# Financing your own sales in Arizona: the DIFI license for buy here pay here dealers > Arizona BHPH dealers need a DIFI sales finance license once contracts top $50,000. Renewal is due December 31; late fees stop at 5% of the installment. - Canonical URL: https://www.leftlanesoftware.com/blog/arizona-buy-here-pay-here-financing-rules - Language: en-US - Spanish version (Español): https://www.leftlanesoftware.com/blog/financiamiento-propio-en-arizona-reglas-bhph - State: Arizona - Topic: In-house financing - Last verified: 2026-11-09 _Last verified: November 9, 2026. Every rule links to its official source._ Arizona buy here pay here dealers need a sales finance company license from the Department of Insurance and Financial Institutions (DIFI) once their contracts [exceed $50,000](https://www.azleg.gov/ars/44/00281.htm) in total outstanding balances. The application is [$500](https://www.azleg.gov/ars/6/00126.htm), and renewal is due [every December 31](https://www.azleg.gov/ars/44/00282.htm). Section 44-291 sets no numeric rate cap on these contracts, and late charges stop at 5 percent of the unpaid installment. ## Arizona buy here pay here rules at a glance | What | The rule | Source | | ---------------- | --------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------- | | License | Sales finance company license from DIFI, applied for through NMLS | [DIFI: Sales Finance Companies](https://difi.az.gov/sales-finance-companies-dfi) | | When you need it | Your retail installment contracts "exceed a total aggregate outstanding indebtedness of $50,000" | [A.R.S. 44-281](https://www.azleg.gov/ars/44/00281.htm) | | When you do not | You create contracts and assign them to third-party lenders or financial institutions | [A.R.S. 44-281](https://www.azleg.gov/ars/44/00281.htm) | | Fees | $500 application; $250 per branch application; renewal $500 plus $200 per branch | [A.R.S. 6-126](https://www.azleg.gov/ars/6/00126.htm) | | Renewal | On or before December 31 each year; $25 a day late; expires if not renewed within 30 days after that date | [A.R.S. 44-282](https://www.azleg.gov/ars/44/00282.htm) | | Finance charge | Interest "not to exceed the maximum rate set by contract"; no Rule of 78s rebates | [A.R.S. 44-291](https://www.azleg.gov/ars/44/00291.htm) | | Late charge | Up to 5% of the unpaid installment, on an installment not paid in full on the 10th day after its due date | [A.R.S. 44-291](https://www.azleg.gov/ars/44/00291.htm) | | Contract | Itemized terms plus a bold statement of DIFI's phone number and address next to the signature line | [A.R.S. 44-287](https://www.azleg.gov/ars/44/00287.htm) | | Documentary fee | No dollar cap found; your ads must say a doc fee will be charged | [A.R.S. 44-1371](https://www.azleg.gov/ars/44/01371.htm) | ## Do you need a license to run buy here pay here in Arizona? Yes, once your book passes $50,000. Arizona's definition of a sales finance company includes a person "creating or holding retail installment contracts that exceed a total aggregate outstanding indebtedness of $50,000" ([A.R.S. 44-281](https://www.azleg.gov/ars/44/00281.htm)). [Section 44-282](https://www.azleg.gov/ars/44/00282.htm) bars doing that business without the license. The test is the total still owed on your contracts, not a count of deals. A lot that carries its own notes should apply before its balances approach $50,000, not after. ADOT's [dealer license page](https://www.azdot.gov/mvd/services/professional-services/dealer-services-and-licensing/motor-vehicle-dealer-licensing/dealer-license-types) says buy here pay here dealers "should also contact" DIFI, at 602-771-2800. The license reaches past the dealership: - **A finance company that buys your contracts.** A person "purchasing retail installment contracts from one or more retail sellers" is a sales finance company, so a related company needs its own license. - **Anyone you sell contracts to.** "A motor vehicle dealer shall not sell or transfer any contract to a person in this state not licensed" under the sales finance chapter (44-282). **Who is left out.** The definition excludes a motor vehicle dealer "who creates retail installment contracts and assigns the retail installment contracts to third-party lenders or financial institutions." The statute states no time limit for that assignment. **Lender financing has its own ADOT fee.