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Rhode Island Car Loan Laws

Rhode Island makes a lender send a cure notice before it repossesses a personal car, gives you 20 days to redeem afterward, and taxes the price minus your trade-in.

Updated By Lenditia Editorial Team 6-minute read Right to cure

In short

Rhode Island's Automobile Repossession Act gives you a right to cure: once you are 10 days behind, the lender must send a notice and give you at least 21 days to catch up before it repossesses, sues or accelerates. After a repossession you have 20 days to redeem. Retail installment contracts are limited to 18% simple interest, while banks, credit unions and licensed lenders fall under the general usury limit of 21% or a prime-based rate. Sales tax is 7%, and a trade-in lowers the taxable amount on a passenger car.

Right to cure
21 days after notice
Rate ceiling
18%; licensees up to 21%+
Doc fee limit
No dollar cap found
Vehicle sales tax
7% minus trade-in
Map of the United States with Rhode Island highlighted

Rhode Island car-finance rules at a glance

Rhode Island Right to cure Right to catch up on missed payments and keep the car Checked Oct 26, 2026
Right to cure
Yes: at least 21 days after a notice, once 10 days in default; once per 12 months
R.I. Gen. Laws §6-51-3; covers consumer car loans and leases for personal, family or household use.
Rate ceiling
18% on retail installment contracts; licensed lenders: 21% or prime + 9%
§6-27-4 exempts banks, credit unions and Title 19 licensees, which follow the §6-26-2 usury limit.
Doc fee limit
No dollar cap found in the statutes we checked
After repossession
20 days to redeem; no sale before then; police notified; deficiency rules under UCC
Vehicle sales tax
7%; trade-in exempt for private passenger cars
Paid by the buyer directly to the state before registration, not added by the dealer.
Regulator
Department of Business Regulation, Banking Division

Interest limits on Rhode Island car financing

Two statutes set the limits, and which one applies depends on who extends the credit. Section 6-27-4 of the General Laws caps the finance charge on a retail installment contract at 18% simple interest a year. That section does not apply to financial institutions, credit unions or lenders licensed under Title 19.

Those exempt lenders are bound instead by the usury statute, section 6-26-2. It caps interest at the greater of 21% a year or an alternate rate equal to 9 percentage points above the prime rate published in The Wall Street Journal. So the ceiling on a car loan from a licensed lender moves with the prime rate.

Sales tax and fees on a Rhode Island purchase

  • Sales and use tax. The rate is 7% (R.I. Gen. Laws §44-18-18).
  • Trade-in. For a private passenger car not used for hire, the part of the price covered by your trade-in allowance is exempt (§44-18-30). The exemption does not cover trucks and other vehicle types.
  • How you pay. For vehicles that must be registered, the dealer does not add the tax to the price. You pay it directly to the state, and the Division of Motor Vehicles needs proof of payment before it registers the car (§44-18-21).
  • Documentary fee. We found no dollar limit on dealer doc fees in the Rhode Island statutes we checked. Ask what the fee covers and compare it between dealers.

Add the tax, fees and any optional add-ons before you settle on a payment. The out-the-door price calculator does the sum.

Your right to cure and repossession rules

The Rhode Island Automobile Repossession Act, chapter 6-51, covers car loans and leases taken out mainly for personal, family or household use. A default counts only if you miss a payment or the lender shows that your ability to pay or its ability to recover the car is significantly impaired.

  1. Notice of your right to cure. After you have been in default for 10 days, the lender may send a cure notice by certified or first-class mail. It counts as given on delivery or three business days after mailing (§6-51-3).
  2. At least 21 days to catch up. The notice must give a cure date at least 21 days after delivery. Paying the missed amounts and any late charges restores the contract as if you had not defaulted.
  3. Once a year. You may use the right to cure only once in any 12-month period.
  4. Repossession. If you do not cure, the lender may repossess without a hearing only if it avoids a breach of the peace; it generally may not enter your property without consent. It must tell the local police department (§6-51-4).
  5. 20 days to redeem. You may get the car back within 20 days after repossession by paying what the act requires, and the lender may not sell the car until that period ends.

After a sale, Rhode Island's version of Article 9 of the Uniform Commercial Code governs how the lender credits the proceeds and whether you owe a deficiency balance. Our guide for when you fall behind explains how to use the cure period.

Where to check a lender and complain

The Banking Division of the Department of Business Regulation licenses lenders, small loan lenders, loan brokers and third-party loan servicers through the national licensing system. For title loan and payday rules in the state, see Lendmira's Rhode Island page.

Department of Business Regulation, Banking Division

Licenses non-bank lenders and servicers and takes consumer complaints through an online form.

Rhode Island Attorney General

Its consumer protection unit handles complaints about unfair or deceptive dealer practices.

Consumer Financial Protection Bureau

Takes complaints about auto lenders and servicers, including banks and finance companies.

Questions people ask

Does Rhode Island give me a chance to catch up before repossession?

Yes. Once you are 10 days in default, the lender must send a cure notice and give you at least 21 days to pay what is past due. You can use this right once in any 12 months.

How long do I have to get my car back after repossession in Rhode Island?

Twenty days. The lender may not sell the car until that redemption period has passed.

What is the maximum interest rate on a car loan in Rhode Island?

Retail installment contracts are capped at 18% simple interest. Banks, credit unions and licensed lenders are exempt from that cap and fall under the usury limit: 21% or 9 points above prime, whichever is greater.

Does a trade-in reduce the sales tax in Rhode Island?

Yes for private passenger cars: the trade-in allowance is exempt from the 7% tax. Trucks and other vehicle types do not get this exemption.

Sources

Facts on this page were checked against these sources on October 26, 2026. The usury limit's alternate rate moves with the prime rate.

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