Instead of a finance charge computed on the principal amount financed, the seller may charge from time to time a finance charge consisting of interest on the amount of the unpaid principal balance of the contract. In this event, the transaction is subject to this act as modified by the following provisions:
  (a) The number and amount of installment payments required to be stated pursuant to section 13 may be estimated for purposes of this section assuming that each scheduled payment is made on the date it is due and in the scheduled amount.

Terms Used In Michigan Laws 492.141

  • buyer: means a person that buys, hires, or leases a motor vehicle for personal, family, or household use, and not for commercial, business, or agricultural use, under an installment sale contract or a legal successor in interest to that person. See Michigan Laws 492.102
  • contract: means an agreement for the retail sale of a motor vehicle, or that has a similar purpose or effect, under which part or all of the price is payable in 2 or more scheduled payments subsequent to the making of the agreement or under which the obligor undertakes to make 2 or more scheduled payments or deposits that can be used to pay part or all of the purchase price, whether or not the seller has retained a security interest in the motor vehicle or has taken collateral security for the buyer's obligation, and any extension, deferment, renewal, or other revision of that agreement. See Michigan Laws 492.102
  • Contract: A legal written agreement that becomes binding when signed.
  • Finance charge: The total cost of credit a customer must pay on a consumer loan, including interest. The Truth in Lending Act requires disclosure of the finance charge. Source: OCC
  • Finance charge: means that term as defined in section 106 of the truth in lending act, 15 USC 1605. See Michigan Laws 492.102
  • Holder: means a seller or other person that is currently entitled to the rights of a seller under an installment sale contract. See Michigan Laws 492.102
  • Principal amount financed: means the unpaid cash price balance after deducting the down payment, adding the cost of any insurance premiums required or obtained as security for or by reason of the sale of a motor vehicle under an installment sale contract, and adding other costs necessary or incidental to the sale of the motor vehicle under the contract that the seller contracts to pay on behalf of the buyer and for the amount of which the seller agrees to extend credit to the buyer and for which the buyer contracts voluntarily. See Michigan Laws 492.102
  • seller: means a person engaged in the business of selling, offering for sale, hiring, or leasing motor vehicles under installment sale contracts or a legal successor in interest to that person. See Michigan Laws 492.102
  • Time balance: means the sum of the principal amount financed and the finance charge. See Michigan Laws 492.102
  (b) The holder of the contract has the option of deferring interest charges which accrue due to installment payments being received later than the periodic installment due date. The deferred interest charge shall be computed on the basis of additional interest charges accruing for late installment payments and appropriate interest reductions for installment payments made before the due date. On contracts providing for equal monthly installments, if the final installment is more than 105% of a previous installment as a result of the deferred interest charges, the installment buyer shall be given the option to pay the deferred interest charges not less than 25 days after the date the last installment payment is due.
  (c) If the unpaid time balance is prepaid in full, together with all interest incurred to the date of prepayment, the balance of the original finance charge shall be canceled and the finance charge rebate provisions of section 21 do not apply.
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