NJ S2086

Motor vehicle dealers must pay off the remaining loan balance on a customer's trade-in vehicle within 15 days of taking possession and provide proof of payment upon request.

Dealers violating the trade-in payoff requirement face penalties up to $1,000 for the first offense and up to $2,000 for subsequent offenses, plus any late fees incurred by the customer.

Secured parties (lenders) must release vehicle titles within 15 days of receiving payment, or within 15 days of funds clearing if paid by non-certified check, with penalties up to $500 for the first offense and $1,000 for subsequent violations.

Constructive levies on motor vehicles become invalid unless the creditor takes actual physical possession within 30 days of filing notice with the Chief Administrator of the Motor Vehicle Commission.

Good faith purchasers of trade-in vehicles are protected from creditor levies unless the creditor has taken actual physical possession of the vehicle.