Financing your own sales in New Jersey: the motor vehicle installment seller license
Last verified: November 9, 2026. Every rule links to its official source.
To finance your own sales in New Jersey you need a second license: the Motor Vehicle Installment Seller license from the Department of Banking and Insurance (DOBI), on top of your MVC dealer license. The paper application costs $300, non-refundable. Every license expires June 30, 2027 and renews online at no fee, and an annual report is due May 1.
New Jersey in-house financing at a glance
| What | The rule | Source |
|---|---|---|
| License | Motor Vehicle Installment Seller, required when an MVC-licensed dealer signs retail installment sales contracts | DOBI: installment seller license |
| Application | Paper; $300 non-refundable; a financial statement, a copy of your MVC license and a New Jersey office | DOBI application |
| Expiration | Every license expires June 30, 2027; online renewal, no fee | DOBI FAQ |
| Annual report | Due May 1 under N.J.A.C. 3:23-4.1, even with no business | DOBI FAQ |
| Financing without the license | Up to $1,000 per offense | N.J.S.A. 17:16C-55 |
| Finance charge | Retail Installment Sales Act: as agreed with the buyer on motor vehicles, no maximum | N.J.S.A. 17:16C-41 |
| Late charge | Retail Installment Sales Act: “not to exceed $10”, after 10 days in default, once per installment | N.J.S.A. 17:16C-42 |
| The Act’s reach | Goods are defined by a cash price of $10,000 or less; ask counsel about cars priced higher | N.J.S.A. 17:16C-1 |
Who needs a New Jersey motor vehicle installment seller license?
Any MVC-licensed dealer that signs retail installment sales contracts. DOBI says the license “is required if a New Jersey automobile dealer that is properly licensed as a dealer with the New Jersey Motor Vehicle Commission” executes retail installment sales contracts for new or used vehicles (DOBI). If buyers will sign an installment contract with your dealership, even one a lender buys, ask DOBI whether you need the license.
The Retail Installment Sales Act (RISA) defines a “motor vehicle installment seller” as a licensed dealer that sells or offers to sell a car under a retail installment contract (N.J.S.A. 17:16C-1). Section 17:16C-2 bars that business “without first obtaining a license from the commissioner”, with no exemption for a dealer that keeps its own paper.
It comes after the MVC dealer license, because DOBI’s application asks for a copy. The New Jersey startup path shows where it fits.
What if a separate company buys your contracts?
On the statute’s plain text, it needs its own DOBI license unless one company wholly owns the other. A company that buys or arranges the purchase of a dealer’s contracts is a “sales finance company” under 17:16C-1(f), and 17:16C-2 requires it to be licensed.
The definition covers contracts bought “from a retail seller which is not wholly owned by or does not wholly own such person”. A sister company owned by the same people, where neither owns the other outright, is not within that exception on the statute’s plain text. Ask New Jersey counsel, or DOBI in writing, before a related company buys a single contract.
How do you apply for the DOBI license, and what does it cost?
On paper, with a $300 company check or money order payable to “Treasurer, State of New Jersey”. DOBI’s FAQ says: “The non-refundable application fee is $300 for each new license.” The statute caps it at $300 (N.J.S.A. 17:16C-8). DOBI’s materials do not mention NMLS.
The application asks for:
- The main office form, plus branch office and location-of-records forms where they apply.
- A financial statement showing net worth, or a start-up balance sheet.
- Formation documents and a copy of your MVC dealer license.
- Personal certifications for officers, directors, members, partners, owners and stockholders with 10% or more.
- An office in the state: “NEW JERSEY IN-STATE OFFICE LOCATION REQUIRED”.
The application and FAQ state no bond and no net-worth minimum. Questions go to bliconline@dobi.nj.gov or 609-292-7272.
When does the DOBI license expire, and what is due each year?
