Washington, D.C. Car Loan Laws

The District caps finance charges by the car's age, gives most buyers 30 days to catch up after a missed payment, and taxes cars at titling by weight and fuel economy.

Updated Oct 26, 2026 By Lenditia Editorial Team 7-minute read Right to cure

In short

D.C. law caps the finance charge on a car bought on installments at 21.5% for a new car and up to 28.33% for older used cars. After a missed payment on a dealer contract, the creditor may not speed up the debt, sue or go after the car for 30 days, and you can cure by paying what is past due. Instead of a sales tax, the District charges a titling excise tax of 1% to 11% of the car's fair market value, set by weight and fuel economy.

Right to cure: Yes: 30 days after default
Rate ceiling: 21.5% to 28.33%
Doc fee limit: No cap found
Vehicle sales tax: 1%–11% titling excise tax

Map of the United States with Washington, D.C. highlighted

Washington, D.C. car-finance rules at a glance

Washington, D.C. Right to cure Right to catch up on missed payments and keep the car Checked Oct 26, 2026

Right to cure: Yes: no acceleration, suit or repossession for 30 days after a payment default; D.C. Code §28-3812(b) covers consumer credit sales; direct motor vehicle loans under Title 28, ch. 36 are excluded.
Rate ceiling: 21.5% (new) to 28.33% (oldest used) APR by vehicle class; $25 charge always allowed; D.C. Code §50-602 for installment sales of motor vehicles; banks follow their own rules.
Doc fee limit: No cap found in the D.C. Code
After repossession: Redeem within 15 days or until sale; no deficiency if cash price was $2,000 or less; Self-help repossession must avoid a breach of the peace and, per §28-3812(d), have the debtor's consent.
Vehicle sales tax: None; titling excise tax of 1%–11% of fair market value by weight and mpg; Rates in effect since February 17, 2025; electric vehicles are no longer exempt.
Regulator: Department of Insurance, Securities and Banking (DISB)

How much interest a D.C. car contract can carry

When a dealer arranges your loan, you sign a retail installment contract. D.C. Code §50-602 sets the maximum finance charge on installment sales of motor vehicles: the larger of $25 or the rate for the car's class. The statute lets the Council change the schedule by regulation after public notice.

D.C. maximum finance charges on installment sales of motor vehicles, D.C. Code §50-602
Vehicle class	Maximum APR
Class 1: new car of the current model year (and new foreign cars)	21.5%
Class 2: other new cars and used cars up to two years old	23.5%
Class 3: used cars up to four years old	27%
Class 4: older used cars	28.33%

These are ceilings, not typical prices. Direct car loans from banks fall under a separate chapter of the D.C. Code (Title 28, chapter 36). Compare the APR on every offer and see what it means in dollars with the car payment calculator.

Fees and the titling excise tax in D.C.

Doc fee. We found no cap on dealer processing or doc fees in the D.C. Code. Ask for the amount up front and compare it between dealers.
No sales tax on the car. The DMV charges a titling excise tax instead, based on the car's fair market value from the NADA Guide, not on the price you paid.
Rates since February 17, 2025. The tax runs from 1% to 11% depending on unladen weight and city fuel economy. A car of 3,499 pounds or less that gets 20 mpg or less pays 9%; an electric car of the same weight pays 1%.
Electric cars. They are no longer exempt from the excise tax.

Your 30 days to catch up after a missed payment

D.C. Code §28-3812 covers consumer credit sales, which include a car bought on a dealer's installment contract. For 30 days after a payment default, the creditor may not accelerate the balance, sue you or proceed against the car because of that default. During that time you can cure by paying all past-due amounts plus any delinquency charges, and the contract continues as if you had not missed the payment.

The cure right ends once the creditor has given notice of acceleration, sued or moved against the car, so act early. The section does not cover direct motor vehicle installment loans made under Title 28, chapter 36, the chapter for loans made straight to the borrower rather than through the dealer.

Repossession and its limits in D.C.

Taking the car. Under §28-3812(d), a creditor may repossess without going to court only without a breach of the peace and, the statute adds, with the debtor's consent. Otherwise it must use the courts.
Redemption. You can redeem the car within 15 days after the creditor takes it, and after that until it is sold or contracted for sale, by paying what you owe plus reasonable repossession costs.
Sale. The creditor must sell the car in good faith and in a commercially reasonable way before it can sue for a deficiency.
Small sales. If the cash price was $2,000 or less, you are not personally liable for the unpaid balance after a repossession.

Our guides to repossession and falling behind on payments explain how to respond.

Where to check a lender and complain

The Department of Insurance, Securities and Banking oversees non-bank financial service providers in the District and runs a consumer complaints program. You can check a lender's license on NMLS Consumer Access.

Department of Insurance, Securities and Banking

Its Consumer Services Division takes complaints about lenders and other financial service providers.

D.C. Attorney General

Takes consumer protection complaints, including complaints about dealer practices.

Consumer Financial Protection Bureau

Takes complaints about any auto lender or servicer, including banks and finance companies.

Questions people ask

What is the maximum interest rate on a car loan in D.C.?

For installment sales of motor vehicles, D.C. Code §50-602 sets 21.5% for new current-model-year cars, 23.5% for other new cars and used cars up to two years old, 27% up to four years old and 28.33% for older cars.

Do I get time to catch up before my car is repossessed in D.C.?

On a dealer installment contract, yes. For 30 days after a payment default, the creditor may not accelerate, sue or go after the car, and you can cure by paying the past-due amount.

Is there sales tax on a car in D.C.?

No. You pay a titling excise tax of 1% to 11% of the car's fair market value, depending on weight and fuel economy.

Can I owe money after a repossession in D.C.?

Yes, if the car is sold for less than you owe and the creditor sold it in a commercially reasonable way. If the cash price was $2,000 or less, you are not personally liable.

Sources

Facts on this page were checked against these sources on October 26, 2026. The DMV's excise tax schedule by weight and fuel economy took effect on February 17, 2025.