Definitions; Construction

1. Law
2. Georgia Code
3. Commerce and Trade
4. Selling and Other Trade Practices
5. Motor Vehicle Sales Financing
6. Definitions; Construction

1. As used in this article, the term:
   1. "Cash sale price" means the price stated in a retail installment contract for which the seller would have sold to the buyer and the buyer would have bought from the seller the motor vehicle which is the subject matter of the retail installment contract if such sale had been a sale for cash instead of a retail installment transaction. The cash sale price may include any taxes; registration, certificate of title, license, and other fees; and charges for accessories and their installation and for delivery, servicing, repairing, or improving the motor vehicle. The cash sale price may also include any amount paid to the buyer or to a third party on behalf of the buyer to satisfy a lease on or a lien on or a security interest in a motor vehicle used as a trade-in on the motor vehicle which is the subject of a retail installment transaction under this article.
   2. "Finance charge" means the amount agreed upon between the buyer and the seller, as limited in this article, to be added to the cash sale price, the amount, if any, included for insurance and other benefits, if a separate charge is made therefor, and official fees, in determining the time sale price.
   3. "Holder" of a retail installment contract means the retail seller of the motor vehicle under the contract or, if the contract is purchased by a sales finance company or another assignee, the sales finance company or other assignee at the time of the determination.
   4. "Motor vehicle" means any device or vehicle including automobiles, motorcycles, motor trucks, trailers, and all other vehicles operated over the public highways and streets of this state and propelled by power other than muscular power but does not include traction engines, road rollers, implements of husbandry and other agricultural equipment, and such vehicles as run only upon a track.
   5. "Official fees" means the fees prescribed by law for filing, recording, or otherwise perfecting and releasing or satisfying a retained title or a lien created by a retail installment contract.
   6. "Person" means an individual, partnership, corporation, association, or any other group however organized.
   7. "Purchase price" means the time balance shown in the contract plus the down payment.
   8. "Retail buyer" or "buyer" means a person who buys a motor vehicle from a retail seller not principally for the purpose of resale and who executes a retail installment contract in connection therewith or a person who succeeds to the rights and obligations of such person.
   9. "Retail installment contract" or "contract" means an instrument or instruments creating a purchase money security interest.
   10. "Retail installment seller" or "seller" means a person engaged in the business of selling motor vehicles to retail buyers in retail installment transactions.
   11. "Retail installment transaction" means any transaction evidenced by a retail installment contract.
   12. "Sales finance company" means a person engaged in the business of purchasing retail installment contracts from one or more retail sellers. The term includes but is not limited to a bank, trust company, or installment loan company, if so engaged. The term does not include the pledge of an aggregate number of such contracts to secure a bona fide loan thereon.
   13. "Time sale price" means the cash sale price of a motor vehicle, the amount included for insurance and other benefits if a separate charge is made therefor, official fees, and finance charges. The time sale price may also include, if it has not been included in the cash sale price, any amount paid to the buyer or to a third party on behalf of the buyer to satisfy a lease on or a lien on or a security interest in a motor vehicle used as a trade-in on the motor vehicle which is the subject of a retail installment transaction under this article.
2. The rules of statutory construction contained in Chapter 3 of Title 1 shall apply to this article.

(Ga. L. 1967, p. 674, § 2; Ga. L. 1999, p. 1229, § 1; Ga. L. 2020, p. 156, § 8/SB 462.)

The 2020 amendment, effective June 30, 2020, substituted "installment loan" for "industrial loan" in the second sentence of paragraph (a)(12). See the Editor's notes for applicability.

Editor's notes.

- Ga. L. 2020, p. 156, § 10/SB 462, not codified by the General Assembly, provides that: "This Act shall apply to all installment loan agreements entered into on and after July 1, 2020."

Law reviews.

- For article, "Eleventh Circuit Survey: January 1, 2008 - December 31, 2008: Article: Bankruptcy," see 60 Mercer L. Rev. 1141 (2009). For article, "The Over-Encumbered Trade-In in Chapter 13," see 29 Emory Bankr. Dev. J. 15 (2012).

