Chapter 815 - Business Transactions - Motor Vehicle Retail Installment Sales Act.

(815 ILCS 375/1) (from Ch.121 1/2, par. 561)
Sec. 1. This Act may be cited as the Motor Vehicle Retail Installment Sales Act.
(Source: Laws 1967, p. 2163.)

(815 ILCS 375/2) (from Ch.121 1/2, par. 562)
Sec. 2. For the purposes of this Act, unless the context otherwise requires, the terms specified in the following Sections preceding Section 3 have the meanings ascribed to them in those Sections.
(Source: P.A. 90-437, eff. 1-1-98.)

    (815 ILCS 375/2.1) (from Ch.121 1/2, par. 562.1)
    Sec. 2.1.
    "Motor vehicle" means a motor vehicle as defined in The Illinois Vehicle Code but does not include bicycles, motorcycles, motor scooters, snowmobiles, trailers and farm equipment.
(Source: P. A. 77-1167.)

(815 ILCS 375/2.2) (from Ch.121 1/2, par. 562.2)
Sec. 2.2. "Retail buyer" or "buyer" means a person who buys a motor vehicle from a retail seller, primarily for personal, family, household or agricultural purposes in a retail installment transaction, but does not include a buyer for use in business (not including farming or a profession).
(Source: P. A. 76-1781.)

(815 ILCS 375/2.3) (from Ch.121 1/2, par. 562.3)
Sec. 2.3. "Retail seller" or "seller" means a person engaged in the business of selling motor vehicles to retail buyers in retail installment transactions.
(Source: Laws 1967, p. 2163.)

(815 ILCS 375/2.4) (from Ch.121 1/2, par. 562.4)
Sec. 2.4. "Retail installment transaction" means a credit sale of a motor vehicle by a retail seller to a retail buyer for a deferred payment price payable in one or more installments.
(Source: P. A. 76-1781.)

(815 ILCS 375/2.5) (from Ch.121 1/2, par. 562.5)
Sec. 2.5. "Retail Installment contract", "installment contract" or "contract" means an instrument or instruments prescribing the terms of a retail installment transaction and entered into in this State.
(Source: P.A. 90-437, eff. 1-1-98.)

(815 ILCS 375/2.6) (from Ch.121 1/2, par. 562.6)
Sec. 2.6. "Cash sale price" means the price stated in a retail installment contract for which the seller in good faith and in the regular course of business would have sold to the buyer, and the buyer would have bought from the seller, the motor vehicle if the sale had been a sale for cash. The cash sale price may include any taxes, registration, certificate of title, license, and cash sales prices for accessories and their installation and for delivering, servicing, repairing or improving the motor vehicle.
(Source: Laws 1967, p. 2163.)

(815 ILCS 375/2.7) (from Ch.121 1/2, par. 562.7)
Sec. 2.7. "Official fees" means the taxes and fees prescribed by law that actually are, or will be, paid to public officials for determining the existence of, or for perfecting, releasing, or satisfying a security interest.
(Source: P.A. 90-437, eff. 1-1-98.)

(815 ILCS 375/2.8) (from Ch.121 1/2, par. 562.8)
Sec. 2.8. "Amount financed" means the cash sale price of the motor vehicle plus all other charges individually itemized, which are included in the amount financed, including the amount actually 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 property traded in, but which are not a part of the finance charge, minus the amount of the buyer's down payment in money or goods.
(Source: P.A. 91-411, eff. 8-6-99.)

    (815 ILCS 375/2.9) (from Ch.121 1/2, par. 562.9)
    Sec. 2.9. "Finance charge" means the sum of all charges payable, directly or indirectly by the buyer and imposed directly or indirectly by the seller as an incident to or as a condition of the extension of credit, whether payable by the buyer, the seller, or any other person on behalf of the buyer to the seller or a third party including any of the following types of charges:
    (1) Interest, time price differential, and any amount payable under a discount or other system of additional charges.
    (2) Service, transaction, activity, or carrying charge.
    (3) Loan fee, points, finder's fee, or similar charge.
    (4) Fee for an appraisal, investigation, or credit report.
    (5) Charges or premiums for credit life, accident, health, or loss of income insurance, written in connection with any credit transaction unless
        (i) the insurance coverage is not required by the

creditor and this fact is clearly and conspicuously disclosed in writing to the customer; and

(ii) any customer desiring such insurance coverage

gives specific dated and separately signed affirmative written indication of such desire after receiving written disclosure to him of the cost of such insurance.

