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Usury Law in TN and Auto Financing

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4mychild

Junior Member
What is the name of your state (only U.S. law)? TN

The Usury Law in TN is 24%.

A used car dealer charged me more than $8,000 over the blue book of a used car, and charged 29% interest.

Do I have legal recourse through the Usury Law?
 


4mychild

Junior Member
I'm afraid I don't know what you mean by "Cite please".

And I did not send a pm, so, I'm confused. I was simply asking a yes or no question about whether or not the Usury Law applied to this particular situation.
Thank you.
 

seniorjudge

Senior Member
What is the name of your state (only U.S. law)? TN

The Usury Law in TN is 24%.

A used car dealer charged me more than $8,000 over the blue book of a used car, and charged 29% interest.

Do I have legal recourse through the Usury Law?
Cite = the statute number where you got this info
 

mlane58

Senior Member
It's Section 45-15-111(a) of the Tennessee Title Pledge Act which sets forth the interest and fees that may be charged. It specifies that the title pledge lender may contract for and receive an effective rate of interest not to exceed 2% per month; additionally, the lender may charge a fee equal to no more than 1/5 of the original principal amount.
 

4mychild

Junior Member
It's Section 45-15-111(a) of the Tennessee Title Pledge Act which sets forth the interest and fees that may be charged. It specifies that the title pledge lender may contract for and receive an effective rate of interest not to exceed 2% per month; additionally, the lender may charge a fee equal to no more than 1/5 of the original principal amount.
OK. So, the contract called for 42 total payments, which, according to the above, would allow for a maximum of 21% if I am interpreting that correctly. Is that right?

Also, the sales price was just over $10K. IF I pay the full contract amount for the full term, I would be paying just over $16K for the car. Which, is more than 1/5 of the principal.

So, it seems to me that I may have legal grounds to get out of this contract. Is that correct?

Thank you.
 

seniorjudge

Senior Member
Sue them and find out.

Of course, something easier and cheaper would be to tell them you will renegotiate it to where it is legal.
 
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