Buy here pay here in Utah: what you file before the first payment

The filing, step by step

Everything happens in NMLS: company account, MU1 (including a Utah agent for service of process), an MU2 per control person, then Checklist Compiler → Utah DFI Consumer Credit Notification → submit and pay. No call to DFI is required, and the downloadable DFI notification PDF is legacy — NMLS is the statutory path.

One trap: any certificate of existence or registration you upload must be purchased within 90 days of submission, and a certificate of registration is required for every DBA, with the assumed name an exact match to the DBA in NMLS. Name and address mismatches are the most common reason Utah filings bounce.

The disclosure that sits on the front page

Before any credit paperwork matters, §41-3-401 has to be right. It is an MVED rule, not a Consumer Credit Code rule — Title 70C has no front-page requirement. No temporary permit may issue and no vehicle may be released to a retail buyer unless the sale document carries, clearly and conspicuously on its first page, one of two statutory financing disclosures, executed by the purchaser.

On a true buy-here-pay-here deal — you are the lender, the sale is final at delivery — disclosure (2)(a) is the honest one. Disclosure (2)(b) is for arranging outside financing; it must also be signed by the seller and carries a 7-day notice duty and a 14-day buyer rescission right.

Sign (2)(a) on a deal actually conditioned on placing paper and §41-3-401(3)(a) gives the buyer a full refund of all money and the trade-in, with your recovery limited to mileage at the IRS rate and physical damage — plus §41-3-701 sanctions and attorney fees. The permit side of the rule: Utah dealer temporary permits.

What has to be inside the contract

• The Reg Z federal box (12 CFR 1026.18), grouped and segregated from everything else per 1026.17(a)(1), with APR and FINANCE CHARGE more conspicuous than the other terms, and Total Sale Price disclosed on a credit sale. You become a Reg Z creditor at more than 25 credit extensions a year (1026.2(a)(17)(v)) — a number a small buy-here-pay-here lot passes quickly.
• The FTC Holder Rule notice (16 CFR 433.2), in at least ten-point bold face type.
• The §455.3(b) sentence making the Buyers Guide part of the contract and superior to contrary terms — see the FTC Buyers Guide rules.
• The §70C-7-107 negative-credit notice, required before or within 30 days of furnishing information to a credit bureau, once per transaction. Failure means actual damages, costs and attorney fees; willful failure exposes up to double punitive damages.
• A class-action waiver, if you use one, is enforceable only when disclosed in bold or ALL CAPS (§70C-3-104).

Most small lots buy their retail installment contract forms rather than draft them; Independent Dealer Solutions in Midvale is one Utah vendor. Check any printed form against all five items above yourself, and ask whether Spanish forms exist — §455.5 still requires a Spanish Buyers Guide on a sale conducted in Spanish.

The terms Utah will not let you write

Utah has no APR cap (§70C-1-106), which surprises people — but it caps and bans plenty of other things:

• Late fee no greater than $30 or 5%, whichever is more, and once per installment (§70C-2-102).
• No prepayment penalty (§70C-3-101).
• Cash price $3,000 or less → no deficiency judgment after repossession, and suing forecloses repossessing (§70C-7-101).
• No negotiable instrument other than a check as evidence of the debt (§70C-2-204); no confession of judgment (§70C-2-201); wage assignments only if revocable (§70C-2-202); no pre-judgment garnishment of earnings (§70C-7-102).
• Attorney fees on default are allowed (§70C-2-105).
• A payment more than twice the average of the earlier ones gives the buyer a right to refinance (§70C-3-102) — the practical reading is: do not write balloons.
• Referral-sale rebates are prohibited and make the contract unenforceable by the seller (§70C-2-207).

Perfect your lien on the title, in the creditor's exact name — not with a UCC-1. Repossession runs on UCC §70A-9a-609 (no breach of the peace) and §70A-9a-611 (notice before disposition).

Tax now, credit later

Utah sales tax on a financed car is due on the full sale price at the time of sale — you remit all of it in the period of the sale while collecting it over 24 or 36 months. Plan that cash-flow hit before your first contract.

Repossess and resell, and Utah gives the tax back through a computed credit: (taxable base − down payment) × (unpaid months ÷ total contract months), less non-resale recoveries, at the rate in effect on the original sale date, claimed on your current return with an explanation attached. Balloons require a special computation — one more reason not to write them. Full chain: the Utah dealer sales tax guide.

The federal programs you now have to run

Extending credit makes a dealer a "financial institution" federally, which means programs, not just forms:

• FTC Safeguards Rule (16 CFR 314). Under 5,000 consumers you are excused from the written risk assessment, continuous monitoring, written incident-response plan and annual report — but not from naming a Qualified Individual, encryption in transit and at rest, multi-factor authentication, access controls, secure disposal, or staff training. Notify the FTC at 500 or more affected consumers within 30 days.
• FTC Red Flags Rule (16 CFR 681) — a written identity-theft prevention program.
• ECOA / Reg B — adverse-action notice when you decline an applicant.
• GLBA privacy notice at account opening.
• IRS Form 8300 on cash over $10,000, aggregating installment payments, a new form at each additional $10,000, and the customer statement by January 31.

Collecting your own paper

Collecting your own accounts requires no Utah registration and no collection bond: the old collection-agency registration and $10,000 bond were repealed by H.B. 20 effective 5/3/2023, and the Division of Corporations no longer registers collection agencies at all.

The survivor is §12-1-11, and it matters at drafting time: you may pass a collection fee to the debtor only if you place the debt with a third-party agency or licensed attorney and a written agreement with the debtor allows it — capped at the lesser of the amount owed the collector or 40% of principal. No clause in the contract means no recoverable collection fee on that deal, ever.

Keep the deal file complete on every financed car — a repossession two years out is litigated out of that folder. See the deal jacket checklist.

Payment histories are the part a spreadsheet loses first. DealerPronto's BHPH ledger keeps the schedule, the payments and the balance against the car and the customer, which is also what you need if a repossession ever has to be defended.

Questions dealers actually ask

Do I need a license to finance my own car sales in Utah?

Not a license — a notification. File a consumer credit notification with the Department of Financial Institutions through NMLS at least 30 days before your first financed deal, and pay $220 on the first filing ($100 statutory registration plus $120 NMLS processing). DFI issues no license number.

What happens if I miss the renewal window?

NMLS closes at 3:00 pm Mountain on December 31 and there is no reinstatement — you refile from scratch. Ignore any source that says January 31.

Can I charge a late fee, and how much?

Yes — no more than $30 or 5%, whichever is greater, and only once per installment (§70C-2-102). Utah also bans prepayment penalties and, on a cash price of $3,000 or less, bars a deficiency judgment after repossession.