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Lawmakers hear competing views on extended‑warranty bill aimed at preventing sales of ineligible coverage
Summary
House Bill 27‑09 would prohibit a warrantor from accepting a fee for an extended warranty unless the warrantor knows the vehicle qualifies for coverage. Dealer representatives sought legislative conversation to identify practical solutions; the Service Contract Industry Council opposed the bill as redundant and ambiguous and urged enforcement of
House Bill 27‑09, introduced for a Feb. 4 Commerce and Consumer Protection hearing, would prohibit a warrantor from accepting a fee for an extended warranty unless the warrantor knows the motor vehicle qualifies for coverage under that warranty.
Daryl Fuller of the Oregon Vehicle Dealers Association said dealers brought the issue to the legislature to spark a broader conversation about situations in which customers buy extended warranties that later prove ineligible for coverage because of vehicle modifications or other exclusions. Fuller urged a collaborative approach among stakeholders, regulators and the attorney general's office to find a practical solution that protects consumers without driving warranty providers out of the Oregon market.
Bill Gunnison of the Service Contract Industry Council told the committee that SCIC supports the principle that warranties should only be sold for eligible vehicles but opposed HB 27‑09 as drafted. Gunnison argued current Oregon law and existing enforcement authority already prohibit the conduct the bill addresses, that the draft would duplicate law, introduce ambiguity about which entities are covered, and misdirect penalties to coverage providers when independent sellers commit improper sales practices.
Representatives of the dealership community said the problem often arises because warranty contracts contain long, detailed exclusions (for example, a provider may exclude vehicles with particular aftermarket equipment such as fifth‑wheel hitches). Consumers may not read those exclusions and later learn coverage does not apply. Fuller said the industry favors exploring solutions that might include clearer disclosure, a short eligibility checklist at point of sale, or other technical approaches rather than a statutory prohibition that could carry enforcement pitfalls.
The committee received no further action on the bill at the hearing; stakeholders encouraged further conversations to identify a workable fix that protects consumers while preserving a competitive warranty market.
