UCCC Compliance Examination - Jeffrey Kovalski, UCCC Representative

Kovaleski warned that some finance companies, have a box marked on their forms which automatically add GAP to the deal. THIS IS YOUR PROBLEM!!! GAP can never be pre-packed as part of the financing. If it is, you will have to refund that amount. Also, some finance companies add a D&H fee, even if the dealer does not charge D&H. Remember that in Colorado, D&H must be disclosed separately on the Buyers Order and in advertising. For example, Selling price $9,500, D&H $500 - total selling price $10,000. . A D&H on a finance deal must be disclosed as a finance charge, if not you will have to refund. If finance company adds an acquisition fee, the dealer cannot charge the consumer.

Permitted Additional Charges

Filing fees (i.e. $27.20 or $37.20 for 6 page) can be charged only on finance deals - No filing fee can be charged on a cash deal. But if dealer is paying a company to do the title paperwork, they must charge that fee on both cash and finance deals.

D&H - Same amount for all customers

Emission Fees

Late Charges/Repossessions $15 late fee and $25 NSF fee set by statute Debtor must be 10 days late before late fee assessed - but must be assessed before next payment due. No interest can be charged on late fee. After payment 10 days late, Right to Cure Notice must be sent to debtor’s last known address, advising customer of amount of payment and late fee. 20 days must be given in Right to Cure for debtor to cure the default . If hiring a Repossession company and they charge a close fee or investigative fee, that can only be assessed to the debtor if the vehicle is actually repossessed - not if the debtor cures the default. Even after repossession, dealer can work out a payment plan with the debtor. Dealer is allowed to charge fees to get vehicle ready for resale (i.e. new keys, reconditioning). After repossession - send debtor a Letter of Intent showing what is owed, and if not paid, vehicle will be sold in 10 days (break down fees - late fee, NSF fee, repossession fee, and principal) . A dealer can sell vehicle at auction or on lot. If there is a deficiency balance after sale, auditor will not look further if dealer drops balance. If deficiency balance pursued with debtor, or if reported to credit bureau, auditor will look closely . On a voluntary repossession, have customer sign statement - Still give debtor 10-day Letter of Intent before selling.

Kovaleski recommends you review all paperwork the customer signs, including the front and back of your Security Agreements.

Re-Contracts - Once a contract is signed by customer, no changes can be made, you must recontract. Always use current date when recontracting - never back date.

PIC Payments - i.e. $4000 down payment, $2000 up front and balance deferred - Show details on Buyer’s Order - not on finance documents. Remember title must be delivered in 30 days.