Simple Interest Motor Vehicle Retail Installment Contract...

Simple Interest Motor Vehicle

Retail Installment Contract

and Security Agreement

Multistate Manual

September 2010

Form PM-RSSIMV-LF 9/27/2010 ii

Table of Contents

INTRODUCTION................................................................................. 1 GLOSSARY....................................................................................... 3 Warranties and Limitations ................................................................. 6

Warranties and Limitations for this Manual ............................................................. 6 Warranties and Limitations for the Forms That are the Subject of this Manual................... 7 Other Important Terms for the Use of this Manual..................................................... 7

RETAIL INSTALLMENT CONTRACT AND SECURITY AGREEMENT (RSSIMVLFAZCO) ........ 8 PART A – IDENTIFICATION OF THE RETAIL INSTALLMENT CONTRACT AND

SECURITY AGREEMENT ..................................................................... 13 PART B – TRUTH-IN-LENDING DISCLOSURE (REG. 226.18)........................... 13 PART C – DESCRIPTION OF PROPERTY................................................... 16 PART D – DESCRIPTION OF TRADE-IN .................................................... 16 PART E – ASSIGNMENT ...................................................................... 16 PART F – CONDITIONAL DELIVERY........................................................ 17 PART G – SALES AGREEMENT .............................................................. 17 PART H – ITEMIZATION OF AMOUNT FINANCED Reg. 226.18(c) .................... 18 PART I – INSURANCE DISCLOSURES ....................................................... 20 PART J – ADDITIONAL PROTECTIONS .................................................... 22 PART K – THIRD PARTY AGREEMENT..................................................... 22 PART L - SIGNATURES....................................................................... 22

Form PM-RSSIMV-LF 9/27/2010 1

INTRODUCTION USE OF THIS MANUAL. Use of this manual will constitute an express acceptance of all the terms set forth in the "Introduction," "Warranties and Limitations" and "Other Important Terms for the Use of this Manual" sections of this manual.

Forms and Purpose. This manual is intended to assist purchasers of the following copyrighted Wolters Kluwer Financial Services, Inc. (Wolters Kluwer Financial Services) simple interest retail installment contract and security agreement forms:

RSSIMVLFAZ [state abbreviation]

RSSIMVLFA- [state abreviation]

RSSIMVLFLZ [state abreviation]

RSSIMVLF- [state abbreviation]

Usage. The forms listed above should only be used for the purposes for which they were intended.

Please note that these forms have been designed for use in closed-end indirect transactions by sellers of retail motor vehicles to consumers that are subject to federal Truth in Lending (Regulation Z) and state enacted consumer laws and regulations. They can also be used by sellers for commercial or agricultural closed-end indirect retail motor vehicle transactions.

The forms listed above are intended for transactions which are secured by most types of motor vehicles as defined by state law.

CAUTION: THESE FORMS ARE NOT DESIGNED FOR AND SHOULD NOT BE USED FOR THE FOLLOWING:

• variable interest rate transactions, including transactions with either discounted or premium initial interest rates

• open-end credit

• multiple advance transactions

• transactions which require credit insurance (e.g., life, accident)

• transactions where mortgage insurance (PMI) is charged, collected, etc.

• transactions secured by a motor vehicle, such as a manufactured home or recreational vehicle, which will be the buyer’s principal dwelling

• transactions secured by non-purchase money security interests

• transactions in which the interest rate is raised when payments are in default


Financing Negative Equity: Some dealers will accept a trade-in which has greater debt owed on it than the trade-in allowance. If the cash down payment or rebate is not large enough to off-set the negative value of the trade-in, the dealer is financing that negative value and the amount financed must be increased accordingly. For example, assume a vehicle is being traded-in has a lien against it for $10,000 and is only worth $8,000. The vehicle has a trade-in value of negative $2,000. If the buyer is paying in cash only $1,000 down, then the dealer is financing the remaining $1,000 still owed on the trade-in. The dealer is making a loan for $1,000 in addition to financing the sale of the goods purchased. This is financing negative equity.

The Federal Reserve has determined that the down payment should never be disclosed as a negative number, but rather as zero since the down payment is a number that reduces the cash price. The amount financed must be increased by the amount of any negative net trade-in. We have revised the Itemization of Amount Financed to aid in the proper disclosure of the down payment and to add the financed negative equity in the calculation of the amount financed.

The state laws on whether or not dealers can finance negative equity tend to be vague. Unless specifically prohibited by state law, we have revised our state versions of this contract to allow you to disclose the financing of negative equity. HOWEVER, it is up to you to determine whether you need to be licensed under state law to do this type of financing. Although we have not fully researched which states require a special license to do this type of financing, we know that a number of states require a separate license. The penalties for financing negative equity without the proper license are severe in some states. As a result, before doing any financing of negative equity, we strongly encourage you to consult with your own legal counsel.