June 30, 2027, for every license. DOBI’s FAQ says “ALL non-mortgage and non-student loan licenses will expire as of June 30, 2027”, and those licensees “will pay NO FEE to renew licenses”. Renewal is online only, through Banking Online Services, with notices expected by early May 2027.
The Act’s 17:16C-9 still says licenses expire December 31 each year, while a later amendment to 17:16C-8 lets the commissioner set a period of at least two years. Follow DOBI’s date.
The annual report. Under N.J.A.C. 3:23-4.1, every licensee reports the count and dollar total of its New Jersey contracts in three amount-financed tiers: $10,000 or less, $10,001 to $50,000, and $50,001 or more. The report on 2025 activity was due May 1, 2026; DOBI had not posted the next date when we checked. Failing to file can cost up to $100 a day (17:16C-19).
What does financing without the license cost?
Up to $1,000 for each offense. Under 17:16C-55, the commissioner can sue for “a penalty of not more than $1,000.00 for each offense”, and it reaches the business and any director, officer, employee, agent or representative. A knowing violation, or helping one, carries up to $500 per offense (17:16C-56).
DOBI can also suspend or revoke a license. In a 2022 Order to Show Cause, it alleged that a Trenton dealer operated on an expired license and did not produce contracts when asked; the order states allegations, not findings.
How much can you charge on a buy here pay here contract in New Jersey?
The Retail Installment Sales Act sets no maximum finance charge for motor vehicles. Section 17:16C-41 allows a time price differential (the finance charge on an installment sale) in the amount “agreed to by the retail seller or motor vehicle installment seller and the buyer on motor vehicles”. It limits other charges:
| Charge | What the Retail Installment Sales Act says | Section |
|---|---|---|
| Minimum finance charge | If the computed charge is lower: $12 on a term over 8 months, $10 on 8 months or less | 17:16C-41 |
| Variable-rate increases | Not more than 6% a year over the term above the initial rate, 3% in any 12 months, none in the first 3 years; 90 days’ notice before the first, 30 before later ones, 365 days between them | 17:16C-41 |
| Prepayment penalty | If paid off within 12 months after the first payment is due: $20.00 up to $2,000.00; 1% over $2,000 up to $5,000; $100.00 over $5,000 | 17:16C-41 |
| Late charge | If the contract provides for it, after a 10-day default: “not to exceed $10”, once per installment | 17:16C-42 |
| Returned check | “not to exceed $20”, if the contract provides for it | 17:16C-42 |
| Attorney’s fees | On referral to an attorney who is not a salaried employee of the holder: 20% of the first $500.00 and 10% of the rest | 17:16C-42 |
A variable-rate feature must be described “in at least 8-point bold face type on the face of the contract”. A contract paid off early or accelerated earns the buyer a credit for the unearned finance charge, figured by the actuarial method.
In LeftLane, card and ACH payments post to the customer’s account on their own, and automatic texts go out on the due date and after a missed payment, each with a payment link. You can try it on your own accounts.
Does the Retail Installment Sales Act cover every car you finance?
That is a question for New Jersey counsel. The Act defines “goods” as items bought “primarily for personal, family or household purposes” and “having a cash price of $10,000.00 or less” (N.J.S.A. 17:16C-1(a)). Goods “shall not include chattels personal sold for commercial or business use”, so a business-use sale is outside the definition.
No section of the Act we read exempts motor vehicles from that limit, and this guide does not settle whether its late charge, returned-check, attorney’s fee and prepayment limits reach a car priced over $10,000. Ask counsel which rules govern those contracts. DOBI states the license duty with no price limit, so you should plan on the license for every financed sale.
What late charge can you collect in New Jersey?
Under the Act, for contracts it covers, up to $10, once per installment, after the payment has been in default for 10 days. Section 17:16C-42 allows it only if the contract provides for it, and makes it collectible “only once on each minimum payment due however long it remains in default”.
If you add the charge to the buyer’s account, you must make it within 35 days of the default and mail written notice within 5 days. The right belongs to “the holder”, so the same limits bind a company that buys your contract.