    (6) Charges or premiums for insurance, written in connection with any credit transaction, against loss of or damage to property or against liability arising out of the ownership or use of property, unless a clear, conspicuous, and specific statement in writing is furnished by the creditor to the customer setting forth the cost of the insurance if obtained from or through the creditor and stating that the customer may choose the person through which the insurance is to be obtained.
    (7) Premium or other charge for any other guarantee or insurance protecting the creditor against the customer's default or other credit loss.
    (8) Any charge imposed by a creditor upon another creditor for purchasing or accepting an obligation of a customer if the customer is required to pay any part of that charge in cash, as an addition to the obligation, or as a deduction from the proceeds of the obligation.
    If itemized and disclosed to the customer, any charges of the following types need not be included in the finance charge:
        (1) Fees and charges prescribed by law which

actually are or will be paid to public officials for determining the existence of or for perfecting or releasing or satisfying any security related to the credit transaction.

(2) The premium payable for any insurance in lieu of

perfecting any security interest otherwise required by the creditor in connection with the transaction, if the premium does not exceed the fees and charges described in subparagraph (1) of this paragraph which would otherwise be payable.

(3) Taxes not included in the cash price.
(4) License, certificate of title, and registration

fees imposed by law.

(5) Other charges as authorized by this Act.
A late payment, delinquency, default, reinstatement, or other such charge is not a finance charge if imposed for actual unanticipated late payment, delinquency, default or other such occurrence.
(Source: P.A. 90-437, eff. 1-1-98.)

(815 ILCS 375/2.10) (from Ch. 121 1/2, par. 562.10)
Sec. 2.10. "Deferred payment price" means the total of (1) the cash sale price of the motor vehicle purchased, (2) all other charges individually itemized which are included in the amount financed but which are not a part of the finance charge, and (3) the finance charge.
(Source: P. A. 76-1781.)

(815 ILCS 375/2.11) (from Ch. 121 1/2, par. 562.11)
Sec. 2.11. "Sales finance agency" means a person engaged, in whole or in part, in the business of purchasing or making loans upon the security of retail installment contracts. The term includes, but is not limited to, banks, trust companies, private bankers and industrial bankers authorized to do business and to accept deposits in this State, if so engaged.
(Source: P.A. 90-437, eff. 1-1-98.)

(815 ILCS 375/2.12) (from Ch. 121 1/2, par. 562.12)
Sec. 2.12. "Holder" of a retail installment contract means the retail seller of the motor vehicle under the installment contract or sales finance agency or other assignee which purchases or makes a loan upon the security of the retail installment contract.
(Source: P.A. 90-437, eff. 1-1-98.)

(815 ILCS 375/2.13) (from Ch. 121 1/2, par. 562.13)
Sec. 2.13. "Annual percentage rate" means the nominal annual percentage rate of finance charge determined in accordance with the actuarial method of computation with an accuracy at least to the nearest 1/4 of 1%; or at the option of the seller, by application of the United States rule so that it may be disclosed with an accuracy at least to the nearest 1/4 of 1%.
(Source: P.A. 76-1781.)

(815 ILCS 375/2.14)
Sec. 2.14. Truth-in-Lending Act. "Truth-in-Lending Act" means the federal Truth-in-Lending Act, 15 U.S.C. 1601 et seq., and Regulation Z, 12 C.F.R. Part 226.
(Source: P.A. 90-437, eff. 1-1-98.)

(815 ILCS 375/2.15)
Sec. 2.15. Precomputed. A contract is "precomputed" if the debt is expressed as the sum of the amount financed plus the amount of the finance charge computed in advance.
(Source: P.A. 90-437, eff. 1-1-98.)