Format. In this manual, we attempt to answer the most common questions and problems you might confront in completing the forms, with special emphasis on the disclosures required by the Truth-in-Lending regulations. THIS MANUAL IS NOT INTENDED TO ADDRESS STATE SPECIFIC LAWS.

The pages of the RSSIMVLFAZCO are reduced and copied at the beginning of this manual. The RSSIMVLFAZCO is used for illustrative purposes only. The forms for your state may have a slightly different format (for example, the types of charges provided for in the contract may vary from state to state).

The parts of the RSSIMVLFAZCO thus reproduced and copied are numbered (for example, A-1, A-2, B-1, B-2, etc.) to correspond with similarily numbered explanatory text in this manual. Feel free to photocopy the numbered sample so you have a loose sample to follow along with the explanatory text. The explanatory text begins with a simple statement of what would commonly be filled in on the line being discussed. In some cases, this simple explanation is followed by a more detailed explanation, with citations to the Truth-in-Lending regulation and cross-references to other portions of the form which need to be considered with the item under discussion. You may also want to refer to the Glossary for definitions and explanations of key terms.


GLOSSARY Throughout the text of this Introduction, the Warranties and Limitations, the Other Terms for the Use of this Manual, and the Manual itself, we use certain abbreviations and terms:

The Term: Means:

We Wolters Kluwer Financial Services.

You The seller or creditor.

Reg. 226.18(a) Section 18(a) of the Federal Reserve Board’s Regulation Z (Truth in Lending) which may be found at 12 Code of Federal Regulations 226.18(a).

Commentary The Official Staff Commentary on Regulation Z (Truth in Lending). In this manual, we normally use the Regulation number preceded or followed by the word “Commentary.” This means you should read the Commentary to the Regulation having that number. We do not use the numbering found in the Commentary, which varies somewhat from the numbering of the Regulation.

U.C.C. § 9-204 The Uniform Commercial Code Article 9, Section 204.

C.F.R. Code of Federal Regulations.

12 U.S.C. § 901 Title 12 United States Code Section 901.

FTC Federal Trade Commission.

Annual Percentage Rate (APR) The cost of credit as an annual rate. It must be computed according to Reg. 226.22 and Appendix J and disclosed as a part of the Regulation Z disclosures required by Reg. 226.18. The APR may differ from the interest rate charged on a transaction because it factors in the cost of certain other charges (finance charges). The APR may also vary from the interest rate depending on the method of computation used and the treatment of odd days interest (see Commentary § 17(c)(3) and (4)).

Finance Charge Any charge which is a cost of credit that is not otherwise excluded by Regulation Z. It does not include any charge that would be payable in a comparable cash transaction. See Reg. 226.4 and Commentary for a discussion of examples of finance charges and charges that are not finance charges.


Additional Finance Charge Any charge that is a finance charge other than simple interest applied to the declining balance. Examples include origination fees, documentation fees, loan fees, and the like.

Prepaid Finance Charge Any finance charge paid separately in cash or by check before or at the consummation of a transaction, or withheld from the proceeds of the credit at any time. Reg. 226.2(a)(23). Prepaid finance charges must be treated as a part of the finance charge. As a result, if there are prepaid finance charges, the total finance charge will be higher than the total interest charged and the APR will be higher than the interest rate. Prepaid finance charges will also make the amount financed lower than the cash price (because prepaid finance charges are subtracted from the cash price).

Amount Financed The amount of credit provided. In a retail installment sale it is calculated by determining the cash price (subtracting any down payment); adding any other amounts that are not part of the finance charge and are financed; and subtracting any prepaid finance charges. Reg. 226.18(b).

Cash Price The price at which a creditor offers to sell for cash the goods or services. At the creditor’s option, the term may include the price of accessories, services related to the sale, service contracts (even if the service contract is characterized as insurance under state law) and taxes and fees for license, title, and registration. The term does not include any finance charges. See Reg. 226.2(a)(9) and Commentary.

Down Payment The amount paid to the seller to reduce the cash price of goods or services purchased in a credit sale transaction. It includes cash and the value of any property used as a trade-in. If a consumer makes a lump sum payment intended to partially reduce the cash price and to pay prepaid finance charges, only the portion attributable to reducing the cash price is part of the down payment. Reg. 226.2(a)(18) and Commentary.

Itemization of Amount Financed A disclosure of the items listed in Reg. 226.18(c) and Commentary. Regulation Z requires that the creditor either inform the consumer that a written itemization will be provided on request or the creditor can provide the itemization disclosure as a matter of course. Our retail installment contracts provide that the itemization is to be given automatically.


