§ 2351. Definitions
As used in this chapter only, unless the context otherwise requires:
(1) “Motor vehicle” means and is limited to the following:
(A) all vehicles propelled or drawn by power other than muscular power, except when two
or more such vehicles are purchased at the same time;
(B) trailers and semi-trailers, as defined in 23 V.S.A. § 4(40), except when two or more such trailers or semi-trailers are purchased at the same
time; and
(C) mobile home as defined in 10 V.S.A. § 6201.
(2) “Retail buyer” or “buyer” means a person who agrees to buy or buys a motor vehicle
other than principally for the purpose of resale, or other than principally for a
commercial purpose, from a retail seller in a retail installment transaction.
(3) “Retail seller” or “seller” means a person engaged in the business of selling motor
vehicles to retail buyers in retail installment transactions and includes an owner
of a mobile home park who sells mobile homes to residents of the park, whether or
not the sales are the principal business of the park owner.
(4) “Retail installment transaction” or “transaction” means any transaction in which a
retail buyer purchases a motor vehicle from a retail seller under a retail installment
contract for a time sale price consisting of a cash sale price and other amounts as
limited by this chapter and agrees to pay part or all of the price in one or more
deferred installments. The term shall include every transaction wherein the promise
or agreement to pay the deferred balance of such price is made by the retail buyer
to the retail seller notwithstanding the existence or occurrence of any one or more
of the following events:
(A) that the retail seller has arranged or arranges to sell, transfer, or assign the retail
buyer’s obligation;
(B) that the amount of the finance charge is determined by reference to charts or information
furnished by a financing institution;
(C) that the forms of instruments used to evidence the retail installment transaction
are furnished by a financing institution; and
(D) that the credit standing of the retail buyer is or has been evaluated by a financing
institution.
(5) “Retail installment contract” or “contract” means a contract entered into in this
State evidencing a retail installment transaction under which the title to or a lien
or security in the motor vehicle, which is the subject matter of the transaction,
is retained or taken to secure the retail buyer’s obligations. The term includes
a chattel mortgage, conditional sale contract, and a contract in the form of a bailment
or a lease if the bailee or lessee contracts to pay as compensation for use a sum
substantially equivalent to or in excess of the value of the motor vehicle sold, and
it is agreed that the bailee or lessee is bound to become or, for no further or a
merely nominal consideration, has the option of becoming the owner of the motor vehicle
upon full compliance with the provisions of the bailment or lease. The term shall
also include any amendment of the retail installment contract in which the parties
agree to renew, restate, or reschedule the unpaid balance thereof, or to extend the
scheduled due date of all or any part of any installment or installments.
(6) “Cash price” means the minimum price for which the motor vehicle, including accessories,
subject to the retail installment contract or another motor vehicle of like kind and
quality, including similar accessories, may be purchased for cash from the seller
by the buyer.
(7) “Official fees” means the amount of the fees prescribed by law for filing, recording,
or otherwise perfecting a retained title, lien, or other security interests created
in a retail installment transaction.
(8) “Principal balance” means the cash sale price of the motor vehicle plus the amounts,
if any, included in the retail installment contract, if a separate identified charge
is stated therein, for insurance and other benefits and official fees, less the amount
of the buyer’s down payment, if any, in money or goods, or both.
(9) “Finance charge” means the estimated amount to be added to the principal balance to
determine the balance of the buyer’s indebtedness to be paid under a retail installment
contract.
(10) “Sales finance company” means a person engaged in the business of purchasing or otherwise
acquiring from one or more sellers retail installment contracts.
(11) “Holder” means the retail seller of the motor vehicle or the sales finance company
or other assignee if the retail installment contract is purchased or otherwise acquired
by a sales finance company or other assignee.
(12) “Administrator” means the Commissioner of Financial Regulation.
(13) “Person” means an individual, partnership, joint venture, corporation, banking organization,
association, or any other group however organized.
(14) Words of the masculine gender include the feminine and the neuter, and when the sense
so indicates, words of the neuter gender may refer to any gender.
(15) “Commercial purpose” means a purpose related to the production, exhibition, marketing,
transportation, processing, or manufacture of goods or services by any person, where
the cash price of the motor vehicle, exclusive of any finance charges, exceeds the
sum of $20,000.00.
(16) “Commercial lease” means a transfer of the right to possession and use of a motor
vehicle for a term in return for consideration, including leases intended as security,
and where the vehicle is to be used by the lessee primarily for commercial, industrial,
or agricultural use and not for personal, family, or household use. (Added 1961, No. 227, § 1, eff. Jan. 1, 1962; amended 1979, No. 20, §§ 1, 2, eff. April 10, 1979; 1989, No. 122, §§ 2, 3, eff. June 30, 1989; 1989, 1989, No. 225 (Adj. Sess.), § 25(b); 1995, No. 180 (Adj. Sess.), § 38(a); 2003, No. 104 (Adj. Sess.), § 2.)
