Proposed Revised Regulation 12-6-118(3)(i)
Statement of Authority, Basis and Purpose

Statutory Authority:  Colorado Revised Statutes, Sections 12-6-101, 12-6-102, 12-6-103, 12-6-104, 12-6-118, and, 12-6-118(3)(i).

Basis and Purpose:  Consumer protection, improved compliance, and improved enforcement by means of:
1) clarification of the following:  a) the term, “material particulars”; b) the relationship of the term, “material damage,” to the term, “material particulars”; c) the process required for disclosure by the seller to the consumer; and, d) the relationship of the term, “as is,” in the required disclosure process; and,
2) listing, without limitation, the following:  a) examples of what would be considered material particulars; and, b) examples of what would  not be considered material particulars. 

PROPOSED REVISED REGULATION:

Regulation 12-6-118 (3) (i) 

A.	DEFINITIONS FOR PURPOSES OF THIS REGULATION 

1.	“Contract” means any written agreement, such as a purchase agreement, buyer order or invoice, between a dealer and a buyer for the sale of a vehicle, excluding the Retail Installment Sales Contract (“RISC”).

2.	“Dealer” means a motor vehicle dealer, used motor vehicle dealer, wholesaler, wholesale motor vehicle auction dealer, motor vehicle auctioneer, or a representative of the dealership.

3.	“Seller” means Dealer.

4.	“Material Particulars” means those details concerning a vehicle for sale that are essential or necessary for a reasonable prospective buyer to know prior to making the decision to buy or not to buy a vehicle on specific terms. 

B.   NON-EXCLUSIVE LIST OF “MATERIAL PARTICULARS” 

	Material Particulars includes but is not limited to the following:

1.	The vehicle is a “Salvage vehicle” as that term is defined in the “Colorado Certificate of Title Act,” part 1 of article 6 of title 42, C.R.S.

2.	The vehicle has sustained damage, whether repaired or not repaired, of the following types:

a.	Frame or unibody damage, of any grade or type.

b.	Flood, fire or hail damage.

c.	Accident or collision damage.

3.	The vehicle has been modified in a way that impacts warranty coverage.

4.	The vehicle had been declared a “total loss” by an insurance company.

5.	The vehicle had been stolen.

6.	The vehicle had been used as a police vehicle, vehicle for hire, rental vehicle, or a loaner or courtesy vehicle, if such use is clearly ascertainable from a title brand, from information obtained from a prior owner, or from a Vehicle Identification Number (VIN).

7.	The vehicle had been put to a use or had sustained damage that a reasonable person would consider highly unusual or extraordinary, such as use as a racing vehicle.

C.   MATTERS GENERALLY NOT CONSIDERED “MATERIAL PARTICULARS” 

Material Particulars does not generally include the items on the following list.  This list is not intended to be all-inclusive.

1.   Normal wear and tear.

2.   Completed or prior mechanical repair.

3.	General maintenance.

4.	Repair or replacement of tires, wheels, glass, handlebars, moldings, radios, in-dash audio equipment, or the like, provided that the repair or replacement was completed in a manner reasonably comparable to manufacturer’s specifications and provided that any repaired or replaced item is functioning at the time of sale in the manner that a reasonable person would expect.

5.	Touch-up paint for minor scratches, dents, or dings.

6.	Completed recall repair, provided the repair was done by a dealer authorized by the manufacturer to perform such repairs.

D.   “AS IS” STATEMENT

A statement by the Seller to the buyer that a vehicle is sold “as-is” does not relieve the Seller of the disclosure obligations imposed by this regulation nor relieve the Seller of any other disclosure obligations otherwise required by state or federal law.  An “as-is” statement solely disclaims implied warranties under provisions of the “Colorado Uniform Commercial Code,” Title 4, C.R.S.

E.  DISCLOSURE PROCESS 

Prior to the signing of the Contract, the Seller shall produce a written document disclosing all known Material Particulars.  Both the Seller and buyer must sign the document.  The document is deemed to be part of the Contract.  A signed copy of the Contract and the disclosure document shall be provided to the buyer immediately.  The Seller shall retain a copy of the Contract and the disclosure document.