Form Specific. This manual is written for use only with respect to the above listed forms. The existence of varying state laws means that some of the terms discussed may not be applicable in your state. The explanatory text will usually point this out where it applies. Additionally, there may be provisions in the contract developed for your state which are not discussed in this manual. Feel free to call us at our toll-free number (1-800-397-2341 ext. 5474) if you need information about specific sections

Private Attorneys. We interpreted many statutes, cases and regulations when developing this manual, the forms to which it pertains, and all of our other forms.

We strongly encourage you to seek the advice of your own attorney concerning the use and legality of this manual, the forms to which it pertains, and all of our other forms. To assist you and your counsel in your review of our forms and this manual, we have included legal citations in this manual. If you or your counsel’s interpretations are contrary to ours, you should follow your own interpretations in using and completing the forms.

Comments. We encourage you to comment on and criticize this manual, the forms to which it pertains, and all of our other forms. We make every effort to keep up with statutes, regulations, case law and lending practices, but the lending industry is constantly evolving, and our effort is often assisted by our customers. We especially appreciate copies of any statutes or cases which you might feel are pertinent. Please submit your comments in writing either to your Sales Representative or to:

Compliance Services Department Wolters Kluwer Financial Services, Inc. 6815 Saukview Drive P.O. Box 1457 St. Cloud, MN 56302-1457


Warranties and Limitations

Warranties and Limitations for this Manual

WARRANTY DISCLAIMER.

THIS MANUAL (INCLUDING ANY UPDATES TO IT) IS PROVIDED TO YOU AS IS AND WITH ALL FAULTS. WOLTERS KLUWER FINANCIAL SERVICES (WKFS) DOES NOT EXPRESSLY OR IMPLIEDLY WARRANT THE LEGALITY OR UTILITY OF THIS MANUAL OR THE INFORMATION THAT IT CONTAINS. THE USER OF THIS MANUAL MUST MAKE HIS/HER OWN INDEPENDENT JUDGMENT ON THESE ITEMS. WKFS MAKES NO WARRANTY, EXPRESS, IMPLIED, BY DESCRIPTION, BY SAMPLE OR OTHERWISE, AND IN PARTICULAR WITHOUT LIMITATION, MAKES NO IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS OF PURPOSE REGARDING THIS MANUAL.

WKFS employees, sales representatives, and other WKFS agents and representatives do not have authority to create any warranty obligations regarding this manual or to modify the above Warranty Disclaimer. Any such created warranty obligations or modifications will not be effective unless they are in writing and signed by the President or any Vice President of WKFS.

LIMITATION OF LIABILITY AND REMEDIES.

WKFS's liability, whether in contract, warranty, in tort, or otherwise arising in any way in connection with the providing, selling or licensing of this manual (including any updates to it) or your using it SHALL NOT INCLUDE LIABILITY FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOST PROFITS, LOSS OR EXPENSE. WKFS's liability for any damages based on the providing, selling or licensing of this manual (including any updates to it) or your using it, regardless of the form of action, shall not be more than the amount you paid for it or ten dollars, whichever is less.

TIME LIMIT.

No action, regardless of form, arising out of the providing, selling or licensing of this manual or your using it may be brought by either party more than one (1) year after the cause of action has occurred, except that this limitation will not apply to an action for non-payment or intellectual property infringement brought by WKFS.

NO SUBSTITUTE FOR LEGAL COUNSEL.

Before using this manual, you are advised to have your attorney review it to determine its legal sufficiency for your purposes. You acknowledge that WKFS is not authorized to practice law, nor may any of WKFS's officers, employees or agents provide legal counsel or accounting advice to you or your institution. Thus, any questions requiring legal or accounting advice must be directed to your institution's attorney or accounting professional for whom WKFS has no obligation or liability. The following notice is required by law:

WOLTERS KLUWER FINANCIAL SERVICES’ PRODUCTS AND SERVICES ARE NOT A SUBSTITUTE FOR THE ADVICE OF AN ATTORNEY


Warranties and Limitations for the Forms That are the Subject of this Manual

The Form(s) that are the subject of this manual are covered by an express warranty as follows:

• Preprinted Forms. If you received the Forms in preprinted format, they are covered by the Wolters Kluwer Financial Services 2010 Limited Compliance Warranty for Paper and Static Forms–Indirect Lending and Lease Documents as it may be updated or amended from time to time. The current Limited Compliance Warranty is located on WKFS's internet website: www.wolterskluwerfs.com. Refer to the website for terms of the warranty.

• WKFS Software. If you produce the Form(s) using WKFS document-generating software, they are covered by the express warranty contained in your WKFS software license agreement. Refer to your license agreement for terms of the warranty.

