Legal Question in Administrative Law in Virginia

It really depends upon what the financing agreement (contract) says. Ask them to send you or point you to the part of the contract that talks about this.

Was the payment late? Or was it a previous payment that was late?

It does not make sense to me if they received a late payment, imposed a NEW late fee at that time, and then applied the late fee FIRST. I think they must apply the money to the basic payment first.

It is possible (likely) that the financing agreement (contract) says that they will apply any payment to the OLDEST outstanding bill first.

However, if the car payment for March was due on March 1, and THEN a late fee is imposed becasue the regular monthly payment is late, the regular monthly car payment is OLDER than the late fee. The late fee was not imposed until AFTER March 1, when the March 1 payment was not made on time, and therefore late.

Since the payment cannot be late on the day it is due, the late fee has to arise AFTER the due date of the basic, regular, monthly car payment.

Therefore, the money would have to be applied first to the regular monthly payment, and the late fee collected later.

But this is based on my guess that the contract says to apply money to the oldest outstanding bill first.

You will need to find what in the contract talks about this question.