§§ 2352, 2353. Repealed. 1995, No. 162 (Adj. Sess.), § 39(b), eff. Jan. 1, 1997.
§ 2354. Investigations and complaints; powers of Administrator
(a) The Administrator, if he or she has reasonable cause to believe that any licensee
or other person has violated any of the provisions of this chapter, may make such
investigation as he or she shall deem necessary, and, to the extent necessary for
this purpose, the Administrator or his or her authorized representative may examine
the licensee or any other person and shall have the power to compel the production
of all relevant books, records, and documents.
(b) Any buyer having reason to believe that this chapter has been violated with respect
to this retail installment contract may file with the Administrator a written complaint
setting forth the details of the alleged violation.
(c) The Administrator may issue subpoenas to compel the attendance of witnesses and the
production of books, records, documents, and other evidence before him or her in any
matter over which he or she has jurisdiction, control, or supervision pertaining to
this chapter. The Administrator shall have the power to administer oaths and affirmations
to any person whose testimony is required. (Added 1961, No. 227, § 4, eff. Jan. 1, 1962.)
§ 2355. Requirements and prohibitions as to retail installment contracts
(a) Each retail installment contract shall be in writing, dated, signed by both the buyer
and the seller, and completed as to all essential provisions before it is signed by
the buyer. A retail installment contract need not be contained in a single document.
(b) The printed portion of the retail installment contract, other than instructions for
completion, shall be in a size equal to at least eight-point type. The contract shall
contain substantially the following notice in a size equal to at least 10-point bold
type and shall appear directly above the buyer’s signature:
“NOTICE TO RETAIL BUYER
Do not sign this contract in blank. You are
entitled to a copy of the contract at the time you sign.
Keep it to protect your legal rights.”
(c) A retail installment contract shall also contain, in a size equal to at least 10-point
bold type, a specific statement that liability insurance coverage for bodily injury
and property damage caused to others is not included, if that is the case.
(d) The seller shall deliver to the buyer at the time of the execution of the contract,
and if it contains blank spaces as provided in subsection (j) of this section, mail
to him or her at his or her address shown on the retail installment contract a copy
of the contract as accepted by the seller. Until the seller does so, a buyer who has
not received delivery of the motor vehicle may rescind his or her contract and receive
a refund of all payments made and a return of all goods traded in to the seller on
account of or in contemplation of the contract or, if the goods traded in cannot be
returned, the value thereof. Any acknowledgment by the buyer of delivery of a copy
of the retail installment contract shall be in a size equal to at least 10-point bold
type and shall appear directly above the buyer’s signature.
(e) The retail installment contract shall contain the names of the seller and the buyer,
the place of business of the seller, the residence or other address of the buyer as
specified by the buyer, and a description of the motor vehicle sold or to be sold.
(f)(1) The retail installment contract shall contain the following items:
(A) The cash price of the motor vehicle.
(B) The amount of the buyer’s down payment, if any, specifying the amounts paid in money
and in goods traded in.
(C) The difference between items (A) and (B) of this subdivision.
(D) The amount, if any, paid or to be paid by the seller pursuant to an agreement with
the buyer to discharge a security interest, lien interest, or lease interest on the
traded-in motor vehicle; the amount, if any, for insurance, including the cost of
credit life insurance at a rate authorized by rate schedules then in effect and on
file with the Commissioner of Financial Regulation; the cost, if any, of physical
damage insurance specifying the type or types and the term of coverage; the cost,
if any, for service contracts as defined in 8 V.S.A. § 4247; and the reasonable cost, if any, for a debt protection agreement as set forth in
8 V.S.A. § 10405.
(E) The amount of all official fees, and a separate identified charge shall be shown therefor.
(F) The principal balance, which is the sum of items (C), (D), and (E) of this subsection.
(G) The amount of the finance charge.
(H) The sum of items (F) and (G) of this subsection, which is the balance to be paid by
the buyer to the seller; the number of installments; the amount of each installment
and the due date or period thereof; and notice to the borrower as to the effect of
early or late payments.
(I) The total time price, which is the sum of items (A), (D), (E), and (G) of this subsection.
(J) A disclosure form completed by the automobile dealership containing at least the allowance
for the trade-in, amount owed on the trade-in or lease, cash price, amount financed
on the motor vehicle retail installment contract, the amount financed on the motor
vehicle retail installment contract as a percentage of the cash price of the vehicle,
and signature blocks for the buyer will be provided to the buyer who finances a motor
vehicle utilizing a motor vehicle retail installment sales contract at the dealership.
