Chapter 6. Installment Sales of Motor Vehicles.

§ 50–601. Definitions.

For purposes of this chapter, unless the context requires a different meaning:

(1) “Mayor” means the Mayor of the District of Columbia, or his designated agent.

(2) “District” means the District of Columbia.

(3) “Finance charge” means finance charge as defined under the provisions of the Truth in Lending Act (15 U.S.C. § 1601 et seq.) and the regulations and interpretations thereunder.

(4) “Governmental charges” means the excise tax, personal property tax, inspection fee, registration fee, recording fee, and such other fees charged by any government, or otherwise authorized by law, incident to the transfer of title to a motor vehicle as the District of Columbia Council may by regulation include within such term.

(5) “Instrument of security” means any promissory note, retail installment contract, or other written promise to pay the unpaid balance of the total amount to be paid by a retail buyer of a motor vehicle.

(6) "Motor vehicle" means any automobile, mobile home, motorcycle, truck, truck tractor, trailer, semi-trailer, or bus. The term "motor vehicle" shall not include any boat trailer, any vehicle propelled or drawn exclusively by muscular power, any vehicle designed to run only on rails or tracks, a personal mobility device, as the term is defined in § 50-2201.02(13), electric mobility devices, as the term is defined in § 50-2201.02(6A), motorized bicycles, as the term is defined in § 50-2201.02(11A), or a battery-operated wheelchair when operated by a person with a disability.

(7) “Person” means an individual, firm, partnership, joint-stock company, corporation, association, incorporated society, statutory or common law trust, estate, executor, administrator, receiver, trustee, conservator, liquidator, committee, assignee, officer, employee, principal, or agent.

(8) “Principal balance” means the cash sale price of a motor vehicle, including accessories and equipment, plus the amounts, if any, included in the retail installment contract, if separate identified charges are stated therein, for insurance and governmental charges, less the amount of the purchaser’s downpayment, if any, in money or goods or both.

(9) “Retail installment contract” means a contract entered into in the District or entered into by a seller licensed or required to be licensed by the District evidencing a retail installment transaction pursuant to which the title to or a lien on, or security or a security interest in, the motor vehicle, which is the subject matter of the transaction, is retained or taken to secure, in whole or in part, the retail buyer’s obligations. The term includes a security agreement, chattel mortgage, conditional sale contract and a contract in the form of a bailment or a lease if the bailee or lessee contracts to pay as compensation for use a sum substantially equivalent to or in excess of the value of the motor vehicle sold and it is agreed that the bailee or lessee is bound to become, or, for no further or a merely nominal consideration, has the option of becoming, the owner of the motor vehicle upon full compliance with the terms of the bailment or lease.

(10) “Retail installment transaction” means any transaction in which a retail buyer purchases a motor vehicle for a price in excess of the cash sale price and agrees to pay part or all of such price in one or more deferred installments.

(11) “Security interest” and “secured party” have the same meanings as those given to the terms in §§ 28:1-201 and 28:9-105(m) [see now §§ 28:1-201(37) and 28:9-102(a)(72)].

(Apr. 22, 1960, 74 Stat. 69, Pub. L. 86-431, § 1; Dec. 30, 1963, 77 Stat. 771, Pub. L. 88-243, § 9; Mar. 5, 1981, D.C. Law 3-135, § 3, 27 DCR 4526; Mar. 15, 1985, D.C. Law 5-176, § 6, 32 DCR 748; Mar. 25, 2003, D.C. Law 14-235, § 3, 49 DCR 9788; Mar. 13, 2004, D.C. Law 15-105, § 90(a), 51 DCR 881; Mar. 6, 2007, D.C. Law 16-224, § 202, 53 DCR 10225; Mar. 16, 2021, D.C. Law 23-203, § 202, 67 DCR 13886.)

Prior Codifications

1981 Ed., § 40-1101.

1973 Ed., § 40-901.

Section References

This section is referenced in § 22-3215.

