CA AB2311

Establishes regulations for guaranteed asset protection (GAP) waivers in motor vehicle conditional sale contracts, defining them as optional contractual obligations to cancel or waive amounts owed upon total loss or unrecovered theft of a vehicle.

Prohibits conditioning credit extension, credit terms, or contract terms on GAP waiver purchase; requires GAP waiver terms to appear on a separate document that buyers must sign independently and cannot cost more than 4 percent of the financed amount.

Mandates that GAP waivers cannot be sold if the loan-to-value ratio exceeds the waiver's maximum unless conspicuously disclosed to the buyer, and prohibits sales when financed amounts are less than 70 percent of vehicle retail value.

Allows buyers to cancel GAP waivers at any time without penalty and entitles them to pro rata refunds of unearned charges within 60 business days; buyers may recover three times any GAP charges paid if holders violate termination provisions.

Requires written notice informing buyers that GAP waivers are optional and that purchasing optional add-on products or services cannot be required to obtain financing or specific credit terms.