INSTALLMENT SALE CONTRACT H.B. 5460 (H-3):
SUMMARY OF BILL
REPORTED FROM COMMITTEE
House Bill 5460 (Substitute H-3 as reported without amendment)
Sponsor: Representative Alabas Farhat
House Committee: Regulatory Reform
Senate Committee: Finance, Insurance, and Consumer Protection
CONTENT
The bill would amend the Motor Vehicles Sales Finance Act to allow an installment sale contract for a new motor vehicle to provide for a series of monthly payments in unequal payment amounts if the amount of any payment did not increase more than 40% from the amount of the first scheduled payment and the amount of each payment under the installment sale contract did not exceed the buyer's maximum payment threshold. The bill also would prohibit an installment seller or sales finance company from charging a fee based solely on the fact that the contract required payments in unequal amounts and a fee for prepayment of unpaid installments.
BRIEF RATIONALE
Current statute requires that car payments for new vehicles be equal in amount. According to testimony, customers and dealers could benefit from unequal payments that adhered to a predetermined schedule as another financing option.
FISCAL IMPACT
The bill would have no fiscal impact on State or local government.
Date Completed: 6-24-24 Analyst: Nathan Leaman
This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.