** A dealer with a third-party lender relationship pays a $400 dealer license fee instead of $100, and $250 instead of $100 at each annual continuation ([A.R.S. 28-4302](https://www.azleg.gov/ars/28/04302.htm)). The DIFI license is separate from the [ADOT dealer license](/blog/arizona-dealer-license-step-by-step); the whole path is in [How to start a used car dealership in Arizona](/blog/how-to-start-a-used-car-dealership-in-arizona). ## How do you apply for a DIFI sales finance license, and what does it cost? You apply through NMLS, the online licensing system DIFI has used for sales finance companies since July 1, 2017. The application is in writing and under oath, and it names the owners, partners, directors, officers and branch offices ([A.R.S. 44-282](https://www.azleg.gov/ars/44/00282.htm)). [DIFI's page](https://difi.az.gov/sales-finance-companies-dfi) lists the filings: form MU1 for the company, MU2 for each control person and MU3 for each branch. | Fee | Amount | Source | | ------------------------- | -------------------------------------- | ------------------------------------------------------- | | Application | $500 | [A.R.S. 6-126](https://www.azleg.gov/ars/6/00126.htm) | | Branch office application | $250 each | [A.R.S. 6-126](https://www.azleg.gov/ars/6/00126.htm) | | Annual renewal | $500, plus $200 for each branch office | [A.R.S. 6-126](https://www.azleg.gov/ars/6/00126.htm) | | Late renewal | $25 a day | [A.R.S. 44-282](https://www.azleg.gov/ars/44/00282.htm) | DIFI's web page also lists a first-year license fee prorated by quarter. That schedule is built on the old July 1 to June 30 license year, so confirm any first-year amount with DIFI before you pay. ## When is the Arizona sales finance renewal due? On or before December 31 every year. The next deadline is December 31, 2026. House Bill 2054, enacted as [Laws 2025, chapter 222](https://www.azleg.gov/legtext/57leg/1R/laws/0222.htm) and approved June 25, 2025, moved the renewal to December 31. It applies retroactively from after December 31, 2024, and current licensees renewed by December 31, 2025 under the new date. | When | What happens | Source | | ------------------------------ | ---------------------------------------------------------------------------------- | ------------------------------------------------------- | | On or before December 31 | Renewal application and fees are due | [A.R.S. 44-282](https://www.azleg.gov/ars/44/00282.htm) | | After December 31 | "A penalty of $25 per day" | [A.R.S. 44-282](https://www.azleg.gov/ars/44/00282.htm) | | 30 days after the renewal date | "Licenses not renewed within thirty days after their license renewal date expire." | [A.R.S. 44-282](https://www.azleg.gov/ars/44/00282.htm) | DIFI's own [sales finance page](https://difi.az.gov/sales-finance-companies-dfi) still shows the old calendar: a July 1 to June 30 license year with renewals from May 1 to June 30. Follow the statute. **Two licenses, two dates.** If you also hold a sales finance license, the dealer license statute lets the department that licensed you first set your dealer license continuation date ([A.R.S. 28-4405](https://www.azleg.gov/ars/28/04405.htm)). Ask ADOT and DIFI how the two dates line up now that DIFI renews on December 31. ## What happens if you finance without the license? The license is a legal duty once your contracts pass $50,000. This guide does not cover DIFI's enforcement powers against an unlicensed sales finance company, so ask DIFI or Arizona counsel what exposure you would face. Two rules in the same chapter are often misread: - **The "void" rule is narrower than some guides say.** The void provision in [A.R.S. 44-291(H)](https://www.azleg.gov/ars/44/00291.htm) covers only a "secondary motor vehicle finance transaction", the title-loan type. It does not reach an ordinary buy here pay here retail installment contract. - **Willful contract violations cost you the charges.