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.

REMINDER: License renewals are due December 31. Please see the link below for renewal information.