Kentucky Statutes 190.100 – Installment contract
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(1) (a) Every retail installment contract shall:
1. Be in writing in at least eight (8) point type;
2. Contain all the agreements of the parties;
3. Be signed by the retail buyer; and
4. Require a copy thereof to be furnished to the retail buyer at the time of the execution of the contract.
(b) A retail installment contract need not appear on a single page and a contract that includes a provision incorporating agreements that appear after the buyer’s signature, including without limitation, terms, and conditions on the back or on subsequent pages, shall be deemed in compliance with KRS § 446.060(1).
(c) No provisions for confession of judgment, power of attorney therefor, or wage assignment contained in any retail installment contract shall be valid or enforceable.
(d) The holder of a retail installment contract may collect a delinquency and collection charge on each installment in arrears for a period not less than ten (10) days in an amount not in excess of five percent (5%) of each installment or fifteen dollars ($15), whichever is greater. In addition to such delinquency and collection charge, the retail installment contract may provide for the payment of reasonable attorneys’ fees where such contract is referred to an attorney not a salaried employee of the holder of the contract for collection, plus the court costs.
(e) Unless notice has been given to the retail buyer of actual or intended assignment of a retail installment contract, payment thereunder or tender thereof made by the retail buyer to the last known holder of such contract shall be binding upon all subsequent holders or assignees.
(f) Upon written request from the retail buyer, the holder of the retail installment contract shall give or forward to the retail buyer a written statement of the total amount unpaid under such contract. A retail buyer shall be given a written receipt for any payment when made in cash.
(2) The retail installment contract shall contain the following:
(a) The cash sale price of the motor vehicle which is the subject matter of the retail installment sale;
(b) The amount of the retail buyer’s down payment, whether made in money or goods, or partly in money or partly in goods;
(c) The difference between paragraphs (a) and (b) of this subsection;
(d) 1. Amount, if any, included for insurance and other benefits; and
2. Types of coverage and benefits;
(e) Official fees as defined in KRS § 190.090;
(f) Any amounts eligible for inclusion in the cash sale price as defined in KRS
190.090 that the seller elects to separately itemize; and
(g) Principal balance, which is the sum of paragraphs (c), (d), and (e) of this subsection.
(3) A retail installment contract is deemed in compliance with subsection (2) of this section if it satisfies the requirements of the Truth in Lending Act that would apply to a retail installment contract within the Truth in Lending Act’s scope, regardless of whether the Truth in Lending Act would apply to the retail installment sale at issue.
(4) The amount, if any, included for insurance, shall not exceed the premiums chargeable in accordance with applicable rate filings made with the commissioner of insurance. Every retail seller or sales finance company, if insurance on the motor vehicle is included in a retail installment contract shall within thirty (30) days after execution of the retail installment contract send or cause to be sent to the retail buyer a policy or policies or certificate of insurance, which insurance shall be written by a company authorized to do business in this state, clearly setting forth the amount of the premium, the kind or kinds of insurance and the scope of the coverage and all the terms, exceptions, limitations, restrictions and conditions of the contract or contracts of the insurance. The buyer of a motor vehicle under a retail installment contract shall have the privilege of purchasing such insurance from an agent or broker of his own selection and of selecting an insurance company acceptable to the seller; provided, however, that the inclusion of the insurance premium in the retail installment contract when the buyer selects the agent, broker or company, shall be optional with the seller. If any such policy is canceled, the unearned insurance premium refund received by the holder of the contract shall be credited to the final maturing installments of the retail installment contract. For purposes of this subsection, single interest insurance insuring the retail seller or sales finance company shall not be considered insurance on the motor vehicle. Neither a copy of the policy nor a certificate of insurance of this type of insurance shall be sent to the retail buyer.
(5) Any sales finance company hereunder may purchase or acquire from any retail seller any retail installment contract on such terms and conditions as may be agreed upon between them. No filing of the assignment, no notice to the retail buyer of the assignment, and no requirement that the retail seller shall be deprived of dominion over the payments thereunder or the goods covered thereby if repossessed by the retail seller shall be necessary to the validity of a written assignment of a retail installment contract as against creditors, subsequent purchasers, pledgees, mortgagees, and lien claimants of the retail seller.