JUDICIAL DECISIONS

ANALYSIS

• General Consideration
• Retail Installment Transaction
• Motor Vehicle

General Consideration

Cited in Holden v. Peoples, Inc., 122 Ga. App. 269, 176 S.E.2d 516 (1970); Pike v. Universal C.I.T. Credit Corp., 125 Ga. App. 83, 186 S.E.2d 482 (1971); Tollett v. Green Tree Acceptance, Inc., 190 Ga. App. 295, 379 S.E.2d 2 (1989); Ervin v. Arnold, 197 Ga. App. 841, 399 S.E.2d 548 (1990); SunTrust Bank v. Venable, 299 Ga. 655, 791 S.E.2d 5 (2016).

Retail Installment Transaction

Not "retail installment transaction" when bank, not seller, obtains lien.

- When seller sold mobile home for a "cash sales price" and bank financed loan for the "cash sales price," the proceeds of which were then paid to the seller, the bank, not the seller, had a purchase money security interest in the mobile home, and the actual sale was not a "retail installment transaction" under paragraphs (a)(9) and (a)(11) of this section. Massey v. Stephens, 155 Ga. App. 243, 270 S.E.2d 796 (1980).

Motor Vehicle

Caterpillar 977L Traxcavator does not fall under the definition of "motor vehicle" found either in paragraph (a)(4) of O.C.G.A. § 10-1-31 or the general definition of "motor vehicle" under O.C.G.A. § 40-1-1(33) but does fit the definition of "special mobile equipment" under § 40-1-1(59). Battle v. Yancey Bros. Co., 157 Ga. App. 277, 277 S.E.2d 280 (1981).

Purchase money interest in negative equity financed as part of trade-in.

- Because the definition of "cash sales price" included any amount paid to the buyer or to a third party to satisfy a lease on or a lien on or a security interest in a motor vehicle used as a trade-in, pursuant to O.C.G.A. § 10-1-31, that entire amount was included in the purchase money security interest under 11 U.S.C. § 1325(a). In re Graupner, 356 Bankr. 907 (Bankr. M.D. Ga. 2006), aff'd, NO. 4:07-CV-37 (CDL), 2007 U.S. Dist. LEXIS 46144 (M.D. Ga. 2007).

Monies paid on debtor's behalf for an extended service contract and gap insurance were part of the purchase price of the debtor's vehicle for purposes of O.C.G.A. § 11-9-103 and the unnumbered, hanging paragraph following 11 U.S.C. § 1325(a)(9). The service contract was a charge for "servicing" the motor vehicle under O.C.G.A § 10-1-31(a)(1), and applying the close nexus standard in § 11-9-103 led the court to believe that gap insurance was also included in the purchase money security interest. In re Spratling, 377 Bankr. 941 (Bankr. M.D. Ga. 2007).

Under O.C.G.A. §§ 10-1-31(a) and11-9-103, negative equity in a debtor's trade-in vehicle was properly regarded as a purchase money security interest under the hanging paragraph referencing 11 U.S.C. § 1325(a)(5) in that there was a close nexus to the purchase of a vehicle for personal use within 910 days of filing for Chapter 13 relief. Thus, 11 U.S.C. § 506 did not apply to cram down the creditor's secured claim. Graupner v. Nuvell Credit Corp. (In re Graupner), 537 F.3d 1295 (11th Cir. 2008).

Notice objection did not apply.

- With respect to the creditor's deficiency claim arising from a sale of a truck in which the creditor had perfected a first-priority lien, the debtor's objection based on O.C.G.A. § 10-1-31, which requires additional notice to recover a deficiency against a buyer, did not apply to bar the claim because the creditor was not a sales finance company under the Georgia statute given that it had not purchased a retail installment contract from a seller and was not engaged in the business of purchasing retail installment contracts. Ambrose v. Advantage Funding Commer. Capital Corp. (In re Ambrose), 568 Bankr. 716 (Bankr. N.D. Ga. 2017).

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