** A person "wilfully violating any provision of this chapter relating to the provisions of a contract shall not receive or retain any finance, delinquency or collection charge on the contract" ([A.R.S. 44-295](https://www.azleg.gov/ars/44/00295.htm)). ## How much can you charge on a buy here pay here contract in Arizona? Section 44-291 sets no numeric cap for an ordinary retail installment contract. It allows "interest not to exceed the maximum rate set by contract" ([A.R.S. 44-291](https://www.azleg.gov/ars/44/00291.htm)). The percentage caps in the same section apply to a different product. | Contract type | What 44-291 allows | | ------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------- | | Retail installment contract (a buy here pay here note) | Interest "not to exceed the maximum rate set by contract" | | Secondary motor vehicle finance transaction (title-loan type) | Monthly caps of 17% up to $500; 15% over $500 to $2,500; 13% over $2,500 to $5,000; 10% over $5,000. The annual rate must be conspicuously disclosed | Arizona monthly rate caps you may see quoted belong to the second row. Three more rules in 44-291 apply to your contracts. - **Late charge.** Allowed on "each installment not paid in full on the tenth day after its due date", up to "five per cent of the unpaid balance of the installment". - **Prepayment rebates.** A rebate of an unearned precomputed finance charge may not be computed by the Rule of 78s, an older method that returns less of the charge early in the term. - **Day count.** The finance charge may be computed on a 360, 365 or 366-day year. Card and ACH payments are built into LeftLane and post to the customer's account on their own. Reminder texts go out on the due date and after a missed payment, each with a payment link. You can [try it on your own accounts](https://sandbox.leftlanesoftware.com/signup). ## What must an Arizona retail installment contract include? [A.R.S. 44-287](https://www.azleg.gov/ars/44/00287.htm) lists the contents: - The cash price, the down payment and the unpaid balance. - Insurance charges. If the insurance does not include liability coverage, the contract must say so "in capital letters" above the signatures. - The final cash price balance. - The finance charge and the rate. - The time balance, with the number, amount and due dates of the installments. - A statement "in bold-faced type, setting forth the telephone number and address" of DIFI for complaints, next to the signature line (44-287(B)(8)). Two more statements belong in the sale paperwork: - **The used-car warranty statement.** The sale agreement "is voidable at the option of the purchaser" unless it carries the [A.R.S. 44-1267](https://www.azleg.gov/ars/44/01267.htm) warranty statement in "bold-faced ten point or larger type set off from the body". The warranty runs 15 days or 500 miles, whichever comes first. Details are in [After the sale in Arizona](/blog/arizona-dealer-after-the-sale-and-inspections). - **Broker fee disclosure.** A retail contract must state "Whether or not the transaction is subject to a fee received by a broker" and the broker's name ([A.R.S. 28-4417](https://www.azleg.gov/ars/28/04417.htm)). **GAP, service contracts and credit insurance.** This guide did not verify Arizona's rules for selling these with a contract. Have Arizona counsel review them, and your contract template, before you use them. ## Is there a doc fee cap in Arizona, and what about spot deliveries? Arizona law sets no dollar cap on a documentary fee that we found. A dealer that charges one "must clearly and conspicuously disclose in its advertisement for a motor vehicle that a document fee will be charged" ([A.R.S. 44-1371](https://www.azleg.gov/ars/44/01371.htm)). Ask your tax adviser whether TPT applies to the fee. **Spot deliveries.** If a sale is "conditioned on final approval of financing", you keep the traded vehicle's title and possession "until financing is finally approved or the traded motor vehicle is returned to the customer" (44-1371). Those remedies "may not be waived, modified or limited by agreement or contract". The statute states no deadline for getting the financing approved. ## How does sales tax work on a financed sale in Arizona? Arizona taxes vehicle sales through the transaction privilege tax (TPT), which the dealer reports and pays to the Arizona Department of Revenue (ADOR). The [state rate is 5.6 percent](https://azdor.gov/sites/default/files/document/TPT_RATETABLE_11012026.pdf) before county and city tax. On credit sales you can ask to pay the tax as you collect. A seller with cash and credit sales must report them separately and "may apply for and obtain from the