Georgia's Usury Laws on Used Cars

Usury interest rate limits are governed by state statutes. In Georgia, the Department of Banking & Finance is responsible for enforcing the state's usury laws governing interest rates that lenders conducting business within the state can charge consumers. The Georgia General Assembly enacted usury laws for credit card lenders, industrial and commercial loan lenders, retail installment loan lenders and motor vehicle loan lenders.

Georgia's Motor Vehicle Usury Law

Under Georgia Code Section 10-1-33(d), the state's usury laws govern vehicle loans of $5,000 or less. The usury laws do not apply to vehicle loans exceeding $5,000. If a buyer purchases a car exceeding $5,000 and obtains a car loan, he must negotiate with the seller as to the applicable interest rates. The state's usury laws do not include sales fees and insurance, and the annual percentage rate limits do not include those charges.

Motor Vehicle Sales Finance Act

The Georgia Motor Vehicle Sales Finance Act was amended in 1995 to limit the late fees charged for business and commercial vehicles to 5 percent of the installment due. Georgia law limits new car loans to 10 percent annual interest, and a vehicle loan for a new car cannot include interest terms for more than $100 of interest annually. For "Class 2" cars that are used but less than two years old, the state limits the interest rate at 13 percent. For cars between two and four years old, the cap is at 15 percent. For "Class 4" cars that are older than four years, the state limits the interest rate to 17 percent. Furthermore, lenders cannot charge late fees that exceed 5 percent of the loan per month or $50, whichever is less.

Consumer Complaints

Georgia is only one of three states that does not give its Attorney General the primary responsibility of investigating consumer fraud complaints. Instead, consumers must file complaints with the Georgia Governor's Office of Consumer Affairs. In addition to the state's usury laws, the Governor's Office of Consumer Affairs is responsible for investigating consumer complaints of odometer fraud.

Odometer Fraud

Under Georgia law, odometer fraud is a misdemeanor and can lead to penalties of up to $1,000 and one-year in jail. Knowing tampering with or misrepresenting the true reading of a vehicle's odometer is also illegal under federal law. The federal government considers the crime a felony, and it can charge those guilty of odometer fraud with up to $50,000 in fines and three years in federal prison. Victims of odometer fraud can file civil suits in either federal or state court for treble damages plus court costs and attorney's fees.

Considerations

Since state laws can frequently change, do not use this information as a substitute for legal advice. Seek advice through an attorney licensed to practice law in your state.