What must a New Jersey retail installment contract include?
Under 17:16C-22, it shows the names and addresses of all parties, the date the buyer signed, and a description of the car sufficient to identify it. No blanks may be filled in after the buyer signs, except serial numbers not yet available. You give the buyer a free copy at signing (17:16C-23).
The contract carries a notice headed “NOTICE TO RETAIL BUYER”, in “10-point bold type or larger” (17:16C-24). It tells the buyer not to sign in blank, that they are entitled to a copy at signing, and to keep it to protect their legal rights. Copy the exact wording and placement from the section into your form.
Documentary and pre-delivery fees. We found no cap on a documentary fee. The Division of Consumer Affairs’ sales practices rule (N.J.A.C. 13:45A-26B.3, as adopted in 2009) sets three conditions:
- You may not “Represent to a consumer that a governmental entity requires the automotive dealer to perform any documentary service.”
- You may not charge for one “without first itemizing the actual documentary service, which is being performed”.
- The price goes in writing, in at least 10-point type, on the sale document.
The same rule bars charging for a pre-delivery service without first itemizing it, or for one paid for by anyone other than the retail buyer.
Can you sell service contracts and GAP on financed deals?
Service contracts, yes. Their charges are part of the taxable price (auto tax guide), and the Used Car Lemon Law makes it unlawful for a dealer to misrepresent warranties or service contracts (N.J.S.A. 56:8-68).
We found no New Jersey GAP rules, and the Division of Taxation’s guide does not address how GAP is taxed. Ask New Jersey counsel before you sell GAP on your own paper.
How does sales tax work when you finance the sale yourself?
The dealer charges the 6.625% sales tax on the sale and remits it on its own sales tax returns (Division of Taxation). Guide S&U-4 lists a quarterly return (ST-50) and monthly remittance (ST-51) through the NJ Tax Portal; confirm with the Division which applies to you.
From the Division’s auto tax guide:
- Taxable: documentary fees, service contracts, dealer prep and window etching.
- Not taxable: MVC title and registration fees.
- Trade-in credit: only when “The contract for purchase of the motor vehicle and the trade-in are executed at the same time”.
- Zero-emission vehicles: taxed at the full 6.625% since July 1, 2025 (ZEV notice).
Repossessions and charge-offs. We found no Division of Taxation guidance on recovering sales tax on a repossessed car or a charged-off contract. Do not count on a credit; ask your accountant.
What are New Jersey’s repossession rules?
After default you may repossess “without judicial process, if it proceeds without breach of the peace”, under New Jersey’s version of Article 9 of the Uniform Commercial Code (P.L.2001, c.117, 12A:9-609). We found no New Jersey repossession notice statute specific to motor vehicles, and no separate right-to-cure statute.
After the repossession:
- Notice before you sell (9-611). For consumer goods it also states the buyer’s deficiency liability and a phone number for the redemption amount; the law includes a model form (9-614).
- Redemption. The buyer may redeem until you collect, contract to dispose of the car, or accept it (9-623).
- Deficiency explanation. In writing before you demand a deficiency, and within 14 days of a request; one free every 6 months, then up to $25 (9-616).
- Proof. If the buyer raises your compliance and you cannot prove it, the deficiency is reduced (9-626).
These are the sections as enacted in 2001; have counsel confirm later amendments.
GPS and starter-interrupt devices. We found no New Jersey statute or rule on GPS trackers or starter-interrupt devices; whether and how you may use one is a question for New Jersey counsel.
Who examines your financed deals, and what records do you keep?
DOBI. Its Office of Consumer Finance investigates installment sellers and examines records under 17:16C-15. In the 2022 order, it demanded executed contracts, retail purchase agreements and lists of the finance companies the dealer used.
You keep the records at your place of business in New Jersey (17:16C-18), “for such period of time as the commissioner may by regulation require” (17:16C-19). The statute sets no number of years and this guide did not read DOBI’s rule, so ask DOBI. Sales tax records are kept “for at least four years” (S&U-4); MVC periods are in After the sale in New Jersey.
