(a) General rule.— A late charge may be collected on the following:

1. (1) An installment payment that is not paid on or before the due date of the payment.
2. (2) A contract subject to this chapter, regardless of the classification of vehicle under section 6243 (relating to finance charges) or the method by which the finance charge is computed.

(b) Rate and computation.—

1. (1) Under a contract for the sale of a motor vehicle other than a heavy commercial motor vehicle, a late charge may not, for any payment not made within ten days of its scheduled due date, exceed the rate of 2% on the amount of the payment in arrears.
2. (2) Under a contract for the sale of a heavy commercial motor vehicle, a late charge may not, for any payment not made within ten days of its scheduled due date, exceed the rate of 4% of the amount of the payment in arrears.
3. (3) The late charges under paragraphs (1) and (2) may be collected only once on each payment in arrears.

(c) Collection.—

1. (1) Late charges may be:

   1. (i) collected when earned during the term of a contract for the sale of a motor vehicle; or
   2. (ii) accumulated and collected at final maturity or at the time of final payment under a contract for the sale of a motor vehicle.
2. (2) A late charge may not be collected on a payment in default because of an acceleration provision in the contract.