Indiana late charges on auto installment contracts

I'm trying to complete my understanding of what it means to apply the payment first to the most current payment due (for the purposes of determining late charges). Does that mean I don't have to apply it if the payment isn't due yet? For example, say the last installment was due September 15, and the money comes in October 5. We charge a late fee for the September payment. The October payment isn't due yet. So we apply the money to the September payment, not the October payment. Therefore, if our guy doesn't pay again until November 5, we can charge a late fee for the October payment. On the other hand, suppose the September 15 payment does not come until October 17. In that case, because the October payment is due, the payment gets applied there for the purpose of the late fee, and so there is no late charge for October no matter what. Do I have that right? Ugh!

Mike, if my response to your PM didn't answer your question, just let me know. However, your analysis is correct.