(6) An acknowledgment in the body of the retail installment contract by the retail buyer of the delivery of a copy thereof shall be conclusive proof of delivery in any action or proceeding by or against any assignee of a retail installment contract.
(7) (a) A “debt cancellation agreement” is a written provision in a retail installment contract, or separate addendum thereto, which provides for cancellation of all or part of an obligation of the buyer or obligor upon the occurrence of a specified event.
(b) In accordance with subsection (2)(d) of this section, a debt cancellation agreement shall be itemized by type on the retail installment contract and
considered an “other benefit” for which the seller, sales finance company, or other holder may charge the buyer or obligor.
(c) A debt cancellation agreement shall not be considered a contract of, or for, insurance.
Effective: July 12, 2012
History: Amended 2012 Ky. Acts ch. 96, sec. 2, effective July 12, 2012. — Amended
2010 Ky. Acts ch. 24, sec. 240, effective July 15, 2010. — Amended 2008 Ky. Acts ch. 68, sec. 1, effective July 15, 2008. — Amended 1992 Ky. Acts ch. 384, sec. 1, effective July 14, 1992. — Amended 1984 Ky. Acts ch. 391, sec. 2, effective July 13,
1984. — Created 1956 Ky. Acts ch. 105, sec. 2, effective July 1, 1956.
1. Be in writing in at least eight (8) point type;
Terms Used In Kentucky Statutes 190.100
- Action: includes all proceedings in any court of this state. See Kentucky Statutes 446.010
- Attorney: means attorney-at-law. See Kentucky Statutes 446.010
- Commissioner: means the commissioner of the department. See Kentucky Statutes 190.010
- Company: may extend and be applied to any corporation, company, person, partnership, joint stock company, or association. See Kentucky Statutes 446.010
- Contract: A legal written agreement that becomes binding when signed.
- Lien: A claim against real or personal property in satisfaction of a debt.
- Motor vehicle: means every vehicle intended primarily for use and operation on the public highways that is self-propelled, including low-speed motor vehicles as defined in KRS §. See Kentucky Statutes 190.010
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Power of attorney: A written instrument which authorizes one person to act as another's agent or attorney. The power of attorney may be for a definite, specific act, or it may be general in nature. The terms of the written power of attorney may specify when it will expire. If not, the power of attorney usually expires when the person granting it dies. Source: OCC
- Sale: means the issuance, transfer, agreement for transfer, exchange, lease, pledge, hypothecation, mortgage in any form, whether by transfer in trust or otherwise, of any motor vehicle or interest in it, or of any franchise related to it, as well as any option, subscription, other contract, or solicitation looking to a sale, offer to attempt to sell in any form, whether spoken or written. See Kentucky Statutes 190.010
- State: when applied to a part of the United States, includes territories, outlying possessions, and the District of Columbia. See Kentucky Statutes 446.010
- Truth in Lending Act: The Truth in Lending Act is a federal law that requires lenders to provide standardized information so that borrowers can compare loan terms. In general, lenders must provide information on Source: OCC
2. Contain all the agreements of the parties;
3. Be signed by the retail buyer; and
4. Require a copy thereof to be furnished to the retail buyer at the time of the execution of the contract.
(b) A retail installment contract need not appear on a single page and a contract that includes a provision incorporating agreements that appear after the buyer’s signature, including without limitation, terms, and conditions on the back or on subsequent pages, shall be deemed in compliance with KRS § 446.060(1).
(c) No provisions for confession of judgment, power of attorney therefor, or wage assignment contained in any retail installment contract shall be valid or enforceable.
(d) The holder of a retail installment contract may collect a delinquency and collection charge on each installment in arrears for a period not less than ten (10) days in an amount not in excess of five percent (5%) of each installment or fifteen dollars ($15), whichever is greater. In addition to such delinquency and collection charge, the retail installment contract may provide for the payment of reasonable attorneys’ fees where such contract is referred to an attorney not a salaried employee of the holder of the contract for collection, plus the court costs.
(e) Unless notice has been given to the retail buyer of actual or intended assignment of a retail installment contract, payment thereunder or tender thereof made by the retail buyer to the last known holder of such contract shall be binding upon all subsequent holders or assignees.
