Civil Code § 1808.2 - California Law

When a subsequent purchase is made, the entire amount of all payments made previous thereto shall be deemed to have been applied toward the payment of the previous deferred payment price or deferred payment prices. Each payment thereafter received shall be deemed to be allocated to all of the various deferred payment prices in the same proportion or ratio as the original cash sale prices of the various purchases bear to one another; where the amount of each installment payment is increased in connection with the subsequent purchase, the subsequent payments (at the seller’s election) may be deemed to be allocated as follows: an amount equal to the original payment to

the previous deferred payment price, and an amount equal to the increase, to the subsequent deferred payment price. However, the amount of any initial or downpayment on the subsequent purchase shall be deemed to be allocated in its entirety to such purchase.

When a subsequent purchase under this section is made the seller shall deliver to the buyer, prior to the due date of the first installment, a memorandum which shall set forth the following:

(a)The names of the seller and the buyer, the place of business of the seller, the residence or place of business of the buyer as specified by the buyer and a description of the goods and services sufficient to identify them. Services or multiple items of goods may be described in general terms and may be described in detail in a separate writing.

(b)The cash price of the goods, services and

accessories which are the subject matter of the new retail installment sale.

(c)The amount of the buyer’s downpayment, itemizing the amounts paid in money and in goods and containing a brief description of the goods, if any, traded in.

(d)The difference between item (b) and item (c) which is the unpaid balance of cash price.

(e)The amount of the existing outstanding balance to be consolidated, which consists of the unpaid time balance or balances of the prior contract or contracts to be consolidated.

(f)The amount of any unearned finance charge, determined by deducting from the amount of item (e) any then unearned finance charge in an amount not less than the refund credit provided for in Article 6 (commencing with Section 1806.1) of this chapter

(computed, however, without the allowance of any minimum earned finance charge).

(g)The difference between items (e) and (f), which is the net outstanding balance to be consolidated.

(h)The amount, if any, included for insurance, specifying the coverages.

(i)The amount, if any, of official fees.

(j)The unpaid balance, which is the sum of items (d), (g), (h) and (i).

(k)The finance charge (1) expressed as the annual percentage rate as defined in Regulation Z and (2) expressed in dollars, and computed in conformity with Section 1808.5.

(l)The number, amount, and due dates or periods of payment scheduled to repay

the indebtedness and the sum of such payments.

(m)Any “balloon payments” as described in Section 1807.3.

The items need not be stated in the sequence or order set forth above; additional items may be included to explain the computations made in determining the amount to be paid by the buyer. If the finance charge or any portion thereof is calculated on the 365-day basis, the amount of the finance charge shown pursuant to item (k) shall be that amount which will be incurred by the buyer if all payments are received by the seller on their respective due dates.