SECTIONS 1808.1-1808.5

1808.1.  A retail installment contract, which otherwise conforms tothe requirements of this chapter, may contain the provision that theseller may at his option add subsequent purchases made by the buyerto the contract, and that the total price of the goods or servicescovered by the contract shall be increased by the price of suchadditional goods or services, and that all finance charges andinstallment payments may at the seller's option be increasedproportionately, and that all terms and conditions of the contractshall apply equally to such additional goods or services. Thecontract may also provide that the goods purchased under the previouscontract or contracts shall be security for the goods purchasedunder the subsequent contract but only until such time as the totalof payments under the previous contract or contracts is fully paid.1808.2.  When a subsequent purchase is made, the entire amount ofall payments made previous thereto shall be deemed to have beenapplied toward the payment of the previous deferred payment price ordeferred payment prices. Each payment thereafter received shall bedeemed to be allocated to all of the various deferred payment pricesin the same proportion or ratio as the original cash sale prices ofthe various purchases bear to one another; where the amount of eachinstallment payment is increased in connection with the subsequentpurchase, the subsequent payments (at the seller's election) may bedeemed to be allocated as follows: an amount equal to the originalpayment to the previous deferred payment price, and an amount equalto the increase, to the subsequent deferred payment price. However,the amount of any initial or downpayment on the subsequent purchaseshall be deemed to be allocated in its entirety to such purchase. When a subsequent purchase under this section is made the sellershall deliver to the buyer, prior to the due date of the firstinstallment, a memorandum which shall set forth the following: (a) The names of the seller and the buyer, the place of businessof the seller, the residence or place of business of the buyer asspecified by the buyer and a description of the goods and servicessufficient to identify them. Services or multiple items of goods maybe described in general terms and may be described in detail in aseparate writing. (b) The cash price of the goods, services and accessories whichare the subject matter of the new retail installment sale. (c) The amount of the buyer's downpayment, itemizing the amountspaid in money and in goods and containing a brief description of thegoods, if any, traded in. (d) The difference between item (b) and item (c) which is theunpaid balance of cash price. (e) The amount of the existing outstanding balance to beconsolidated, which consists of the unpaid time balance or balancesof the prior contract or contracts to be consolidated. (f) The amount of any unearned finance charge, determined bydeducting from the amount of item (e) any then unearned financecharge in an amount not less than the refund credit provided for inArticle 6 (commencing with Section 1806.1) of this chapter (computed,however, without the allowance of any minimum earned financecharge). (g) The difference between items (e) and (f), which is the netoutstanding balance to be consolidated. (h) The amount, if any, included for insurance, specifying thecoverages. (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 rateas defined in Regulation Z and (2) expressed in dollars, andcomputed in conformity with Section 1808.5. (l) The number, amount, and due dates or periods of paymentscheduled 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 forthabove; additional items may be included to explain the computationsmade in determining the amount to be paid by the buyer. If thefinance charge or any portion thereof is calculated on the 365-daybasis, the amount of the finance charge shown pursuant to item (k)shall be that amount which will be incurred by the buyer if allpayments are received by the seller on their respective due dates.1808.3.  If a credit sale is one of a series of transactions madepursuant to an agreement providing for the addition of the amountfinanced plus the finance charge for the current sale to an existingoutstanding balance, and the disclosures required under this articlefor the initial sale and each subsequent sale are delayed until somedate prior to the date the first payment for that particular sale isdue; and (1) The customer has approved in writing both the annualpercentage rate or rates and the method of treating any unearnedfinance charge on an existing outstanding balance in computing thefinance charge or charges; and (2) The seller retains no security interest in any property as towhich he has received payments aggregating the amount of the saleprice including any finance charges attributable thereto; then, forthe purposes of this section, in the case of items purchased ondifferent dates, the first purchased shall be deemed first paid for,and in the case of items purchased on the same date the lowest pricedshall be deemed first paid for. When a credit sale under this section is made, the seller shalldeliver 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 businessof the seller, the residence or place of business of the buyer asspecified by the buyer and a description of the goods and servicessufficient to identify them. Services or multiple items of goods maybe described in general terms and may be described in detail in aseparate writing. (b) The cash price of the goods, services and accessories whichare the subject matter of the new retail installment sale. (c) The amount of the buyer's downpayment, itemizing the amountspaid in money and in goods and containing a brief description of thegoods, if any, traded in. (d) The difference between item (b) and item (c), which is theunpaid balance of cash price. (e) The amount, if any, included for insurance, specifying thecoverages. (f) The amount, if any, of official fees. (g) The amount financed, which is the sum of items (d), (e) and(f). (h) The amount of the finance charge (1) expressed as the annualpercentage rate as defined in Regulation Z and (2) expressed indollars, which is to be computed in accordance with this chapter. (i) The deferred payment price, which is the sum of the amountsdetermined under items (b), (e), (f) and (h). (j) The previous balance, which is the amount owing on priorpurchases. (k) The number, amount, and due dates or periods of paymentsscheduled to repay the indebtedness and the sum of such payments. (l) Any "balloon payments," as described in Section 1807.3. The items need not be stated in the sequence or order set forthabove; additional items may be included to explain the computationsmade in determining the amount to be paid by the buyer. If thefinance charge or any portion thereof is calculated on the 365-daybasis, the amount of the finance charge shown pursuant to item (h)shall be that amount which will be incurred by the buyer if allpayments are received by the seller on their respective due dates.1808.4.  Until the seller delivers to the buyer the memorandum asprovided in Sections 1808.2 and 1808.3, the buyer shall be obligatedto pay only the cash price of the subsequent purchase.1808.5.  Subject to the other provisions of Article 5 (commencingwith Section 1805.1), the finance charge to be included in aconsolidated total of payments under subdivision (l) of Section1808.2 shall be determined by applying the finance charge at theapplicable rate to the unpaid balance under subdivision (j) ofSection 1808.2, for the period from the date of the consolidation toand including the date when the final installment of the consolidatedtotal is payable.