"hate the thought of paying tax on income not yet received"

If this is a "buy here/pay here" finance, then you are not thinking it through properly.

He lists the Sale, and then Lends them the principal. The repayment is principal + interest and only that interest is the new income. The sale of the vehicle is Income; you have a condition of how the customer Paid.

And that's why the principal payments are not the income.

Hope that helps.