    (815 ILCS 375/3) (from Ch. 121 1/2, par. 563)
    Sec. 3. (a) Every retail installment contract must be in writing, dated, signed by both the buyer and the seller, and, except as otherwise provided in this Act, completed as to all essential provisions before it is signed by the buyer.
    (b) The printed or typed portion of the contract, other than instructions for completion, must be in size equal to at least 8 point type.
    (c) The contract must contain printed or written in a size equal to at least 10 point bold type:
    (1) Both at the top of the contract and directly above the space reserved for the signature of the buyer, the words "RETAIL INSTALLMENT CONTRACT";
    (2) A specific statement that liability insurance coverage for bodily injury and property damage caused to others is not included, if that is the case; and
    (3) A notice as follows:

"Notice to the buyer.

    1. Do not sign this agreement before you read it or if it contains any blank spaces.
    2. You are entitled to an exact copy of the agreement you sign.
    3. Under the law you have the right, among others, to pay in advance the full amount due and to obtain under certain conditions a partial refund of the finance charge."
(Source: P. A. 76-1781.)

(815 ILCS 375/4) (from Ch. 121 1/2, par. 564)
Sec. 4. Every retail installment contract must contain the names of the seller and of the buyer, the place of business of the seller, the residence of the buyer as specified by the buyer, and a description of the motor vehicle. The contract must clearly state and describe any security taken or retained by the seller. No charge may be made to a buyer under an installment contract for insurance against loss or damage caused to the motor vehicle, for insurance against liability for personal injury or property damage caused to others by reason of ownership or operation of the motor vehicle, for credit life insurance, for credit health and accident insurance or for any other kind of insurance, unless the installment contract separately specifies for each kind of insurance the type of coverage, the term of coverage and the separate, identified charge made therefor.
(Source: P.A. 90-437, eff. 1-1-98.)

    (815 ILCS 375/5) (from Ch. 121 1/2, par. 565)
    Sec. 5. Every retail installment contract shall disclose the following items, as applicable:
    (1) The cash price of the motor vehicle, using the term "cash price".
    (2) The amount of the down payment itemized, as applicable, as down payment in money, using the term "cash down payment", down payment in property, using the term "trade-in" and the sum, using the term "total down payment".
    (3) The difference between the amounts described in subparagraphs (1) and (2) of this paragraph, using the term "unpaid balance of cash price".
    (4) All other charges, individually itemized, which are included in the amount financed but which are not part of the finance charge.
    (5) The sum of the amounts determined under subparagraphs (3) and (4) of this paragraph, using the term "unpaid balance".
    (6) Any finance charge paid separately, in cash or otherwise, directly or indirectly to the seller or with the seller's knowledge to another person, or withheld by the seller from the proceeds of the credit extended and any deposit balance or any investment which the seller requires the buyer to make, maintain, or increase in a specified amount or proportion as a condition to the extension of credit, using as applicable, the terms "prepaid finance charge" and "required deposit balance", and if both are applicable, the total of such items using the term "total prepaid finance charge and required deposit balance".
    (7) The difference between the amounts determined under subparagraphs (5) and (6) of this paragraph, using the term "amount financed".
    (8) The total amount of the finance charge, with description of each amount included, using the term "finance charge".
    (9) The sum of the amounts determined under subparagraphs (1), (4), and (8) of this paragraph, using the term "deferred payment price".
    (10) The finance charge expressed as an annual percentage rate, using the term "annual percentage rate".
    (11) The number, amount, and due dates or periods of payments scheduled to repay the indebtedness and the sum of such payments using the term, "total of payments". If installment payments are stated in terms of a series of scheduled amounts and if the amount of the final installment payment does not exceed the scheduled amount of any preceding installment payment, the maximum number of payments and the amount and date of each payment need not be separately stated and the amount of the scheduled final installment payment may be stated as the remaining unpaid balance. The due date of the first installment payment may be fixed by a calendar date, by reference to the date of the contract or by reference to the date of delivery or installation of the goods.
    (12) The amount, or method of computing the amount, of any default, delinquency, or similar charges payable in the event of late payments.
    (13) A description or identification of the type of any security interest held or to be retained or acquired by the seller in connection with the extension of credit, and a clear identification of the property to which the security interest relates.
    (14) A description of any penalty charge that may be imposed by the seller or his assignee for prepayment of the principal of the obligation with an explanation of the method of computation of such penalty and the conditions under which it may be imposed.
    (15) Identification of the method of computing any unearned portion of the finance charge in the event of prepayment of the obligation and a statement of the amount or method of computation of any charge that may be deducted from the amount of any rebate of such unearned finance charge that will be credited to the obligation or refunded to the buyer.
    (16) The date on which the finance charge begins to accrue if different from the date of the transaction.
    The disclosures required to be given by this Section shall be made clearly, conspicuously and in meaningful sequence. Where the terms "finance charge" and "annual percentage rate" are required to be used, they shall be printed more conspicuously than other terminology required.
    A retail installment contract which complies with the federal Truth in Lending Act, amendments thereto, and any regulations issued or which may be issued thereunder, shall be deemed to be in compliance with the provisions of this Section.
    Notwithstanding any other provision of this Act or any other law of this State, there is no obligation or duty to disclose to an obligor under a retail installment contract: (i) any agreement to sell, assign, or otherwise transfer the contract to a third party for an amount which is equal to, in excess of, or less than the amount financed under the contract; or (ii) that the assignee of the contract or the person who funded it may pay the seller or the person who originated the contract all or a portion of the prepaid finance charges and other fees or a portion of the finance charge to be paid by the buyer over the term of the transaction or any other compensation irrespective of how the compensation is determined.
(Source: P.A. 90-437, eff. 1-1-98.)

