Colorado Car Loan Laws

How much interest a Colorado car loan can carry

A car bought on credit for personal use is a consumer credit sale under the UCCC, Title 5 of the Colorado Revised Statutes, when the amount financed is $75,000 or less. Section 5-2-201 lets the seller charge the greater of two figures, both calculated on the unpaid balance.

On a typical car balance, the flat 21% is the higher of the two, so it works as the ceiling. The tiered method allows more only on small balances: on $1,500 it permits about 31% a year. Your retail installment contract must show the APR, and that is the number to compare. A ceiling is not a typical price, so run your offer through the car payment calculator.

Fees and taxes on a Colorado car purchase

• Sales tax. The state rate is 2.9% (C.R.S. §39-26-106). Cities, counties and special districts add their own. If you register the car outside the dealer's jurisdiction, you pay local use tax to your county clerk before titling.
• Trade-in. The fair market value of a vehicle you trade in is excluded from the taxable price.
• Doc fee. We found no cap on dealer documentation fees in Colorado law. The Department of Revenue counts mandatory dealer fees, such as documentation and processing fees, as part of the taxable price.
• Optional items. GAP coverage and other optional products are not taxed when listed separately on the invoice. Financing them still adds to your balance; see our guide to add-ons.

Your right to cure and repossession in Colorado

Colorado is one of the states that require a cure notice. Under C.R.S. §5-5-110 and §5-5-111, when your only default is a missed payment, the lender may send a notice of your right to cure once you are 10 days late. Until 20 days after that notice, it cannot accelerate the balance or repossess the car.

1. 1 The cure notice. It must give the creditor's name, address and phone number, identify the contract, and state the amount and the date by which you must pay to cure.
2. 2 Catching up. Paying everything past due, plus any unpaid late or deferral charges, before the deadline puts the contract back as if you had never missed a payment.
3. 3 A second default. If you default again within 12 months of a cure notice, there is no new cure right, and the lender may act right away.
4. 4 After repossession. The lender must send notice before it sells the car, and you can redeem it until the sale by paying the full balance and costs. You usually owe any shortfall, but not if the car's cash sale price was $3,000 or less (C.R.S. §5-5-103).

The cure right does not cover other kinds of default, such as letting required insurance lapse, and it does not apply to contracts payable in four or fewer installments. If a cosigner did not receive a proper cure notice, the lender cannot demand the full balance from the cosigner or report it to a credit bureau. Our guides to repossession and falling behind explain how to use these weeks.

Where to check a lender and complain

The UCCC Administrator, part of the Colorado Attorney General's Consumer Credit Unit, licenses non-bank lenders, receives notifications from creditors such as sellers and sales finance companies, and investigates complaints. The same office licenses repossessors. Banks and credit unions are supervised by their own regulators.

Questions people ask