Motor Vehicle Sales Finance Act - O.C.G.A. 10-1-30 et seq. Print E-mail
Written by Kerry S. Doolittle   
Friday, 09 April 2010

If you want to sell a motor vehicle using an installment sale contract, very specific legal requirements must be met or you may face undesirable consequences.  If you are a consumer buying a motor vehicle with this type of financing, being aware of these requirements may help you determine if the seller is a legitimate and experienced business.  A sloppy installment sale contract may be a sign of a fly by night and risky business you should avoid.

 A retail installment contract must meet the following statutory requirements:

●    It must be written.
●    It must be printed in at least 6 point type.
●    Some provisions must be made "conspicuous", which means that those parts must use some device such as bold print, larger print, all capital letters, or underlining, or in some other way make those provisions stand out from the other printed or typed provisions. It might be contained in a box, for example.

●    It must contain the name of the buyer.

●    It must contain the residence or place of business of the buyer.

●    It must contain the name of the seller.

●    It must contain the place of business of the seller.

●    It must contain a description of the motor vehicle, including its:
      Make
      Year Model
      Model
      Identification number or marks.

●    It must contain the following statement, in conspicuous type:
 Liability insurance coverage for bodily injury and property damage caused to others is not included in this contract.

●    It must contain the following statement, in conspicuous type:
 Notice to the Buyer: Do not sign this contract before you read it or if it contains any blank spaces. You are entitled to an exact copy of the contract you sign.

●    It should contain the following statement, in conspicuous type, which must be located directly above the buyer's signature, in conspicuous type:
 Buyer hereby acknowledges receipt of a completed copy of this contract at the time it is signed.

●    It should contain a provision creating a delinquency charge of 5% of the installment amount or $50.00, whichever is less, on any installment not paid within 10 days of its due date

●    It should contain a provision for the payment of reasonable attorney's fees if the contract is referred for collection to an attorney, plus court costs.

●    It must be signed by the buyer.

●    It must be signed by the seller.

●    It must be completed (i.e. no blanks to fill in later) prior to signing.

●    A completed copy must be given to the buyer at the time it is signed. Otherwise, a buyer who has not accepted delivery of the vehicle can rescind the contract and receive a full refund.

Permissible Finance Charges

 Where the amount financed exceeds $5,000.00, you may establish any finance charge (interest rate), so long as it does not exceed other generally applicable usury statutes. Otherwise, the finance charge (exclusive of insurance, other benefits, and official fees), shall not exceed:

 10% per year for a new vehicle with a current year model;
 13% per year for a vehicle with a year model not more than two years old;
 15% per year for a vehicle with a year model two to four years old;
 17% per year for a vehicle with a year model more than four years old.

 A minimum $25.00 finance charge may be charged on any retail installment transaction.

Civil and Criminal Liability

 A willful and intentional violation of the Motor Vehicle Sales Finance Act is a misdemeanor carrying a fine up to $500.00 for the first offense. Subsequent offenses can result in larger fines and/or imprisonment.

 In the case of a willful and intentional violation, the buyer may recover a minimum of $100.00 or double the "time price differential" and any delinquency charge and any attorney's fees and court costs charged and paid with respect to the transaction, but the seller may recover from the buyer the cash price and the cost of any insurance purchased by seller.


 A failure to comply may be corrected within ten days after the date of execution of the contract by the buyer.


 Any violation bars recovery of any finance charge, delinquency, or collection charge on the contract.

 Kerry S. Doolittle

 
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