Effect of Amendments

D.C. Law 14-235 rewrote par. (6) which had read as follows: “(6) ‘Motor vehicle’ means any automobile, mobile home, motorcycle, truck, truck tractor, trailer, semitrailer, or bus. The term ‘motor vehicle’ shall not include any boat trailer, any vehicle propelled or drawn exclusively by muscular power, any vehicle designed to run only on rails or tracks, and any battery-operated wheelchairs when operated by a handicapped person at speeds not exceeding 10 miles per hour.”

D.C. Law 15-105, in par. (6), validated a previously made technical correction.

D.C. Law 16-224, in par. (6), revived the provisions of D.C. Law 14-235 that expired on October 1, 2005, and substituted “personal mobility device, as defined by § 50-2201.02(12), or a battery-operated wheelchair when operated by a person with a disability” for “electric personal assistive mobility devices, as defined by § 50-2201.02(12), and battery-operated wheelchairs when operated by a handicapped person at speeds not exceeding 10 miles per hour”.

Cross References

Criminal offenses, unauthorized use of a motor vehicle, see § 22-3215.

Expiration of Law

Expiration of Law 14-235

Section 14 of D.C. Law 14-235 provided that the act shall expire on October 1, 2005.

Emergency Legislation

For temporary (90 day) amendment of section, see § 3 of Motor Vehicle Definition Electric Personal Assistive Mobility Device Exemption Emergency Amendment Act of 2005 (D.C. Act 16-237, December 22, 2005, 53 DCR 249).

For temporary (90 day) amendment of section, see § 3 of Motor Vehicle Definition Electric Personal Assistive Mobility Device Exemption Congressional Review Emergency Amendment Act of 2006 (D.C. Act 16-323, March 23, 2006, 53 DCR 2567).

For temporary (90 day) amendment of section, see § 202 of Personal Mobility Device Emergency Amendment Act of 2006 (D.C. Act 16-528, December 4, 2006, 53 DCR 9826).

Temporary Legislation

For temporary (225 day) amendment of section, see § 3 of Motor Vehicle Definition Electric Personal Assistive Mobility Device Exemption Temporary Amendment Act of 2006 (D.C. Law 16-85, April 4, 2006, law notification 53 DCR 3344).

Change in Government

This section originated at a time when local government powers were delegated to a Board of Commissioners of the District of Columbia (see Acts Relating to the Establishment of the District of Columbia and its Various Forms of Governmental Organization in Volume 1). Section 401 of Reorganization Plan No. 3 of 1967 (see Reorganization Plans in Volume 1) transferred all of the functions of the Board of Commissioners under this section to a single Commissioner. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818, § 711 ( D.C. Code, § 1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to § 714(a) of such Act ( D.C. Code, § 1-207.14(a)), appropriate changes in terminology were made in this section.

§ 50–602. Maximum finance charges; computation; proportionate adjustments; investigation of economic conditions to determine finance charges; regulations; classification of parties; waiver.

(a) Notwithstanding the provisions of any instrument of security, refinancing contract, or other instrument to the contrary, made or entered into on or after March 5, 1981, no person shall charge, contract for, receive, or collect a finance charge if such charge exceeds the larger of $25 or an amount determined under the following schedule:

Class 1. Any new domestic motor vehicle designated by the manufacturer by a year model not earlier than the year in which the sale is made and any new foreign motor vehicle — 21.5% annual percentage rate.

Class 2. Any new domestic motor vehicle not in class 1 and any used domestic motor vehicle designated by the manufacturer by a year model of the same or not more than 2 years prior to the year in which the sale is made and any used foreign motor vehicle not more than 2 years old — 23.5% annual percentage rate.

Class 3. Any used motor vehicle not in class 2, and, if a domestic motor vehicle, designated by the manufacturer by a year model not more than 4 years prior to the year in which the sale is made, and, if a foreign motor vehicle, not more than 4 years old — 27% annual percentage rate.

Class 4. Any used motor vehicle not in class 2 or class 3 — 28.33% annual percentage rate.

