Yo-Yo Financing

Yo-Yo financing is not legal in New Jersey. Car dealers must provide customers with a full and final loan agreement before allowing them to take possession of the vehicle. Violations of the New Jersey Consumer Fraud Act, the Truth-in-Consumer Contract, Warranty and Notice Act, and the Retail Installment Sales Act are illegal and are subject to civil and criminal penalties. It is important to note that a “spot delivery” or a “yo-yo sale”, where the customer is allowed to drive away with the car before the loan is finalized, is prohibited.

In New Jersey, anyone wishing to engage in the business of buying, selling, or dealing in motor vehicles must first obtain a license from the chief administrator. The New Jersey Automotive Sales Practices Regulations regulate the sale of vehicles and 2013 New Jersey Revised Statutes Title 39 outlines the requirements for obtaining a dealer's license, including eligibility, term, fee, and renewal. These laws ensure that any business involved in car sales in New Jersey is operating legally.