Finance License Required (Motor Vehicle Retail Installment Seller)
NOTICE: The information below was obtained directly from the Office of Financial Regulation (OFR) website, Florida Statutes and Florida Administrative Code (Rule). Links are provided so you may access all content on the OFR website.
If RV Dealers do any of the following, they are required to be licensed as Motor Vehicle Retail Installment Sellers:
- Originate the sales contract with the customer, then assign it to a lender that actually provides the financing;
- Provide IN-HOUSE Financing for RVs (such as Buy Here/ Pay Here).
MV: Motor Vehicle Retail Installment Seller – Chapter 520 Part I, Florida Statutes: The license authorizes its holder to offer installment payments to its customers, for the sale of motor vehicles to retail buyers. This license is required by firms that sell and finance automobiles, trucks, trailers, RV’s, motorcycles, and mobile homes.
License is issued for two years at a cost of $175.00. License expires on December 31st of each even-numbered year. New licensure period begins on January 1st of each odd-numbered year.
WHAT YOU DO MAY REQUIRE YOU TO HAVE A FINANCE LICENSE
S. ALLEN MONELLO, D.P.A.
AUTOMOTIVE INDUSTRY CENTER FOR EXCELLENCE, LLC
I am constantly hearing about dealers who find themselves in trouble with the Office of Financial Regulation (OFR), Department of Financial Services, for financing deals without a finance license. Specifically, the dealer should have a Motor Vehicle Retail Installment Sellers License issued by OFR.
First let’s take a look at one of the definitions in Section 520.02(18), Florida Statutes:
(18) “Retail installment transaction” means any transaction evidenced by a retail installment contract entered into between a retail buyer and a seller wherein the retail buyer buys a motor vehicle from the seller at a deferred payment price payable in one or more deferred installments.
Please note that recreational vehicles (RVs) are considered motor vehicles as defined in Section 520.02(10), Florida Statutes, which reads, in part:
(10) “Motor vehicle” means any device or vehicle, including automobiles, motorcycles, motor trucks, trailers, mobile homes, and all other vehicles operated over the public highways and streets of this state and propelled by power other than muscular power….
With regard to a retail installment transaction, the key words you want to pay particular attention to are “payable in one or more deferred installments.” This means if you deliver the vehicle, and the person still owes you money for the vehicle (not including tag and title fees), and you accept one or more payments from the person after delivery – even if you don’t charge interest – you are acting as a Motor Vehicle Retail Installment Seller! And if you are not licensed as a Motor Vehicle Retail Installment Seller, this act is considered unlicensed activity.
According to one Examiner with OFR – who conducted an examination of an independent dealer – the following are just some examples of what constitutes unlicensed activity:
Unlicensed activities include but are not limited to:
- Providing IN-HOUSE Financing for motor vehicles (Buy Here/ Pay Here).
- Originating the sales contract with the customer, then assigning it to a lender that actually provides the financing.
Here are some questions to consider to determine if you are violating Florida law regarding motor vehicle retail installment sales:
- Have you ever placed a lien on a unit after accepting a check for the RV to ensure the check cleared?
- Have you ever sold an RV “90 days same as cash” (where you didn’t charge interest)?
- Have you ever signed a retail installment sales contract and immediately reassigned the contract to a lender?
If you answered “yes” to any of the above, you should be licensed as a Motor Vehicle Retail Installment Seller. If you are licensed, the two most common violations found during an examination by OFR staff include:
- Charging the incorrect ad-on rate (state violation) which leads to an incorrect APR (federal violation), and
- Charging unlawful or unauthorized fees (for example, you overcharge customers for tag and title fees and you don’t refund the difference).
NOTE: If you overcharged for tag and title fees and you financed those fees, you must issue a refund not only for the amount of the overcharge, but also for the pro-rata finance charge that would apply to the overcharge throughout the term of the loan.
Reference: Chapter 520, Florida Statutes