• Electronic Format. If you received the Form(s) in an electronic format ("EForms" or other electronic images) through a license with WKFS or with a third party provider, they are covered by the express warranty contained in your license agreement with WKFS or the third party provider. Refer to your license agreement for terms of the warranty.

Other Important Terms for the Use of this Manual

APPLICABLE LAW.

The terms under which this manual is provided, sold, licensed or used will be governed by the laws of the State of Minnesota without regard to its conflict of laws provisions or those of any other state. Any action relating in any way to this manual will be exclusively venued in a court of competent jurisdiction in the State of Minnesota.

COPYRIGHT AND TRADEMARK.

All rights reserved.

No part of this manual or any of WKFS's copyrighted forms may be reproduced by any person, by any means, or for any reason, without WKFS's express written permission. WKFS vigorously enforces its copyright interests and you should be aware that there are criminal penalties as well as civil penalties for violation of copyright law. For additional information about reproducing, licensing, or purchasing this manual, please contact us at:

Wolters Kluwer Financial Services 6815 Saukview Drive P.O. Box 1457 St. Cloud, MN 56302-1457

Telephone: 1-800-397-2341


RETAIL INSTALLMENT CONTRACT AND SECURITY AGREEMENT (RSSIMVLFAZCO)






PART A – IDENTIFICATION OF THE RETAIL INSTALLMENT CONTRACT AND SECURITY AGREEMENT A-1 Fill in the name and address of the seller. The identity of the seller does not have to be

included with the other Truth in Lending Disclosures and is the only required Truth in Lending Disclosure in the transaction that can be more conspicuous than the words Annual Percentage Rate and Finance Charge. Reg. 226.17(a)(1) (footnote 38) and 226.17(a)(2).

A-2 Fill in the name(s) and address(es) of the buyer(s). This should be the same address as you would use for any notice of default or notice of sale of the contract.

A-3 Fill in any number that you have assigned to the contract.

A-4 Fill in the date as of which you are making the disclosures. Often this will be the date the buyer(s) sign the contract. However, if the WKFS Conditional Delivery Agreement (CDA) is being signed in conjunction with the Retail Installment Contract and Security Agreement, the date that should go in A-4 is the same as the date you insert as the “Deadline” in the CDA. If another early delivery agreement is signed in conjunction with the Retail Installment Contract and Security Agreement, you should put a date in A-4 that is appropriate in light of the early delivery agreement used.

A-5 Check this box if the contract is for business, commercial or agricultural purposes.

A-6 Check this box if the name(s) and address(es) and signature(s) of additional buyers are on an attached addendum.

PART B – TRUTH-IN-LENDING DISCLOSURE (REG. 226.18) B-1 Fill in on line B-1 the annual percentage rate you calculate for this contract. See Reg.

226.18(e) and Reg. 226.22 and Commentary. ESTIMATE – This form is not designed for any disclosed item to be labeled as an “estimate” as allowed by Reg. 226.17(c). See Reg. 226.17(c) and Commentary. TOLERANCE – The tolerance for regular transactions is .125% (1/8%) either way. For example, if the disclosed APR is 15.20% and the actual APR is 15.324%, the disclosure is within acceptable limits. Reg. 226.22(a)(2). The tolerance for “irregular” transactions is .25% (1/4%) either way. An irregular transaction is defined in Reg. 226.22(a)(3)(footnote 46). CONSPICUOUS – See Reg. 226.17(a)(2) for the requirement that annual percentage rate and finance charge be more conspicuous than other disclosures. See Commentary to Reg. 226.17(a)(2) for guidelines on compliance with this rule. See Reg. 226.22(c) for the optional rule on one APR calculation when all transactions within a class can be disclosed with the same APR. See Appendix J to Reg. 226 for actuarial or U.S. Rule methods of calculation. Actuarial and


U.S. Rule methods of calculation are defined in Appendix J(a)(2) and (3). See Reg. 226.22(b) for the exception allowed for appropriate use of Federal Reserve’s APR tables. See 15 USC 130 for liability exposure for inaccurate or unmade APR disclosures.

