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The Florida Statutes

The 2023 Florida Statutes (including Special Session C)

Chapter 520
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F.S. 520.085
520.085 Simple-interest contracts.
(1) A retail installment contract under The Motor Vehicle Retail Sales Finance Act may provide that the rate of finance charge be calculated on a simple-interest basis subject to the following provisions:
(a) Instead of a finance charge computed on the amount financed as determined under s. 520.07(2), the seller may compute the finance charge at a simple-interest rate equivalent to the finance charge permitted by s. 520.08 on the unpaid balance as it changes from time to time or by any other method. For the purposes of this section, the class of motor vehicle shall be determined at the time of execution of the retail installment contract.
(b) The language in s. 520.08(2) which provides that the finance charge may be computed on the basis of a full month for any fractional-month period in excess of 10 days shall not be applicable to a simple-interest contract.
(c) The provisions of s. 520.09 which prescribe a refund credit upon prepayment in full before maturity of the unpaid balance of a retail installment contract shall not be applicable to a simple-interest contract. However, the lender may impose an acquisition charge, not to exceed $75, for services performed on behalf of the borrower for processing the retail installment contract if the contract is paid in full within 6 months after the effective date of the contract.
(d) In the event the unpaid balance of a retail installment contract is extended, deferred, renewed, or restated, the holder may compute the refinance charge in accordance with the provisions of this section.
(e) Notwithstanding any provisions of The Motor Vehicle Retail Sales Finance Act or any other law to the contrary, the finance charge percentage rate included in a retail installment sale contract representing the sale of a motor vehicle primarily for business or commercial use may vary, but no higher than the limits set forth in s. 520.08, during the term of the contract pursuant to a formula or index set forth therein (such as a prime rate or commercial paper rate quoted by one or more banking institutions or the highest prime rate reported effective on the date in question by The Wall Street Journal) that is made readily available to and verifiable by the buyer and is beyond the control of the holder of the contract. For the purpose of disclosing the amount of finance charge and time balance and setting forth a payment schedule of equal successive monthly installments, such amounts may be calculated using the finance charge percentage rate applicable to the transaction as of the date of execution of the contract, notwithstanding the fact that such finance charge percentage may increase or decrease over the term of the contract according to a formula or index set forth in the contract.
(2) The holder of a simple-interest contract, upon the request of the buyer, may defer the scheduled due date of all or any part of any installment payment, and may collect a $15 fee for such deferment. The holder may also require the buyer to extend any insurance coverage required by the simple-interest contract, or require the buyer to reimburse the holder for any costs incurred by the holder for extending such coverage. With the buyer’s approval, the holder may extend any optional insurance coverage purchased in connection with the simple-interest contract and may charge the buyer for the costs of extending such optional insurance. A holder may not collect the $15 deferment fee unless this deferment option was provided for in the simple-interest contract. The holder shall disclose in the simple-interest contract and any offer to exercise the deferment option that, in addition to the $15 deferment fee and the costs of extending required or optional insurance, the buyer will also be required to pay additional finance charges as a result of exercising the deferment option.
History.s. 1, ch. 85-93; s. 1, ch. 86-286; ss. 6, 35, 36, ch. 90-103; s. 1, ch. 91-91; s. 4, ch. 91-429; s. 9, ch. 99-164.