department an extension of time to pay taxes due on the credit sales" ([A.R.S. 42-5014](https://www.azleg.gov/ars/42/05014.htm)). You then report collections monthly and pay the tax as collected. Ask ADOR how to apply; this guide did not verify that process. How TPT treats bad debts and repossessed vehicles is a question for your tax adviser. City rates and return due dates are in [After the sale in Arizona](/blog/arizona-dealer-after-the-sale-and-inspections). ## What are the Arizona repossession rules? After default, you may take the vehicle "Without judicial process, if it proceeds without breach of the peace" ([A.R.S. 47-9609](https://www.azleg.gov/ars/47/09609.htm)). The statute does not say what counts as a breach of the peace; set rules for your recovery agent with counsel. Before you resell a repossessed vehicle that is consumer goods (bought for personal, family or household use), your notice must include ([A.R.S. 47-9614](https://www.azleg.gov/ars/47/09614.htm)): 1. The information section 47-9613 lists. 2. "A description of any liability for a deficiency". 3. A phone number to call for the amount needed to redeem the vehicle. 4. A phone number or address for more information. The section includes a model form, "NOTICE OF OUR PLAN TO SELL PROPERTY". We found no Arizona statute on a right to cure, repossession agent licensing or GPS and starter-interrupt devices; treat those, and redemption and deficiency rules, as questions for Arizona counsel. LeftLane produces repossession reports and Metro 2 credit reporting files from live data, and each finance account keeps an activity log of payments, adjustments and status changes. ## Who examines an Arizona sales finance company, and what records do you keep? DIFI examines licensed sales finance companies as often as the Superintendent decides, and bills for it: up to $65 per hour for each examiner. An assessment not paid within 30 days adds $50 a day, up to the amount of the assessment ([DIFI: Sales Finance Companies](https://difi.az.gov/sales-finance-companies-dfi)). ADOT's rules cover the same deal files: a copy of each customer contract kept "for three years" at your established place of business, and a permanent record of every vehicle you buy, sell or exchange ([A.R.S. 28-4403](https://www.azleg.gov/ars/28/04403.htm)). The other agencies that can inspect you are in [After the sale in Arizona, and who can inspect you](/blog/arizona-dealer-after-the-sale-and-inspections). ## What trips people up - **Waiting until you pass $50,000.** The license is required once your balances exceed it. Apply before your book gets there. - **Planning on DIFI's old calendar.** Renewal is due December 31, late days cost $25 each, and an unrenewed license expires 30 days after the renewal date. - **Leaving the DIFI statement off the contract.** It must be in bold next to the signature line, and a willful violation of the chapter's contract rules costs every finance, delinquency and collection charge on that contract. - **Selling your paper to an unlicensed buyer.** A dealer may not sell or transfer a contract to a person in Arizona who lacks the sales finance license. - **Charging the late fee too early or too high.** It applies to an installment not paid in full on the 10th day after its due date, and stops at 5 percent of the unpaid installment. - **Using Rule of 78s rebates.** The statute bars them for prepayment rebates. - **Advertising without the doc fee line.** If you charge a document fee, your vehicle ads must say one will be charged. - **Letting go of a trade-in on a spot delivery.** Keep its title and the vehicle until financing is final or you return it. ## What changed recently - **December 31, 2026.** The next sales finance renewal deadline. - **December 31, 2025.** Current licensees renewed under the new December 31 date. - **June 25, 2025.