Answer:
Jim Bedsole
You can, but are not required to. This is true for the loan you described, but even true for a credit sale transaction where the creditor is the one receiving the downpayment. Refer to Reg Z section 1026.18(c), Official Staff Commentary to that section, and Appendix H-3 of Reg Z for specifics.
Answer:
Richard Insley
The nature of this loan is not clear. In order to answer the question with certainty, we need to know the relationship between the creditor and the seller of the automobile. The phrase "personal, vehicle loan" suggests that this is a direct extension of credit by a financial institution, not a "credit sale" as defined by Section 1026.2(a)(16).
Should this assumption be incorrect and, if fact, this is a "credit sale", then the creditor must disclose the "downpayment" and the "total sale price" (as defined in Section 1026.18(j).) Model Form H-1 would be the preferred way to present these disclosures.
I don't disagree with Jim's conclusion that direct lenders can optionally disclose the downpayment when financing the purchase of an automobile, but you cannot use Model Form H-1 for that purpose (because this is not a "credit sale") and you must invent language and a format for your itemization. Model Form H-3 is not helpful because it does not show an appropriate way to itemize a downpayment. Likewise, it's unlikely that your loan document generation system provides canned language and format to deliver unnecessary information in a compliant manner. Why would you want to increase the time and cost of making a disclosure and the likelihood of violations--only to disclose something that is not required?
Answer:
Jim Bedsole
And my comment about the downpayment not needing to be disclosed solely was in reference to the itemization requirement of 1026.18(c) where even in a credit sale transaction there is no requirement to include the downpayment here. Richard is correct though, that the downpayment would be required to be disclosed separately as part of 1026.18(j) disclosure of Total Sale Price for a credit sale transaction.
Answer:
Richard Insley
So...the short form answer would appear to be that the downpayment never needs to be disclosed as part of the Itemization of the AF because it is neither a disbursement of proceeds nor a Prepaid Finance Charge. Optionally, it could be included in an Itemization in the following manner:
a. Vehicle sale price: $$$
b. Downpayment: $$$
c. Amount borrowed (a. minus b.) = $$$
d. Prepaid FC: $$$
e. Amount Financed (c. minus d.) = $$$
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