    (815 ILCS 375/6) (from Ch. 121 1/2, par. 566)
    Sec. 6. (a) Except as provided under subsections (b) and (c), every retail installment contract must provide for a schedule of periodic installment payments from the due date of the first installment payment to the date of the final maturity of the contract.
    (b) Retail installment contracts may provide for balloon-note financing. For the purpose of this Section, balloon-note financing shall mean the manner of purchase whereby a consumer agrees to select and perform, at the conclusion of a pre-determined schedule of installment payments made in periodic or monthly amounts, one of the following options:
        (1) satisfy the balance of the contractual amount

owing;

(2) refinance any balance owing, on the terms

previously agreed upon at the time of executing the retail installment contract; or

(3) surrender the vehicle at such time and manner

agreed upon at the time of executing the retail installment contract.

(c) Retail installment contracts may provide for deferred payment of a down payment provided any deferred portion of a down payment is payable not later than 10 days prior to the due date of the first regularly scheduled payment and is not subject to a finance charge.
(d) Retail installment contracts may be precomputed or interest bearing.
(Source: P.A. 90-437, eff. 1-1-98.)

(815 ILCS 375/7) (from Ch. 121 1/2, par. 567)
Sec. 7. Notwithstanding the provisions of any retail installment contract to the contrary, the buyer may prepay the contract in full, whether by payment in cash, extension, renewal or otherwise, at any time before maturity, and if he does so shall receive a refund credit thereon for that prepayment. The amount of refund credit shall represent at least as great a proportion of the finance charge less an acquisition cost of $25, as the sum of the periodical time balances beginning with the next payment period bears to the sum of all the periodical time balances under the schedule of installment payments in the contract. In those instances where a buyer's overpayment requires the refund credit to be given through the issuance of a negotiable instrument by the holder, no refund credit need be made if the amount of refund credit is less than $5, provided that a buyer may obtain a cash refund at the seller's or holder's location. In all other cases where the buyer's prepayment permits the refund credit to be given to the buyer as a credit on the buyer's account, no refund credit need be made if the amount of refund credit is less than $1.
(Source: P.A. 90-437, eff. 1-1-98.)

    (815 ILCS 375/8) (from Ch. 121 1/2, par. 568)
    Sec. 8. (a) A seller under a retail installment contract may require insurance against substantial risk of loss of or damage to the motor vehicle, protecting the seller or holder as well as the buyer, and may, if the buyer elects, include therefor in the contract an amount not exceeding the premiums chargeable for such insurance in accordance with rate filings made with the Director of Insurance. No seller or holder may require as a condition precedent to, or as a part of, a retail installment transaction that such insurance be purchased from or through the seller or holder, or any employee, affiliate, or associate of seller or holder. A seller under a retail installment contract may not require other insurance; but if the buyer voluntarily contracts therefor, the seller may then include in the contract an amount for that other insurance not exceeding the premiums paid or payable by the seller or holder. In those transactions where the buyer elects to select the insurance company, broker or agent for the purpose of obtaining insurance required by the holder under this Section, the buyer must, on or before the date when buyer takes possession of the motor vehicle, furnish the holder with satisfactory evidence of insurance in a company acceptable to the seller or holder.
    (b) If the obligor fails to furnish evidence that he has procured insurance on the property, the licensee may purchase substitute insurance that may be substantially equivalent to or more limited than coverage the obligor is required to maintain. Such insurance must comply with the Collateral Protection Act.
(Source: P.A. 90-437, eff. 1-1-98.)