B-2 Fill in on line B-2 the total finance charge. See Reg. 226.18(d) and Commentary. OTHER CHARGES – Remember to include prepaid finance charges and additional finance charges, if any. TOLERANCE – The tolerance is $5.00 on transactions with an amount financed of $1,000.00 or less, and $10.00 on transactions with an amount financed of more than $1,000.00. Reg. 226.18(d) (footnote 41). CAUTION: THIS FORM IS NOT DESIGNED FOR CONTRACTS IN WHICH THE FILING FEES ARE PAID IN CASH. Because most sellers finance the filing fees, this contract assumes that filing fees are financed. To exclude filing fees from the finance charge, the fees must be “itemized and disclosed”. Reg. 226.4(e). Since the fees are itemized and disclosed in the Itemization of Amount Financed if the fees are financed, this requirement is met. If the fees are paid in cash, consult your attorney to determine whether you may manually add filing fees and the amount of the fees within the Fed Box to exclude them from the finance charge. CAUTION: THIS FORM IS NOT DESIGNED FOR, AND SHOULD NOT BE USED ON, CONTRACTS THAT REQUIRE CREDIT INSURANCE. PREMIUMS FOR REQUIRED CREDIT INSURANCE ARE A FINANCE CHARGE. See Part I, Insurance Disclosures, below and Reg. 226.4(d) for conditions which must be met to exclude credit insurance costs from the finance charge.

B-3 Fill in on line B-3 the amount financed. See Reg. 226.18(b) and Commentary. There is no tolerance permitted for this disclosure. See H-1 through H-22 concerning the Itemization of Amount Financed, including especially H-21 regarding prepaid finance charges. See G-1 regarding the potential for the amount financed to be different from the principal amount of the contract.

B-4 Fill in on line B-4 the total of payments. The total of payments is the sum of the payment amounts disclosed in B-7 pursuant to Reg. 226.18(g). See B-1 and B-2 for the basis for this disclosure, as well as the use of estimates and descriptive phrases. TOLERANCE – There is no mention of tolerance for this disclosure.


B-5 Fill in on line B-5 the amount of any down payment. See Reg. 226.18(j) and 226.2(a)(18). This amount should be the same as the down payment on line H-10 and will include the sum of any cash payment to reduce the cash price, any trade-in, and any manufacturer’s rebate. If a consumer makes a lump sum payment, partially to reduce the cash price and partially to reduce the prepaid finance charges, only the portion attributable to reducing the cash price is part of the down payment. Do not disclose the down payment as a negative value. If a trade-in has a lien against it which exceeds the value of the trade-in, disclose the down payment as $0. See Commentary to Reg. 226.2(a)(18). See also H-10.

B-6 Fill in on line B-6 the total sale price. The total sale price is the sum of the cash price (including the amount of any down payment), the finance charge, and any amounts that are financed and are not a part of the finance charge. See Reg. 226.18(j). SALES TAX – Include the sales tax in the total sale price only if you are financing the sales tax. If you elect to include the sales tax as a part of the cash price on line H-2, then the sales tax should be included in the total sale price. See Reg. 226.2(a)(9) and Commentary and Reg. 226.18(j) and Commentary. Remember, sales tax is no a finance charge, because it is imposed whether or not the sale is financed. FINANCING NEGATIVE EQUITY – If the lien against the trade-in exceeds the value of the trade-in, and the down payment is disclosed as $0 rather than a negative amount, then the amount of the financed trade-in balance should be included in the total sale price. But if the amount of the financed trade in balance is already included in the cash price, it should not included a second time in calculating the total sale price.

B-7 These columns and lines are for disclosing the number, amounts, and due dates of payments, i.e., the payment schedule. Reg. 226.18(g) and commentary. EXAMPLE – No. of Payments Amount of Payments When Payments Are 36 $247.50 Monthly beginning 7/15/2010 The amount of payments you disclose in B-7 will include the finance charge attributable to the payment as well as the portion attributable to the payment of amount financed. IN ADDITION, the amount of each payment that you disclose in B-7 may (but need not) also include any additional amount due with the payment which is neither part of the amount financed nor the finance charge. If any portion of the down payment is deferred, the repayment terms for the deferral must be included in the payment schedule in B-7.

B-8 Check the appropriate box to indicate whether a minimum finance charge may or will not be imposed in the event the contract is paid off early.


For Reg. Z purposes, in a simple interest contract a minimum finance charge is a penalty and if imposed must be disclosed as such by checking the box in front of “may”. If you do not impose a minimum finance charge, check the box in front of “will not”. See Reg. 226.18(k)(1) and Commentary.

B-9 Fill in on line B-9 the amount of any filing fees.

PART C – DESCRIPTION OF PROPERTY C-1 Enter in the appropriate areas the year, make, model, body style, vehicle identification

number, and odometer mileage of the motor vehicle being sold.

C-2 Check the appropriate box to indicate whether the motor vehicle being sold is new, used, or a demo.