(b) The finance charge authorized by the preceding subsection shall be computed on the principal balance payable for a motor vehicle from the date of the instrument or contract until the maturity of the final installment, notwithstanding that the balance thereof is required to be paid in installments.

(c) For a period less or greater than 12 months or for amounts less or greater than $100, the amount of the maximum charge set forth in the foregoing schedule shall be decreased or increased proportionately.

(d) The Mayor shall from time to time investigate the economic conditions and other factors relating to and affecting finance charges, and shall ascertain all pertinent facts necessary to determine what maximum charges should be permitted in such transactions. Upon the basis of such ascertained facts, the Council of the District of Columbia, notwithstanding the provisions of the preceding subsections, shall from time to time by regulation or order determine and fix the maximum finance charges sufficiently high to result in a fair return on investment to persons engaged in the business of financing retail installment transactions, but not so high as to constitute an unreasonable economic burden on the purchasers of motor vehicles under retail installment contracts. The Council may from time to time, upon the basis of changed conditions or facts, redetermine and refix any such maximum finance charge, but, before determining or redetermining any such maximum charge, the Council shall give reasonable notice of its intention to consider doing so, and provide a reasonable opportunity to persons desiring to be heard with respect to any such proposed determination or redetermination. Notice of the action proposed by the Council shall be published once a week for 2 consecutive weeks in 1 or more of the daily newspapers published in the District. Any such changed maximum finance charge shall not affect any pre-existing instrument of security lawfully entered into between the seller and the purchaser of any motor vehicle.

(e)(1) The Council is hereby authorized to make, and the Mayor is authorized to enforce, such regulations as the Council in its discretion deems appropriate to carry out the purposes of this section and to prevent unconscionable practices in connection with retail installment transactions, including, without limitation, provisions:

(A) Governing the form and substance of instruments of security;

(B) Requiring that installment payments under instruments of security be made in substantially equal amounts and at regular intervals except:

(i) That the interval for the 1st installment payment may be longer than the other intervals;

(ii) That the final installment payment may be less in amount than the preceding installment payments;

(iii) That where a buyer’s livelihood is dependent upon seasonal or intermittent income, 1 or more installment payments in the schedule of payments included in any such instrument of security may be reduced or omitted; and

(iv) That any contract covering a new motor vehicle to be used primarily as a demonstrator sold to a bona fide motor vehicle salesman employed by the seller shall be exempt from the requirement that installment payments be in substantially equal amounts;

(C) Requiring that amounts due under instruments of security may be prepaid in full and that the unearned charges, whether for finance, insurance, or for other purposes, attributable to or resulting from such prepayments shall be refunded or credited;

(D) Establishing maximum delinquency, collection, repossession and other charges;

(E) Specifying the types and maximum amounts of insurance which may be required, at the expense of the retail buyer, to protect from loss the seller in a retail installment transaction or his assignee or any other person entitled to payments from a retail buyer under an instrument of security;

(F) Respecting the manner and methods of notice of default given to a retail buyer before and after a seller’s repossession of a motor vehicle, the methods and opportunity for cure and redemption, and the manner and method of sale or disposition of repossessed motor vehicles;

(G) Requiring the books and records of persons engaged in the business of financing retail installment transactions to be subject to production for examination by the Mayor.

(2) The Council is further authorized, in its discretion, to make, and the Mayor enforce, such additional regulations as it deems necessary to insure that purchasers of motor vehicles under instruments of security are not being required, directly or indirectly, to pay finance, insurance, or other charges in excess of those authorized by this chapter or by the Council pursuant to the authority vested in it.

(3) In exercising their powers and authority under this subsection, the Council is authorized, in its discretion, to make reasonable classifications:

(A) According to the parties to retail installment transactions; or

(B) According to the parties to the instruments of security; or

(D) According to other bases; or

(E) According to 2 or more of the foregoing subparagraphs (A) through (D), and to exercise such powers and authority under this subsection with respect to any 1 or more of any classifications so made or with respect to all of said classifications.

