What is the maximum late charge allowed under an installment sales contract in Virginia?

In Virginia, the maximum late charge allowed under an installment sales contract is set at 5% of the payment. This regulation aims to provide a balance between encouraging timely payments and acknowledging the costs incurred by sellers when payments are late. The law establishes this limit to prevent excessively punitive charges, ensuring that they remain reasonable and fair for consumers.

This percentage is derived from Virginia state law governing sales contracts, which ensures uniformity and predictability for both consumers and sellers. By adhering to this maximum, dealers can effectively manage their receivables while also providing protections for buyers against excessive late fees.