C-3 Provide here any other description you deem appropriate of the motor vehicle, the equipment it is equipped with, and the items purchased with it. In the Security Agreement section of the contract the buyer gives you a security interest in the motor vehicle sold, all accessions, attachments, accessories, and equipment placed in or on the vehicle. Although U.C.C. 9-314 defines “accession” as goods that are installed in or affixed to other goods, the common law in some states may not follow this approach or may not be very clear. Consequently, if you are adding expensive items to the vehicle being sold and want to make sure you have a valid security interest in the additional items, you should check with your attorney as to whether you need to describe the additional items or take a separate security interest in them. The Security Agreement section of the contract also states that the buyer is giving you a security interest in proceeds and premium refunds of any insurance and service contracts purchased with the contract. State laws are not always clear and consistent regarding how to protect such a security interest. Consequently, you should check with your attorney as to whether you should include a description of those items in C-3 and whether you need to take additional steps to protect such a security interest (such as filing a UCC financing statement).

PART D – DESCRIPTION OF TRADE-IN D-1 Fill in a description of any trade-in here.

PART E – ASSIGNMENT E-1 Check this box if the seller’s interest under the contract is being assigned.


E-2 If the seller’s interest under the contract is being assigned, fill in the name of the assignee on line E-2.

E-3 If the seller’s interest under the contract is being assigned, fill in the assignee’s phone number on line E-3.

PART F – CONDITIONAL DELIVERY F-1 Check this box if a Conditional Delivery Agreement is being signed. A copy of the Conditional

Delivery Agreement must be attached to the Retail Installment Contract and Security Agreement.

PART G – SALES AGREEMENT G-1 Fill in on line G-1 the principal amount upon which interest will accrue. If additional finance

charge is financed, the principal amount will include the additional finance charge. PRINCIPAL VS. AMOUNT FINANCED – It is possible for the principal amount that you fill in on line G-1 to be different from the amount financed that you include on lines B-3 and H-22. This would be true, for example, if the buyer pays a prepaid finance charge.

G-2 Fill in on line G-2 the interest rate that will be applied to the declining balance of the principal. INTEREST VS. ANNUAL PERCENTAGE RATE – Often the rate of interest will be different from the annual percentage rate disclosed on line B-1. The annual percentage rate is the cost of credit as an annual rate that includes interest and additional finance charges. OTHER CHARGES – The annual percentage rate disclosed on line B-1 will be larger than the interest rate if you charge prepaid finance charges or additional finance charges. COMPUTATION – The annual percentage rate may also very from the interest rate depending on the method of computation you use and the treatment of odd days interest. See Commentary to Reg. 226.17(c)(3) and (4).

G-3 Fill in line G-3 to state the method or basis you will use to accrue interest on this contract. NOTE: Some states restrict the accrual methods allowed. EXAMPLE – If you assume that each month has 30 days and that a year has 360 days, line G-3 should be completed to state that “Finance charges accrue on a 30/360 day basis.” EXAMPLE – If you assume that a year has 365 days and you calculate interest according to the actual number of days a principal balance is outstanding, line G-3 should be completed to state that “Finance charges accrue on an actual/365 day basis.”

G-4 Check this box if the buyer is agreeing to make deferred down payment(s).


G-5 Check this box if you are imposing an additional charge.

G-6 Fill in on line G-6 the amount of the additional charge. The additional charge should be included in the finance charge on line B-2. The additional charge will have the effect of increasing the annual percentage rate on line B-1.

G-7 If you are imposing an additional charge, check the appropriate box to indicate how the additional charge will be paid. Check “paid in cash” if the additional charge will be paid in cash or by check at or before the closing. If the additional charge is collected in this manner it is a prepaid finance charge for purposes of the itemization of Amount Financed and should be included on line H-21. Check “financed over the term of the Contract” if the additional charge will be financed and collected at the closing. If the additional charge is collected in this manner it is a prepaid finance charge for purposes of the Itemization of Amount Financed and should be included on line H-21. Check “financed over the term of the Contract” if the additional charge is not paid in cash or by check at or before the closing, and is not financed and collected at the closing, but rather is collected pro rata over the term of the loan. The additional charge collected in this manner it is not a prepaid finance charge for purposes of the Itemization of Amount Financed and should not be included on line H-21.

G-8 Line G-8 provides a place for the buyer and seller or just the buyer to initial all pages. This is optional and not legally required for most, if not all, states.

G-9 Check this box if a minimum finance charge is being imposed.

G-10 Fill in on line G-10 the amount of the minimum finance charge being imposed.

G-11 Check this box to make the Colorado Uniform Consumer Credit Code apply, even if it would not otherwise apply.

PART H – ITEMIZATION OF AMOUNT FINANCED Reg. 226.18(c) H-1 If sales tax is financed and included on line H-2, fill in the amount of the sales tax on line

H-1. Sales tax should not be filled in on line H-1, and should not be included on line H-2, unless it is financed.

