required by law. The
dealer's price statement shall state the total price for which the dealer is
offering to sell the vehicle. The total price stated shall include any dealer
processing charge, which shall be disclosed above the total price in at least
10 point type as "dealer processing charge (not required by law): $ ......".
The total price may exclude only the taxes and title fees payable to the State.

§ 15-311 - 2. Mechanical repair contracts

(a) "Mechanical repair contract" defined. --

(1) For the purposes of this section, the term "mechanical repair contract" means any agreement or contract sold by a licensed vehicle dealer under which a specified provider agrees to perform over a fixed period of time, for a specific duration and for a specific identifiable price, services relating to the maintenance or repair of a motor vehicle, provided that the purchase of the contract is optional to the purchaser.

(2) The term "mechanical repair contract" includes, but is not limited to, extended warranties and extended service contracts.

(b) Insurance reserves; direct claim. --

(1) A provider of services under a mechanical repair contract shall maintain adequate insurance reserves, as defined by the Insurance Commissioner, for each such contract for the protection of the purchasing consumer. A policy of insurance providing coverage for all obligations and liabilities incurred by a provider under the terms of a mechanical repair contract shall constitute adequate insurance reserves.

(2) The reserves shall be maintained with an insurer authorized to do business in Maryland on an admitted or surplus lines basis.

(3) A purchaser of a mechanical repair contract shall be entitled to make a direct claim against the insurer issuing a policy of insurance under this subsection upon failure of the specified provider to pay any claim or make any refund or consideration due within 60 days after the proof is filed with the provider.

(c) Extended warranties. -- A mechanical repair contract shall be offered in addition to any express warranty originally included as part of the contract for sale of a new motor vehicle.

(d) Contract to set forth date when warranty begins. -- A mechanical repair contract shall clearly and conspicuously set forth the date when the warranty begins.

(e) Contract to set forth date or odometer reading when warranty expires. -- A mechanical repair contract shall clearly and conspicuously set forth the date or the odometer reading at which the warranty expires and the name and address of the insurer issuing the policy of insurance as described in subsection (b) of this section.

(f) Teardown and diagnosis costs. -- The repair of a malfunction or defect covered under a mechanical repair contract shall include the cost of the teardown and diagnosing the malfunction or defect.

(g) Applicability of Maryland Consumer Products Guaranty Act. -- The provisions of the Maryland Consumer Products Guaranty Act, Title 14, Subtitle 4 of the Commercial Law Article, apply to a mechanical repair contract sold by a licensed vehicle dealer.

(h) Applicability of section. -- The provisions of this section do not apply to mechanical repair contracts issued by the motor vehicle manufacturer or the distributor or a wholly owned subsidiary of the manufacturer or the distributor as defined in § 15-201 of this title.

(i) Licensed vehicle dealers have same obligations as seller under § 2-314 of Commercial Law Article. -- Notwithstanding subsection (h) of this section, licensed vehicle dealers who sell mechanical repair contracts shall have the same obligations as a seller under § 2-314 of the Commercial Law Article.