(f) No provision shall be inserted in any retail installment contract whereby the buyer waives or purports to waive any provision of this chapter, and any such waiver or purported waiver shall be void and of no effect. The Council is authorized in its discretion, by regulation:

(1) To prohibit the inclusion in any retail installment contract of any provision waiving or purporting to waive any provision of any regulation promulgated by the Council relating to retail installment transactions; and

(2) To provide that any such waiver or purported waiver, shall be void and of no effect.

(Apr. 22, 1960, 74 Stat. 69, Pub. L. 86-431, § 2; Sept. 16, 1980, D.C. Law 3-102, § 8, 27 DCR 3630; Mar. 5, 1981, D.C. Law 3-135, § 2, 27 DCR 4526; Mar. 31, 1982, D.C. Law 4-90, § 3, 29 DCR 666.)

Prior Codifications

1981 Ed., § 40-1102.

1973 Ed., § 40-902.

Editor's Notes

Findings and purposes of Law 4-90: See § 2 of D.C. Law 4-90.

Change in Government

This section originated at a time when local government powers were delegated to a Board of Commissioners of the District of Columbia (see Acts Relating to the Establishment of the District of Columbia and its Various Forms of Governmental Organization in Volume 1). Section 402(310 to 314) of Reorganization Plan No. 3 of 1967 (see Reorganization Plans in Volume 1) transferred all of the functions of the Board of Commissioners under this section to the District of Columbia Council subject to the right of the Commissioner as provided in § 406 of the Plan. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818, § 711 ( D.C. Code, § 1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to § 714(a) of such Act ( D.C. Code, § 1-207.14(a)), appropriate changes in terminology were made in this section.

§ 50–603. Bonding of automobile dealers and applicants; liability insurance; designation of Mayor as agent for service of process; limitation on bonds; action on bonds.

(a) In connection with the licensing of persons under the authority of Chapter 28 of Title 47, the Council of the District of Columbia is authorized to require either bonds or such other security as it may by regulation deem necessary, of persons licensed to engage in the business of buying or selling motor vehicles and of persons licensed to engage in the business of purchasing contracts for the retail installment sales of motor vehicles, and the Council may, from time to time, and in its discretion, establish classes and subclasses of such persons and, subject to subsection (b) of this section, specify the amount and conditions of the bond to be deposited by each of the members of any such class or subclass. In connection with the licensing of said persons, and the bonding of the members of any class or subclass of the said persons, the Council, in its discretion, may by regulation require applicants for licenses:

(1) To furnish and keep in force a bond running to the District, or other security, to protect members of the public against financial loss by reason of the failure of the licensee or of any officer, agent, employee, or other person acting on behalf of said licensee, to observe any law or regulation in force in the District of Columbia applicable to the licensee’s conduct of the licensed business;

(2) To procure and keep in force public liability insurance or property damage insurance, or both; and

(3) To appoint the Mayor as their true and lawful attorney upon whom all judicial and other process or legal notice directed to such person may be served.

(b)(1) The bonds authorized by this section shall be corporate surety bonds in amounts to be fixed by the Mayor, but no bond shall exceed $25,000, except as required by paragraph (2) of this subsection.

(2) Each person licensed to do business as a motor vehicle dealer in the District shall maintain a corporate surety bond in an amount not less than $25,000.

(3) The bond shall be conditioned upon the observance by the licensee and any officer, agent, employee, or other person acting on behalf of the licensee, of all laws and regulations in force in the District applicable to the licensee’s conduct of the licensed business, for the benefit of any person who may suffer damages resulting from the violation of any law or regulation by or on the part of the licensee or any officer, agent, employee, or other person acting on behalf of the licensee.