H-2 Fill in on line H-2 the cash price of the vehicle being sold. See the Glossary for an explanation of “cash price”. Any charges imposed equally in cash and credit transactions may be included in the cash price, or they may be treated as other amounts financed under Reg. 226.18(b)(2). DOCUMENTATION FEE – If a fee for the preparation of documents is allowed by state law and


is charged in both cash and credit transactions, the fee may be included in the cash price. If the documentation fee is charged only in credit transactions it is a finance charge and must be disclosed on lines H-18 and H-19.

H-3 Fill in on line H-3 the agreed value of any trade-in.

H-4 Fill in on line H-4 the name of any third party being paid off with respect to the trade-in.

H-5 Fill in on line H-5 the amount thus being paid off with respect to the trade-in.

H-6 Subtract the amount on line H-5 from the amount on line H-3 and enter the result on line H-6, unless the result is a negative number. If the result is a negative number, enter $0 on line H-6.

H-7 Fill in on line H-7 the amount of any cash down payment.

H-8 Fill in on line H-8 the amount of any manufacturer’s rebate.

H-9 Fill in on line H-9 the total of any deferred down payment(s) if, but only if, the deferred payment(s) are due and payable by the second regularly scheduled payment and do not result in the accrual finance charges. See generally G-4.

H-10 Add H-6 through H-9 and fill the result in on line H-10.This is the down payment and should be the same as the amount on line B-5.

H-11 Subtract the down payment on line H-10 from the cash price on line H-2 and enter the result on line H-11. This is the unpaid balance of the cash price.

H-12 Fill in on line H-12 the amount of any financed trade-in balance. The financed trade-in balance is the amount, if any, by which the amount on line H-5 exceeds the amount on line H-3.

H-13 Fill in on line H-13 the total of title, license, and other fees paid to public officials as part of the transaction to the extent that such fees are financed. Do not include on this line any fees retained by you such as documentation fees. This line is designed only for amounts that are actually paid to public officials. NOTE – Reg. 226.4(e) requires that certain fees, such as the title and license fees, be “itemized and disclosed”. To comply with this requirement the title and license fees should be shown either as an aggregate amount on line H-13 or separately on the lines at H-18 and H-19. This contract assumes that all title and license fees are financed.

H-14 Fill in on line H-14 the aggregate amount of all insurance premiums that are being financed. CAUTION – Fill in line H-14 only if (a) you have financed the insurance premiums, and (b) you are entitled to exclude the insurance premiums from the finance charge.

H-15 Enter on line H-15 the name of the entity being paid for any service contract if, but only if, such payment is financed. See J-1.

H-16 If line H-15 is filled in, fill in on line H-16 the amount being paid for the service contract.


H-17 Fill in on line H-17 the amount of any delivery and handling fee you are being paid if, but only if, it is being financed.

H-18 Enter on the H-18 lines the names(s) of the recipient(s) of any other charges and fees if, but only if, they are being financed.

H-19 Enter on the H-19 lines the amounts of any other charges and fees if, but only if, they are being financed.

H-20 Add the amounts on lines H-12 through H-19 and enter the result on line H-20.

H-21 Fill in on line H-21 the amount of any prepaid finance charge.

H-22 Add the amounts on lines H-11 and H-20, subtract from the total the amount on line H-21, and enter the result on line H-22. This is the amount financed and should be the same as the amount on line B-3.

PART I – INSURANCE DISCLOSURES I-1 Check the appropriate box to indicate the credit life insurance, if any, the buyer(s) have

chosen to purchase. Check the box in front of “Single” if single coverage has been chosen. Check the box in front of “Joint” if joint coverage has been chosen. Check the box in front of “None” if the buyer(s) have chosen not to purchase any credit life insurance coverage.

I-2 Fill in on line I-2 the premium for any credit life insurance the buyer(s) have chosen to purchase.

I-3 Fill in on line I-3 the term of any credit life insurance the buyer(s) have chosen to purchase.

I-4 Fill in on line I-4 the name(s) of the insured(s) covered by any credit life insurance the buyer(s) have chosen to purchase.

I-5 Check the appropriate box to indicate the credit disability insurance, if any, the buyer(s) have chosen to purchase. Check the box in front of “Single” if single coverage has been chosen. Check the box in front of “Joint” if joint coverage has been chosen. Check the box in front of “None” if the buyer(s) have chosen not to purchase any credit disability insurance coverage.

I-6 Fill in on line I-6 the premium for any credit disability insurance the buyer(s) have chosen to purchase.

I-7 Fill in on line I-7 the term of any credit disability insurance the buyer(s) have chosen to purchase.

I-8 Fill in on line I-8 the name(s) of the insured(s) covered by any credit disability insurance the buyer(s) have chosen to purchase.