The unexecuted disclosure form will be provided to the buyer prior to consummation
of the transaction and will be signed by the buyer at the time the buyer signs the
motor vehicle retail installment contract. The disclosure will be on a form prescribed
by the Commissioner on or before July 1, 2006 and as thereafter amended by the Commissioner
by rule.
(2) The items specified in subdivision (1) of this subsection need not be stated in the
sequence or order set forth; additional items may be included but only to explain
the calculations involved in determining the balance to be paid by the buyer as set
forth in this subsection. No other charges shall be made by the seller.
(g) The amount, if any, stated and included in the retail installment contract for insurance
to be purchased by the holder shall not exceed the applicable premiums chargeable
in accordance with filings, if any, with the Department of Financial Regulation.
If the insurance for which the stated amount is included insures the life, safety,
or health of the buyer, or their interest in or their liability because of the motor
vehicle, and is purchased by the holder, the holder shall, within 30 days after the
execution of the retail installment contract, send or cause to be sent to the buyer
a policy or policies of insurance, written by an insurance company authorized to do
business in this State, or a certificate or certificates thereof. The policy or policies
shall set forth all the terms, exceptions, limitations, restrictions, and conditions
of the contract or contracts of insurance and the certificates shall set forth a summary
thereof. The insurance may be purchased by the holder. However, the buyer may purchase
the insurance from an agent or broker of his or her own selection and select an insurance
company acceptable to the holder, which acceptance shall not be arbitrarily or unreasonably
withheld, but in that case the inclusion of the insurance premium in the retail installment
contract shall be optional with the seller. If the insurance is cancelled or the
premium adjusted, any refund of the premium received by the holder shall be credited
to the outstanding principal balance of the contract, except to the extent applied
toward payment for similar insurance protecting the interest of the buyer and the
holder or either of them.
(h)-(i) [Repealed.]
(j) A retail installment contract shall not be signed by any party thereto when it contains
blank spaces of items that are pertinent to the transaction and that should be completed.
However, if delivery of the motor vehicle is not made at the time of the execution
of the contract, the identifying numbers or marks or similar information and the due
date of the first installment may be inserted in the contract after its execution.
(k) Upon written request of the buyer, the holder of a retail installment contract shall
give or forward to the buyer a written statement of the dates and amounts of installment
payments and the total amount unpaid under the contract. A buyer shall be given a
written receipt for any payment when made in cash. One statement or receipt shall
be given the buyer without charge; if any additional statement or receipt is requested
by the buyer, it shall be supplied by the holder at a charge not in excess of $1.00
for each additional statement or receipt so supplied.
(l) A provision in a retail installment contract relieving the seller from liability for
any legal remedies that the buyer may have against the seller shall not be enforceable.
(m) The holder of any retail installment contract may collect a reasonable delinquency
charge if provided for in the contract. In addition, where collection is referred
for payment to an attorney who is not a salaried employee of the holder of the contract,
the contract may provide for the payment of an attorney’s reasonable fee and for court
costs and disbursements and also for actual and reasonable out-of-pocket expenses
incurred after referral in connection with the delinquency, repossession, or foreclosure,
including storage charges, reconditioning expenses, and collection expenses. (Added 1961, No. 227, § 5, eff. Jan. 1, 1962; amended 1979, No. 173 (Adj. Sess.), § 19; 1985, No. 59, § 3; 1989, No. 122, §§ 4, 5, 6, eff. June 30, 1989; 1989, No. 225 (Adj. Sess.), § 25; 1995, No. 180 (Adj. Sess.), § 38; 1997, No. 109 (Adj. Sess.), § 4, eff. Sept. 1, 1998; 2005, No. 70, § 5; 2005, No. 143 (Adj. Sess.), § 1; 2021, No. 20, § 11.)
§ 2355a. Repealed. 1969, No. 118, eff. April 22, 1969.
§ 2356. Repealed. 1979, No. 173 (Adj. Sess.), § 19, eff. April 30, 1980.
§ 2356a. Finance charge limitation and method of calculation
The interest rates for motor vehicle financing shall be that authorized by subdivision 41a(b)(4) of this title, and the method of interest calculation shall be as specified in subsection 41a(d) of this title. (Added 1979, No. 173 (Adj. Sess.), § 15, eff. April 30, 1980; amended 1989, No. 122, § 7, eff. June 30, 1989.)
§ 2357. Prepayment
Notwithstanding the provisions of any retail installment contract to the contrary,
any buyer may prepay it in full at any time before maturity without penalty. (Added 1961, No. 227, § 7, eff. Jan. 1, 1962; amended 1967, No. 58, § 3; 1989, No. 122, § 8, eff. June 30, 1989.)
