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HB 5460

AN ACT RELATING TO AERONAUTICS -- UNIFORM AERONAUTICAL REGULATORY ACT

2025 Regular Session Introduced by Marvin Abney and 6 co-sponsors

Allows unequal monthly payments for new vehicle installment contracts under limits, with buyer protections and required notices.

06/24/2025 Signed by Governor
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WeVote Research Nonpartisan
Bill Summary · HB 5460

Summary — HB 5460 / Public Act 94 of 2024

Subject: Motor Vehicle Sales Finance Act — retail installment (motor vehicle) sale contracts
Enacted: Public Act 94 of 2024 (effective July 23, 2024)
Statutory authority amended: 1950 (Ex Sess) PA 27 — Motor Vehicle Sales Finance Act (MCL 492.102 et seq.) — sections 2, 12, 13, 22 & 31

Main purpose

To permit a new financing option in retail motor-vehicle installment contracts by allowing a schedule of monthly payments in unequal amounts under specified limits, while protecting buyers from certain fees tied to that payment structure.

Key provisions

  • Allows unequal monthly payments for installment sale contracts of new motor vehicles when both conditions are met:
    • No scheduled payment increases by more than 40% from the first scheduled payment; and
    • Each scheduled payment does not exceed the buyer’s “maximum payment threshold,” as determined by the seller or finance company at the time the contract is completed.
  • Requires a prominent consumer notice (12-point type or larger) printed directly below the Federal Truth-in-Lending disclosure on all installment contracts for new motor vehicles:
    • "Notice: Customer should review the payment schedule to determine if the contract requires payments in equal amounts."
  • Prohibits licensed installment sellers and sales finance companies from charging:
    • Any fee based solely on the fact that a contract uses unequal payment amounts instead of equal payments; and
    • A fee related to prepayment of the entire unpaid time balance that is imposed because the vehicle is resold.
  • Clarifies definitions in the Motor Vehicle Sales Finance Act, including the terms “new motor vehicle” and “used or secondhand motor vehicle” as applicable to these provisions.

Who is affected

  • Primary: consumers buying new motor vehicles under installment contracts in Michigan.
  • Regulated parties: licensed installment sellers, sales finance companies, and licensed financial institutions that originate or hold vehicle installment contracts.
  • Indirect: auto dealers and manufacturers who participate in contract structuring or financing.

Procedural / timeline notes

  • Introduced in the House: Feb 21, 2024 (Rep. Alabas Farhat).
  • Passed House (with substitute H‑3): May 23, 2024; passed Senate: June 26, 2024.
  • Presented to Governor and approved: July 23, 2024.
  • Filed with Secretary of State and assigned Public Act No. 94 of 2024 — effective immediately on July 23, 2024.

Fiscal impact

  • Nonpartisan analyses reported no fiscal impact on state or local government.

Context / expected impact

Supporters argued the change increases flexibility in designing payment schedules (a practice allowed in many other states), potentially expanding access to vehicle ownership. The statutory limits (40% cap and the buyer’s maximum payment threshold) and the fee prohibitions aim to balance flexibility with consumer protections.

Compiled from official sources — confirm details with the bill’s official record.

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