(c) Any person aggrieved by the violation of any law or regulation applicable to the licensee’s conduct of the licensed activity shall have, in addition to his right of action against such licensee, a right to bring suit against the surety on a bond authorized by this section, either alone or jointly with the principal thereon, and to recover in an amount not exceeding the penalty of the bond any damages sustained by reason of any act, transaction, or conduct of the licensee, or of any officer, agent, employee, or other person acting on behalf of said licensee, which is in violation of law or regulation in force in the District relating to the licensed activity. The provisions of paragraphs (2), (3), and (5) of subsection (b) of § 1-301.01, shall be applicable to each bond authorized by this section as if it were the bond authorized by the first subparagraph of such subsection (b) of § 1-301.01; provided, that nothing in this subsection shall be construed to impose upon the surety on any such bond a greater liability than the total amount thereof or the amount remaining unextinguished after any prior recovery or recoveries.

(Apr. 22, 1960, 74 Stat. 71, Pub. L. 86-431, § 3; Mar. 14, 1985, D.C. Law 5-162, § 7, 32 DCR 160.)

Prior Codifications

1981 Ed., § 40-1103.

1973 Ed., § 40-903.

Cross References

Automobile consumer protection, see § 50-501 et seq.

Change in Government

This section originated at a time when local government powers were delegated to a Board of Commissioners of the District of Columbia (see Acts Relating to the Establishment of the District of Columbia and its Various Forms of Governmental Organization in Volume 1). Section 402(315) of Reorganization Plan No. 3 of 1967 (see Reorganization Plans in Volume 1) transferred all of the functions of the Board of Commissioners under this section to the District of Columbia Council, subject to the right of the Commissioner as provided in § 406 of the Plan. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818, § 711 ( D.C. Code, § 1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to § 714(a) of such Act ( D.C. Code, § 1-207.14(a)), appropriate changes in terminology were made in this section.

§ 50–604. Delegation of functions; exception.

With the exception of the function of making regulations to carry out the purposes of this chapter, the Mayor is authorized to delegate, with power to redelegate, any of the functions vested in him by this chapter.

(Apr. 22, 1960, 74 Stat. 73, Pub. L. 86-431, § 5.)

Prior Codifications

1981 Ed., § 40-1104.

1973 Ed., § 40-904.

Change in Government

§ 50–605. Council to make regulations; public hearings.

The Council of the District of Columbia is authorized to promulgate regulations to carry out the purposes of this chapter; provided, that no such regulation shall become effective until after a public hearing has been held thereon.

(Apr. 22, 1960, 74 Stat. 73, Pub. L. 86-431, § 6.)

Prior Codifications

1981 Ed., § 40-1105.

1973 Ed., § 40-905.

New Implementing Regulations

New implementing regulations: Pursuant to this section, the following new regulations were adopted in 1982: The “District of Columbia Automobile Financing and Repossession Act of 1981” (D.C. Law 4-90, March 31, 1982, 29 DCR 666).

Change in Government

This section originated at a time when local government powers were delegated to a Board of Commissioners of the District of Columbia (see Acts Relating to the Establishment of the District of Columbia and its Various Forms of Governmental Organization in Volume 1). Section 402(316) of Reorganization Plan No. 3 of 1967 (see Reorganization Plans in Volume 1) transferred all of the functions of the Board of Commissioners under this section to the District of Columbia Council, subject to the right of the Commissioner as provided in § 406 of the Plan. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818, § 711 ( D.C. Code, § 1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to § 714(a) of such Act ( D.C. Code, § 1-207.14(a)), appropriate changes in terminology were made in this section.

§ 50–606. False statements.

No person shall make any statement required or authorized by this chapter to be filed with the Mayor, knowing that the information set forth in such statement is false.

(Apr. 22, 1960, 74 Stat. 73, Pub. L. 86-431, § 7.)

Prior Codifications

1981 Ed., § 40-1106.

1973 Ed., § 40-906.

Change in Government

§ 50–607. Penalties.

