I purchased a car the end of November and I have yet to make a payment because they can't explain to me why I am paying 22,000 for a car that was priced at 10900. Yes I signed the paperwork but could someone tell me what is the highest interest that a dealer can charge you in Michigan? And is there any way I can get out of the contract? Please!!!
Ignore 'Tim'.... since if you could answer his long range questions.... you wouldn't be here, would you??
The general usury limit in Michigan has been set at 7%. In other words, if the interest rate on a personal loan in Michigan exceeds the 7% rate, that loan is considered to be in violation of the law. It is considered to be an illegal contract and hence is unenforceable.
Those statutes that govern usury and usurious lending practices in Michigan can be found codified at Michigan Compiled Laws Sections 438 and 439.
For a table of specific loans allowed in Michigan, go to:
http://www.michigan.gov/documents/cis_ofis_ceilings_24956_7.pdf
However, the interest in Michigan may not be the relevant standard. You will have to read the agreement you signed and see EXACTLY what state is applicable.
If the $22k is the total amount you will be paying throughout the full term, it is likely that it includes interest and other fees. Depending on the length of payments and the interest rate, the TOTAL obligation can easily double the purchase price.