Motor Vehicle Time Sales
The law concerning motor vehicle time sales is found in Chapter 365 and covers licensing, rates and refunding. This act is like the retail credit financing act since it requires a license to purchase or otherwise acquire retail contracts secured by motor vehicles. This "third-party paper" is frequently referred to as "indirect loans" or "dealer paper." The typical transaction involves a motor vehicle dealer agreeing to give the buyer the car in exchange for the buyer's promise to make payments. The dealer may then sell the contract. Note that a dealer, without being licensed, may hold and collect his own contracts. However, if the dealer establishes a finance company to which contracts are sold or assigned or if the dealer collects under any name other than that of the dealership, a license is needed (see 20 CSR 1140-4.030). Also note that many others do not need a license: banks, trust companies, consumer loan licensees per §367.100 et seq., or "a person who makes only occasional purchases of" such contracts.
The consumer protection provisions of §§408.551-408.562 do apply. Related regulations are found at 20 CSR 1140-4.020 through 20 CSR 1140-4.040.