** House Bill 2054 moved the sales finance renewal to December 31 each year, retroactive from after December 31, 2024. ## Frequently asked questions ### Do I need a license to do buy here pay here in Arizona? Yes, once the retail installment contracts you create or hold exceed $50,000 in total outstanding balances. The license is a sales finance company license from the Department of Insurance and Financial Institutions (DIFI), applied for through NMLS. A dealer that creates contracts and assigns them to third-party lenders or financial institutions is excluded. ### What is the maximum interest rate on an Arizona buy here pay here contract? Section 44-291 sets no numeric cap for an ordinary retail installment contract. It allows interest up to the maximum rate set by contract. The monthly caps of 17, 15, 13 and 10 percent in the same section apply only to secondary motor vehicle finance transactions, the title-loan type, not to a buy here pay here note. ### How much can an Arizona dealer charge for a late payment? Up to 5 percent of the unpaid balance of the installment, and only on an installment not paid in full on the 10th day after its due date, under A.R.S. 44-291. A willful violation of the chapter's contract rules costs the dealer every finance, delinquency and collection charge on that contract. ### When is the Arizona sales finance license renewal due? On or before December 31 each year, under House Bill 2054 (Laws 2025, chapter 222). The next deadline is December 31, 2026. A late renewal costs $25 a day, and a license not renewed within 30 days after the renewal date expires. DIFI's web page still shows the old July to June calendar. ### Does Arizona's "void contract" rule apply to buy here pay here? The void provision in A.R.S. 44-291(H) covers secondary motor vehicle finance transactions, the title-loan type, not ordinary retail installment contracts. That does not make financing without a license safe: the license is required once your contracts exceed $50,000. Ask DIFI or Arizona counsel what exposure you would face. ### Is there a cap on doc fees in Arizona? Arizona law sets no dollar cap on a documentary fee that we found. A dealer that charges one must clearly and conspicuously disclose in its vehicle advertising that a document fee will be charged, under A.R.S. 44-1371. Whether TPT applies to the fee is a question for your tax adviser. ### Can I repossess a car without going to court in Arizona? Yes, after default, if you proceed without a breach of the peace, under A.R.S. 47-9609. Before reselling a consumer's vehicle, your notice must include the items in 47-9614, among them any deficiency liability and a phone number for the redemption amount. Ask Arizona counsel about cure, redemption and deficiency questions. ## Your next step Before your first financed sale, put the contract, the signatures, the payments and the reminders in one system. In LeftLane, card and ACH payments post on their own, reminder texts carry a payment link, and each account keeps an activity log. [Start a free trial](https://sandbox.leftlanesoftware.com/signup) and call 512-222-9549; a real person will help you set it up. ## Sources - [DIFI: Sales Finance Companies](https://difi.az.gov/sales-finance-companies-dfi) - [Arizona Laws 2025, chapter 222 (House Bill 2054)](https://www.azleg.gov/legtext/57leg/1R/laws/0222.htm) - Sales finance statutes: [A.R.S. 44-281](https://www.azleg.gov/ars/44/00281.htm), [44-282](https://www.azleg.gov/ars/44/00282.htm), [44-287](https://www.azleg.gov/ars/44/00287.htm), [44-291](https://www.azleg.gov/ars/44/00291.htm) and [44-295](https://www.azleg.gov/ars/44/00295.htm) - [A.R.S. 6-126: DIFI fees](https://www.azleg.gov/ars/6/00126.htm) - Consumer statutes: [A.R.S. 44-1267, used-car implied warranty](https://www.azleg.gov/ars/44/01267.htm) and [44-1371, document fees and spot deliveries](https://www.azleg.gov/ars/44/01371.htm) - Dealer statutes: [A.R.S. 28-4302](https://www.azleg.gov/ars/28/04302.htm), [28-4403](https://www.azleg.gov/ars/28/04403.htm), [28-4405](https://www.azleg.gov/ars/28/04405.htm) and [28-4417](https://www.azleg.gov/ars/28/04417.htm) - [ADOT: Dealer License Types](https://www.azdot.gov/mvd/services/professional-services/dealer-services-and-licensing/motor-vehicle-dealer-licensing/dealer-license-types) - [A.R.S. 42-5014: credit sales](https://www.azleg.gov/ars/42/05014.htm) and [ADOR: TPT rate table effective November 1, 2026](https://azdor.gov/sites/default/files/document/TPT_RATETABLE_11012026.pdf) - Repossession: [A.R.S. 47-9609](https://www.azleg.gov/ars/47/09609.htm) and [47-9614](https://www.azleg.gov/ars/47/09614.htm) _This guide is general information for dealers, not legal advice. Rules and fees change. Confirm with the agency or a licensed attorney in your state before you act._