I-9 Have the buyer(s) sign confirming their choices on lines I-1 through I-8. The buyer(s) should sign whether or not they have chosen to purchase credit life insurance and/or credit disability insurance.


I-10 Fill in at I-10 the date(s) of birth of the buyer(s) signing at I-9.

I-11 Type in at I-11 the name(s) of the buyer(s) signing at I-9.

I-12 Fill in on line I-12 the maximum collision coverage deductable that you allow. This should be filled in whether the buyer purchases the coverage through you or someone else.

I-13 Fill in on line I-13 the amount the buyer will pay for the property insurance if the buyer purchases it from or through the seller.

I-14 Fill in on line I-14 the term of the coverage for the premium disclosed on line I-13.

I-15 Check this box if the coverage for the premium disclosed on line I-13 includes collision coverage.

I-16 Fill in on line I-16 the amount of the deductible for any collision coverage provided for the premium disclosed on line I-13.

I-17 Fill in on line I-17 the portion of the premium disclosed on line I-13 that is for collision coverage.

I-18 Check this box if the coverage for the premium disclosed on line I-13 includes comprehensive coverage.

I-19 Fill in on line I-19 the amount of the deductible for any comprehensive coverage provided for the premium disclosed on line I-13.

I-20 Fill in on line I-20 the portion of the premium disclosed on line I-13 that is for comprehensive coverage.

I-21 Check this box if the coverage for the premium disclosed on line I-13 includes fire-theft and combined additional coverage.

I-22 Fill in on line I-22 the portion of the premium disclosed on line I-13 that is for fire-theft and combined additional coverage.

I-23 Check this box if the coverage for the premium disclosed on line I-13 includes any other coverage.

I-24 Fill in on line I-24 a description of any other coverage included for the premium disclosed on I-13.

I-25 Fill in on line I-25 the portion of the premium disclosed on line I-13 that is for the other coverage.

I-26 Check this box to require the buyer to purchase single-interest insurance as a part of the transaction.

I-27 Fill in on line I-27 the amount the buyer will pay for single-interest insurance if the buyer purchases it from or through the seller.

I-28 Fill in on line I-28 the term of the coverage for the premium disclosed on line I-27.


PART J – ADDITIONAL PROTECTIONS J-1 Check this box if the buyer is purchasing a service contract.

J-2 Fill in on line J-2 the term of the service contract.

J-3 Fill in on line J-3 the price of the service contract.

J-4 Fill in on line J-4 the coverage limits of the service contract.

J-5 Check this box if the buyer is purchasing gap waiver or gap coverage.

J-6 Fill in on line J-6 the term of the gap waiver or gap coverage.

J-7 Fill in on line J-7 the price of the gap waiver or gap coverage.

J-8 Fill in on line J-8 the coverage limits of the gap waiver or gap coverage.

J-9 Check this box if the buyer is purchasing other additional protection.

J-10 Fill in on line J-10 a description of the other additional protection.

J-11 Fill in on line J-11 the term of the other additional protection.

J-12 Fill in on line J-12 the price of the other additional protection.

J-13 Fill in on line J-13 the coverage limits of the other additional protection.

J-14 Have the buyer(s) sign here if, but only if, they are purchasing a service contract, gap waiver or gap coverage, or other additional protection.

J-15 Fill in the date of the buyer(s)’ J-14 signature(s).

J-16 Type in at J-16 the name(s) of the buyer(s) signing at J-14.

PART K – THIRD PARTY AGREEMENT K-1 If a third party has an interest in the collateral securing the contract, but does not promise

to pay the contract, have the third party sign here. (Note: If the contract is printed on “no carbon required” paper, this signature may not automatically transfer to all copies.)

K-2 Fill in the date of the third party’s signature.

K-3 Print the name of the third party.

PART L - SIGNATURES L-1 Have the buyer(s) sign here to indicate that there are no unwritten agreements.


L-2 Fill in the date of the buyer(s)’ L-1 signature(s).

L-3 Print the buyer(s)’ name(s) below their signature(s).

L-4 Have the buyer(s) sign here to agree to the terms of the contract and to acknowledge receipt of a copy and having had a chance to read it before signing.

L-5 Fill in the date of the buyer(s)’ L-4 signature(s).

L-6 Print the buyer(s)’ name(s) below their signature(s).

L-7 The seller should sign here. CAUTION: Be sure that you comply with any Federal Regulation B or state law requirement for more than one signature on your part, whether or not the buyer is a consumer.

L-8 Fill in the date of the seller’s signature.

L-9 Print the name of the person signing as or for the seller.


© Wolters Kluwer Financial Services Form PM-RSSIMV-LF 9/27/2010

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