Any person who shall violate any provision of this chapter or of any regulation promulgated by the Council of the District of Columbia under the authority of this chapter, shall be guilty of a misdemeanor and shall be punished by a fine not more than the amount set forth in § 22-3571.01 or by imprisonment for not more than 6 months, or both. Civil fines, penalties, and fees may be imposed as alternative sanctions for any infraction of the provisions of this chapter, or any rules or regulations issued under the authority of this chapter, pursuant to Chapter 18 of Title 2. Adjudication of any infraction of this chapter shall be pursuant to Chapter 18 of Title 2.

(Apr. 22, 1960, 74 Stat. 73, Pub. L. 86-431, § 8; Oct. 5, 1985, D.C. Law 6-42, § 435, 32 DCR 4450; June 11, 2013, D.C. Law 19-317, § 264, 60 DCR 2064.)

Prior Codifications

1981 Ed., § 40-1107.

1973 Ed., § 40-907.

Effect of Amendments

The 2013 amendment by D.C. Law 19-317 substituted “not more than the amount set forth in § 22-3571.01” for “not exceeding $500”.

Emergency Legislation

For temporary (90 days) amendment of this section, see § 264 of the Criminal Fine Proportionality Emergency Act of 2013 (D.C. Act 20-45, April 1, 2013, 60 DCR 5400, 20 DCSTAT 1300).

Editor's Notes

Applicability of D.C. Law 19-317: Section 401 of D.C. Law 19-317 provided that the act shall apply only to offenses committed on or after June 11, 2013.

Change in Government

This section originated at a time when local government powers were delegated to a Board of Commissioners of the District of Columbia (see Acts Relating to the Establishment of the District of Columbia and its Various Forms of Governmental Organization in Volume 1). Section 402 (309 to 316) of Reorganization Plan No. 3 of 1967 (see Reorganization Plans in Volume 1) transferred all of the functions of the Board of Commissioners under this section to the District of Columbia Council, subject to the right of the Commissioner as provided in § 406 of the Plan. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818, § 711 ( D.C. Code, § 1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to § 714(a) of such Act ( D.C. Code, § 1-207.14(a)), appropriate changes in terminology were made in this section.

§ 50–608. Prosecutions.

Prosecutions for violations of this chapter, or of the regulations made pursuant thereto, shall be conducted in the name of the District by the Corporation Counsel or any of his assistants. As used in this chapter the term “Corporation Counsel” means the attorney for the District, by whatever title such attorney may be known, designated by the Mayor to perform the functions prescribed for the Corporation Counsel in this chapter.

(Apr. 22, 1960, 74 Stat. 73, Pub. L. 86-431, § 9.)

Prior Codifications

1981 Ed., § 40-1108.

1973 Ed., § 40-908.

Change in Government

This section originated at a time when local government powers were delegated to a Board of Commissioners of the District of Columbia (see Acts Relating to the Establishment of the District of Columbia and its Various Forms of Governmental Organization in Volume 1). Section 401 of Reorganization Plan No. 3 of 1967 (see Reorganization Plans in Volume 1) transferred all of the functions of the Board of Commissioners under this section of a single Commissioner. The District of Columbia Self-Government and Governmental Reorganization Act, 87 Stat. 818, § 711 ( D.C. Code, § 1-207.11), abolished the District of Columbia Council and the Office of Commissioner of the District of Columbia. These branches of government were replaced by the Council of the District of Columbia and the Office of Mayor of the District of Columbia, respectively. Accordingly, and also pursuant to § 714(a) of such Act ( D.C. Code, § 1-207.14(a)), appropriate changes in terminology were made in this section.

§ 50–609. Additional authority granted to Mayor.

The authority and power vested in the Mayor by any provision of this chapter shall be deemed to be additional and supplementary to authority and power now vested in him, and not as a limitation.

(Apr. 22, 1960, 74 Stat. 73, Pub. L. 86-431, § 10.)

Prior Codifications

1981 Ed., § 40-1109.

1973 Ed., § 40-909.

Change in Government

§ 50–610. Severability.

If any provision of this chapter or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or the application of this chapter which can be effected without the invalid provision or application, and to this end the provisions of this chapter are severable.