In LeftLane, each finance account keeps an activity log of payments, adjustments and status changes, and the system produces Metro 2 credit reporting files and repossession reports from live data.
What trips people up
- Financing on the MVC license alone. Financing without DOBI’s license can cost up to $1,000 per offense.
- Skipping the annual report in a slow year. DOBI requires it even with no business; not filing can cost up to $100 a day.
- Planning around December 31. The old statute text says it; DOBI’s date is June 30, 2027.
- Letting a sister company buy your paper unlicensed. On the statute’s plain text, only a wholly owned relationship is outside the license.
- An unitemized doc or prep fee. These were part of the Attorney General’s 2022 settlements with six dealers.
What changed recently
- Coming: June 30, 2027. All DOBI installment seller licenses expire; renewal is online and free, with notices expected by early May 2027.
- July 1, 2025. Zero-emission vehicle sales taxed at the full 6.625%.
Frequently asked questions
Do I need a separate license to finance the cars I sell in New Jersey?
Yes. DOBI’s Motor Vehicle Installment Seller license is required when an MVC-licensed dealer signs retail installment sales contracts. It is separate from the MVC license. The paper application costs $300, non-refundable, and needs a copy of your MVC license, a financial statement and a New Jersey office.
What will it cost to renew my DOBI license in 2027?
Nothing. DOBI says non-mortgage and non-student loan licensees, installment sellers included, pay no fee to renew. Every such license expires June 30, 2027. Renewal is online only, through Banking Online Services, and DOBI expects to send notices by early May 2027.
Do I have to file DOBI’s annual report if I did no business?
Yes. DOBI’s FAQ says every licensee files the annual report under N.J.A.C. 3:23-4.1, even with no business in the year. It gives the count and dollar total of your New Jersey contracts in three amount-financed tiers. The 2025 report was due May 1, 2026.
Is there a maximum interest rate on a New Jersey buy here pay here contract?
The Retail Installment Sales Act sets none for motor vehicles: the finance charge is the amount you and the buyer agree to. The Act limits other charges, including the late fee and prepayment penalty. Whether the Act reaches a car with a cash price over $10,000 is a question for New Jersey counsel.
How much can a New Jersey dealer charge as a late fee?
Under the Retail Installment Sales Act, up to $10, once per installment, if the contract provides for it, after a 10-day default. If you add it to the account, do so within 35 days of the default and mail notice within 5 days. Ask counsel whether the Act reaches a car priced over $10,000.
Can my own finance company buy my contracts without a DOBI license?
On the statute’s plain text, only if one company wholly owns the other. A company that buys a dealer’s contracts is a sales finance company needing its own DOBI license, unless it wholly owns the dealer or the dealer wholly owns it. A sister company under common ownership is not excluded. Ask counsel or DOBI first.
Your next step
Before your first financed sale, put the contract, the signatures, the payments and the payment reminders in one system. In LeftLane, card and ACH payments post on their own, reminder texts go out with a payment link, and each finance account keeps an activity log. Start a free trial and call 512-222-9549; a real person will help you set it up.
Sources
- DOBI: installment seller license, FAQ, application and Order OCF22-16
- Retail Installment Sales Act, N.J.S.A.: 17:16C-1, -2, -8, -9, -19, -22, -23, -24, -41, -42, -55 and -56
- N.J.S.A. 56:8-68: used car unlawful practices
- P.L.2001, c.117: Uniform Commercial Code Article 9
- Division of Taxation: Sales and Use Tax, S&U-4, auto tax guide and ZEV notice
- Division of Consumer Affairs: N.J.A.C. 13:45A-26B adoption
- Attorney General: 2022 dealer settlements
This guide is general information for dealers, not legal advice. Rules and fees change. Confirm with the agency or a licensed attorney in your state before you act.