{"data":{"id":"us-ky/krs-190.110","jurisdiction":"us-ky","citation":"KRS 190.110","heading":"Finance charges -- Rates -- Computations.","body":"(1) The finance charge allowed by this subsection may be precomputed by using an\nadd-on method. If the finance charge in a retail installment sale is precomputed it\nshall not exceed the following rates:\nClass 1. Any new or used motor vehicle designated by the manufacturer by a year\nmodel not earlier than the year in which the sale is made -- eleven dollars\n($11) per one hundred dollars ($100) of principal balance, as determined\npursuant to KRS 190.100(2), per year of the contract.\nClass 2. Any new motor vehicle  not in class 1 and any used motor vehicle\ndesignated by the manufacturer by a year model of one (1) or two (2) years\nprior to the year in which the sale is made -- thirteen dollars ($13) per one\nhundred dollars ($100) of principal balance, as determined p ursuant to KRS\n190.100(2), per year of the contract.\nClass 3. All other motor vehicles not in class 1 or 2 -- fifteen dollars ($15) per\none hundred dollars ($100) of principal balance, as determined pursuant to\nKRS 190.100(2), per year of the contract.\n(2) If the finance charge applicable to a retail installment sale is precomputed and the\nretail installment contract provides for successive monthly payments, substantially\nequal in amount, the maximum finance charge computed pursuant to subsection (1)\nof this section for a partial year occurring at the beginning of a contract with a term\nof less than one (1) year or at the end of a contract with a remaining term greater\nthan a year shall be prorated at the annual maximum amount of finance charge\ncomputed under subsection (1) of this section, based on the number of months in\nthe partial year.\n(3) If the finance charge applicable to a retail installment sale is precomputed and the\nretail installment contract provides for unequal or irregular installment payments ,\nthe maximum finance rate of the finance charge shall be at the effective rate\nprovided in subsection (1) of this section, having due regard for the schedule of\npayment.\n(4) Alternatively, the seller may, at his option, compute the finance charge in a ret ail\ninstallment sale on a simple interest basis, taking into account the actual number of\ndays between payments under the contract using a fixed or variable rate not to\nexceed the effective rate of finance charge permitted under subsection (1) of this\nsection.\n(5) For the purposes of subsections (3) and (4) of this section, the effective rate of the\nfinance charge permitted by subsection (1) of this section shall be the rate computed\nin accordance with the actuarial method or the United States Rule method f or a\nretail installment contract that provides for:\n(a) The total finance charge permitted under subsections (1) and (2) of this\nsection;\n(b) Successive monthly payments substantially equal in amount; and\n(c) The purchase of a vehicle of the same vehicle c lass over the same term as the\nunequal or irregular installment payment contract subject to subsection (3) of\nthis section or the simple interest basis contract subject to subsection (4) of\nthis section. In computing the effective rate, the seller may make  any\nassumptions and use any method that the Truth in Lending Act and the\nregulations promulgated thereunder would permit in computing the annual\npercentage rate.","path":["KRS Chapter 190"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=40508","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:51:45Z","sha256":"b59e805c1551014fad044d1c59c4a9fe9610309ef9264c2cea4efcfd7247d26c","source_id":"us-ky","stale":false,"prev":"us-ky/krs-190.100","next":"us-ky/krs-190.120"},"notice":"GroundRules: Original legal text. Not legal advice."}