§ 2358. Refinancing retail installment contracts
(a) The holder of a retail installment contract, upon request by the buyer, may agree
to an amendment thereto to extend the scheduled due date of all or any part of any
installment or installments or to renew, restate, or reschedule the unpaid balance
of the contract.
(b) The amendment to the contract must be confirmed in writing signed by the buyer and
the holder. The writing shall set forth the terms of the amendment and shall either
be delivered or mailed to the buyer at the address as shown on the contract. The
writing together with the original contract and any previous amendments thereto shall
constitute the retail installment contract. (Added 1961, No. 227, § 8, eff. Jan. 1, 1962; amended 1989, No. 122, § 9, eff. June 30, 1989.)
§ 2359. Cases not provided for; scope
This chapter shall not affect or apply to any loans or to the business of making loans
under the laws of this State, nor shall any of the provisions of the loan or interest
statutes of this State affect or apply to any retail installment transaction. Nothing
in this chapter shall be construed to impair or in any way affect any rule of law
applicable to or governing retail installment sales not otherwise subject hereto.
This chapter shall apply exclusively to all retail installment transactions as defined
in section 2351 of this title. This chapter shall not apply to commercial leases. (Added 1961, No. 227, § 9, eff. Jan. 1, 1962; amended 1989, No. 122, § 10, eff. June 30, 1989; 1989, No. 284 (Adj. Sess.), § 2.)
§ 2360. Waiver
No act or agreement of the retail buyer before or at the time of the making of a retail
installment contract shall constitute a valid waiver of any of the provisions of this
chapter. (Added 1961, No. 227, § 10, eff. Jan. 1, 1962.)
§ 2361. Penalties
(a) In case of failure of any person to comply with any of the provisions of this chapter,
such person or any person who acquires a contract or installment account with knowledge
of such noncompliance is barred from recovery of any finance charge or of any delinquency,
collection, deferral, or refinance charge imposed in connection with such contract
or installment account, and the buyer shall have the right to recover from such person
an amount equal to any of such charges paid by the buyer with interest thereon from
the time of payment and all expenses of collection including reasonable attorney’s
fees, in a civil action on this statute.
(b) In any case in which a person willfully violates any provision of this chapter, except
as provided in subsection (c) of this section, the buyer may recover from such person
an amount equal to two times the total of the estimated finance charges and any delinquency,
collection, extension, deferral, or refinance charges imposed, contracted for, or
received, and the seller shall be barred from the recovery of any such charges. The
buyer shall also recover reasonable attorney’s fees as determined by the court.
(c) A person shall not knowingly or willfully make any retail installment contract under
this chapter that directly or indirectly calls for the payment of any finance charges
in excess of the legal rate as set forth in this chapter. A contract violating this
section shall be unenforceable, and a person shall have no right to collect any principal,
finance, or other charges.
(d) Notwithstanding the provisions of this section, any failure to comply with any provision
of the chapter may be corrected by the holder in accordance with the provisions of
this section, provided that a willful violation may not be corrected, and a correction
that will increase the amount owed by the owner or the amount of any payment shall
not be effective unless the buyer concurs in writing to the correction. If a violation
is corrected by the holder in accordance with the provisions of this section, neither
the seller nor the holder shall be subject to any penalty under this section. The
correction shall be made by delivering to the buyer a corrected copy of the contract
within 60 days of the execution of the original contract by the buyer. Any amount
improperly collected from the buyer shall be credited against the indebtedness evidenced
by the contract.
(e) Any person who shall willfully and intentionally violate any provisions of this chapter
shall be fined not more than $100.00 for the first offense. Upon conviction for violating
this section in any transaction entered into or consummated after a first conviction
hereunder, the offender shall be fined not more than $1,000.00 or imprisoned for not
more than one year, or both. (Added 1961, No. 227, § 11, eff. Jan. 1, 1962; amended 1973, No. 185 (Adj. Sess.), § 1; 1989, No. 122, § 11, eff. June 30, 1989.)
§ 2362. Prohibition on discrimination based on sex, sexual orientation, gender identity, marital
status, race, color, religion, national origin, age, or disability
No seller shall discriminate against any buyer or prospective buyer who desires to
establish a retail installment contract because of the sex, sexual orientation, gender
identity, marital status, race, color, religion, national origin, age, or disability
of the buyer. (Added 1973, No. 130 (Adj. Sess.), § 3; amended 1989, No. 122, § 12, eff. June 30, 1989; 1991 No. 135 (Adj. Sess.), § 8; 2007, No. 41, § 11; 2013, No. 96 (Adj. Sess.), § 27.)