What Is Retail Installment Contract
3. A Buyer may pay the full balance in advance Any Buyer may pay the outstanding balance of the Instalment Payment Agreement in advance at any time prior to the final due date, even if the Retail Instalment Payment Agreement provides otherwise. §56-1-2(J). The State Retail Ratement Sales Act, §§56-1-1 to -16, and the Federal Truth in Lending Act, 15 U.S.C§1601 et seq., both govern retail rate agreements and retail fee agreements. To protect consumers, both laws require meaningful disclosure of credit terms to borrowers. Meaningful disclosure of credit terms is intended to allow the consumer to “compare different credit terms. and avoid misinformed use of credit. 15 U.S.C. §1601(a).
2. `property` means all personal property, with the exception of motor vehicles, which is mainly used for personal, family or household purposes; The property includes mobile homes, but not if the retail instalment payment contract also covers the property where the mobile home is located. §56-1-1(A). 1. A retail instalment payment contract arises when a customer agrees to purchase goods through instalment payments. Instalment retail contracts are transactions entered into within the meaning of the Truth in Loans Act. For example, a consumer enters into a retail instalment payment agreement when they purchase a device with a payout plan or a car with a loan that has a repayment plan that determines the number and amount of payments. §§56-1-1(H); 56-1-2. 4. Consolidated instalment contracts Sometimes a retail buyer makes subsequent purchases from the seller from whom he purchased goods under a retail instalment payment contract. At the seller`s option, these subsequent purchases can be included and consolidated with the previous retail instalment payment contract.
Under the Retail Sales Act, subsequent purchases are treated as separate instalment contracts, even though they may have been consolidated in the previous contract. §56-1-2(M). If subsequent purchases are consolidated in the previous instalment payment contract, the buyer does not need to conclude a new contract for each subsequent purchase. Rather, it is sufficient for the seller to draw up a written note containing the information on the points listed above for the requirements of a instalment payment contract in the retail trade. §56-1-2(M)(2). Now, you may be thinking, “Consumers usually don`t understand or care about difference, so why should any of us do that?” Well, the reason for this is that there are many smart lawyers who can explain the subtle and less subtle differences between a loan and an installment sale. Many of them represent the interests of these consumers. If serving your installment retail sales as if they were loans is detrimental to consumers, you could have a problem. Let`s focus on one possible trap – the accumulation of interest on a balance after repossession. 1.
Retail Installment Contract Requirements Under the Retail Installment Sales Act A retail instalment payment agreement must be written, dated, signed by the buyer and complied with with respect to certain essential provisions, including: A loan is a transaction between you and a bank or other lender for money when you use the money to purchase a vehicle and agree: repay the balance of the loan plus interest. An installment retail, on the other hand, is a transaction between you and the dealer to purchase a vehicle, where you agree to pay the dealer over time and pay both the value of the vehicle and interest. A merchant could sell the retail instalment purchase agreement to a lender or other party. According to TILA, the Merchant is required to provide the Customer with a copy of the Contract, which must be kept at the time of signing the Installment Purchase Agreement by the Customer, whether or not you wish to incur the debt under these conditions. However, if you change your mind and decide not to sign the contract, a reputable dealer will always give you a copy of the signed contract. Indeed, one of TILA`s goals is the full disclosure of credit terms so that consumers can buy credit in an informed manner. If consumers do not have a copy of the unsigned contract, they will not be able to purchase significant credit. If you decide not to make a transaction or need more time to decide for any reason, you should ask for a copy of the RISC, take it home and inform the merchant later after having time to calm down and make an emotionless decision.
§56-1-2 The retail instalment payment contract does not need to be recorded in a single document. In response to customer demand, retailers are offering new payment options for their products that go beyond simple cash and card transactions. One of those options that is gaining popularity is an agreement that allows customers to split their purchases into several smaller payments, often four. These programs appeal to retailers because they can offer their customers more flexible payment options while receiving full payment in advance. Customers also appreciate the flexibility to take their purchases home before making the full payment. .