The Regulation About Installment Sales ("The
Regulation") entered into force by being published in
the Official Gazette on 14th January 2015. Although the
title is 'installment sales'; the main subject of the
Regulation is financial leasing agreements. It is important to be
careful not to confuse the installment sales with the prepaid
sales. In prepaid sales the buyer have the possession of the sold
movable property after completing the payment. However in
installment sales the buyer gets the property immediately and then
makes the payment. Moreover the sales made by credit cards are not
the subject of this Regulation.
The installment sale agreement must be in writing and one of the
parties must be a consumer to apply this Regulation. The
requirement of written form is not the only condition for validity.
The seller must psychically deliver the agreement to the consumer
or provide a copy on a permanent data storage including sending the
agreement via e-mail.
The information below must be included in the
installment sale agreements;
The name, surname, contact information of the consumer,
The seller's, the provider's or lessor's name,
title, address, phone and other contact information, if any,
The date of the agreement,
The date of delivery of the goods or execution of the
The goods and services which are the subject of the
The cash price of the goods and service including the taxes in
The installment sale price of the goods and service including
the taxes in Turkish Liras,
The right of withdrawal of the consumer, how and when to use
The payment plan,
The information about the right of early payment of the
consumer, and if applied, the right of discount for the interest
and commission. In case of an early payment the interests and
commissions due after the early payment date shall not be
The interest amount, annual rate of interest (interest rate of
contract to apply because the installment sale) and default
interest rate which is not to exceed more than thirty per cent of
the interest rate of the contract,
The default of the consumer and its legal consequences,
The information that, the consumer has the right of apply to
arbitration committee for consumer problems and consumer court, in
case of dispute.
If the agreement provides the transfer of the ownership at the
end of the payments, the agreement must include also;
The conditions to transfer of the possession of the goods,
The conditions to transfer of the ownership of the goods if the
transfer will be not be immediately made,
The terms and conditions of transferring the payment liability
to a third party, if it is specified in the agreement,
Information on insurance liabilities, if it is specified in the
The right of withdrawal is one of the important points
of the installment sale. The consumer can withdraw from
the agreement within 7 days. This 7 - day begins on the date of
signing the agreement for the services and on the delivery for the
goods. The consumer can also use this right before delivery for the
goods. If there is an agreement with a mix of sale of goods and
services, withdrawal right terms for goods shall apply. The
consumer cannot use his withdrawal right if the execution of the
services starts within withdrawal right term with the approval of
the consumer. The consumers who apply directly to the seller do not
have a withdrawal right.
Upon exercise of withdrawal right, the seller shall refund the
payment made by the consumer and return other documents if any, and
the consumer shall return the goods within 7 days.
If the consumer is in default, the seller can demand the
rest of the payment under two circumstances:
If the consumer defaults in making the payment of two
consecutive installments and the total amount of such two
installments is equal to or more than 10% of the total of the
If the consumer defaults in making the payment of one
installment and such unpaid installment amount is equal to or more
than 25% of the total of the remaining installments
In order the seller to be entitled to demand the remaining
installments to be paid at once, such right as stipulated herein
shall be written in the agreement. The seller must give 30 days to
the buyer for the payment of defaulted amount before the seller
uses the right to demand the remaining installments. The interest
and the commissions that would have applied if the buyer were not
in default shall be deducted while calculating remaining the total
The seller can demand negotiable instruments such as checks and
promissory notes as a security for the total amount, but such
negotiable instruments shall be separately issued for every
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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