(f) Upon written request from the retail buyer, the holder of the retail installment contract shall give or forward to the retail buyer a written statement of the total amount unpaid under such contract. A retail buyer shall be given a written receipt for any payment when made in cash.
(2) The retail installment contract shall contain the following:
(a) The cash sale price of the motor vehicle which is the subject matter of the retail installment sale;
(b) The amount of the retail buyer’s down payment, whether made in money or goods, or partly in money or partly in goods;
(c) The difference between paragraphs (a) and (b) of this subsection;
(d) 1. Amount, if any, included for insurance and other benefits; and
2. Types of coverage and benefits;
(e) Official fees as defined in KRS § 190.090;
(f) Any amounts eligible for inclusion in the cash sale price as defined in KRS
190.090 that the seller elects to separately itemize; and
(g) Principal balance, which is the sum of paragraphs (c), (d), and (e) of this subsection.
(3) A retail installment contract is deemed in compliance with subsection (2) of this section if it satisfies the requirements of the Truth in Lending Act that would apply to a retail installment contract within the Truth in Lending Act’s scope, regardless of whether the Truth in Lending Act would apply to the retail installment sale at issue.
(4) The amount, if any, included for insurance, shall not exceed the premiums chargeable in accordance with applicable rate filings made with the commissioner of insurance. Every retail seller or sales finance company, if insurance on the motor vehicle is included in a retail installment contract shall within thirty (30) days after execution of the retail installment contract send or cause to be sent to the retail buyer a policy or policies or certificate of insurance, which insurance shall be written by a company authorized to do business in this state, clearly setting forth the amount of the premium, the kind or kinds of insurance and the scope of the coverage and all the terms, exceptions, limitations, restrictions and conditions of the contract or contracts of the insurance. The buyer of a motor vehicle under a retail installment contract shall have the privilege of purchasing such insurance from an agent or broker of his own selection and of selecting an insurance company acceptable to the seller; provided, however, that the inclusion of the insurance premium in the retail installment contract when the buyer selects the agent, broker or company, shall be optional with the seller. If any such policy is canceled, the unearned insurance premium refund received by the holder of the contract shall be credited to the final maturing installments of the retail installment contract. For purposes of this subsection, single interest insurance insuring the retail seller or sales finance company shall not be considered insurance on the motor vehicle. Neither a copy of the policy nor a certificate of insurance of this type of insurance shall be sent to the retail buyer.
(5) Any sales finance company hereunder may purchase or acquire from any retail seller any retail installment contract on such terms and conditions as may be agreed upon between them. No filing of the assignment, no notice to the retail buyer of the assignment, and no requirement that the retail seller shall be deprived of dominion over the payments thereunder or the goods covered thereby if repossessed by the retail seller shall be necessary to the validity of a written assignment of a retail installment contract as against creditors, subsequent purchasers, pledgees, mortgagees, and lien claimants of the retail seller.
(6) An acknowledgment in the body of the retail installment contract by the retail buyer of the delivery of a copy thereof shall be conclusive proof of delivery in any action or proceeding by or against any assignee of a retail installment contract.
(7) (a) A “debt cancellation agreement” is a written provision in a retail installment contract, or separate addendum thereto, which provides for cancellation of all or part of an obligation of the buyer or obligor upon the occurrence of a specified event.
(b) In accordance with subsection (2)(d) of this section, a debt cancellation agreement shall be itemized by type on the retail installment contract and
considered an “other benefit” for which the seller, sales finance company, or other holder may charge the buyer or obligor.
(c) A debt cancellation agreement shall not be considered a contract of, or for, insurance.
Effective: July 12, 2012
History: Amended 2012 Ky. Acts ch. 96, sec. 2, effective July 12, 2012. — Amended
2010 Ky. Acts ch. 24, sec. 240, effective July 15, 2010. — Amended 2008 Ky. Acts ch. 68, sec. 1, effective July 15, 2008. — Amended 1992 Ky. Acts ch. 384, sec. 1, effective July 14, 1992. — Amended 1984 Ky. Acts ch. 391, sec. 2, effective July 13,
1984. — Created 1956 Ky. Acts ch. 105, sec. 2, effective July 1, 1956.