Imagine walking into a dealership in Oregon, excited to drive off with a new car, only to be bogged down by confusing financing terms and unexpected delays in finalizing the deal. This scenario has been all too common for many buyers, but a groundbreaking piece of legislation signed by Governor Tina Kotek on September 15 is set to change the landscape of auto finance in the state. Known as House Bill 3178, this law, effective from 2026, aims to bring much-needed fairness and transparency to the car-buying process. It targets retail installment contracts (RICs) and lease agreements, ensuring that consumers are not left in the dark about their financial commitments. By addressing critical pain points in auto transactions, the legislation promises to empower buyers with clearer information and stronger protections, marking a significant step forward for consumer rights in Oregon.
Enhancing Transparency Through Clear Disclosures
A cornerstone of House Bill 3178 lies in its push for accessible and understandable communication between auto dealers and consumers. The law mandates that dealers provide plain-language disclosures about consumer rights concerning RICs and lease agreements, ensuring that complex financial jargon doesn’t obscure important details. To cater to Oregon’s diverse population, these disclosures must be available in the state’s six most commonly spoken languages, making the information accessible to a broader range of buyers—defined as individuals purchasing or leasing a motor vehicle. This initiative seeks to eliminate misunderstandings that often arise during transactions, empowering consumers to make informed decisions. Beyond language accessibility, the Oregon Attorney General will offer a standardized disclosure form on their website, which dealers are required to use. This move toward uniformity aims to create consistency across all auto finance dealings, fostering trust and clarity in an industry often criticized for opacity.
Streamlining Processes and Protecting Consumer Rights
Another pivotal aspect of this legislation focuses on tightening timelines and bolstering consumer protections during the financing process. Previously, dealers had a 14-day window to finalize RICs or lease agreements, but House Bill 3178 reduces this period to just 10 days, pushing for quicker resolutions and operational efficiency. Additionally, buyers gain the right to void a transaction if the lender—defined as the entity acquiring the RIC or lease from the dealer—fails to honor the exact negotiated terms within 10 calendar days after the buyer takes possession of the vehicle. This safeguard prevents post-purchase surprises in financing conditions. Furthermore, if a contract is voided, dealers must notify the buyer within two days, ensuring prompt communication. These measures collectively aim to create a more equitable experience, reflecting a broader trend of accountability in the auto finance sector. By prioritizing timely updates and stricter deadlines, the law addresses past grievances, setting a precedent for consumer-centric reforms in Oregon’s automotive market.