(815 ILCS 375/9) (from Ch. 121 1/2, par. 569)
Sec. 9. The seller may not decline existing required insurance and must afford the buyer the privilege of purchasing any required insurance from an insurance company authorized to do business in this State, from or through any broker or agent selected by the buyer, if the insurance company is approved by the holder and satisfactory evidence of binding coverage is furnished the seller or holder. Such approval may not be arbitrarily or unreasonably withheld by the holder. All insurance which is purchased by the seller or holder and for which an amount is included in a contract must be written by an insurance company authorized to do business in the State. The holder of a contract which includes an amount for insurance purchased by the seller or holder must, within 30 days after the date of the contract, cause to be sent to the buyer the policies or certificates of insurance clearly setting forth the amount of the premium, the types of insurance, the coverages and all the terms, exceptions, limitations, restrictions and conditions of the insurance or, in respect to group credit life insurance and credit accident and health insurance, a notice or statement for that insurance clearly setting forth the name of the insurer, the identity of the insured buyer by name or otherwise and a description of the coverage. If, however, the holder or seller is unable to obtain insurance for the buyer within a reasonable time, the holder or seller shall notify the buyer by certified mail of this fact, and 10 days after this notification the seller or holder of the contract shall cease to be liable for the insurance except for the credit or refund to the buyer of the premiums included in the contract.
(Source: P.A. 90-437, eff. 1-1-98.)

(815 ILCS 375/9.01) (from Ch. 121 1/2, par. 569.01)
Sec. 9.01. Credit life insurance and credit accident and health insurance issued in connection with a retail installment contract or retail charge agreement and any charge therefor made to the buyer, must comply with Article IX 1/2 of the "Illinois Insurance Code", approved June 29, 1937, as now or hereafter amended, and all lawful requirements of the Director of Insurance related thereto.
(Source: Laws 1967, p. 2163.)

    (815 ILCS 375/9.02) (from Ch. 121 1/2, par. 569.02)
    Sec. 9.02. In any situation in which a person has purchased a motor vehicle under an installment sales contract and has purchased credit life or credit disability insurance with such contract, the installment sales contract must include a notice containing the following information:
    (1) IF YOU HAVE PURCHASED EITHER CREDIT LIFE OR CREDIT DISABILITY INSURANCE, OR BOTH, TO GUARANTEE PAYMENTS BEING MADE IN CASE OF YOUR DEATH OR DISABILITY, ON YOUR VEHICLE PURCHASED UNDER AN INSTALLMENT SALES CONTRACT, YOU MAY BE ENTITLED TO A PARTIAL REFUND OF YOUR PREMIUM IF YOU PAY OFF YOUR INSTALLMENT LOAN EARLY.
    (2) IN CASE OF EARLY COMPLETE PAYMENT OF YOUR LOAN, YOU SHOULD CONTACT THE SELLER OF YOUR CREDIT LIFE OR CREDIT DISABILITY INSURANCE TO SEE IF A REFUND IS DUE. IF YOUR VEHICLE DEALER FINANCED YOUR LOAN, THE SELLER OF YOUR CREDIT LIFE OR CREDIT DISABILITY INSURANCE IS YOUR VEHICLE DEALER.
    The above provisions shall be in large block print at least 1/8" in height.
    The notice form shall also be captioned: "NOTICE OF POSSIBLE REFUND OF CREDIT LIFE OR DISABILITY INSURANCE PREMIUM."
    The willful failure to provide such a notice shall subject the insurance seller to liability to the purchaser for 3 times the amount of refund due or $100, whichever is greater.
(Source: P.A. 90-437, eff. 1-1-98.)