Auto dealerships fraudulently fail to disclose deferred down payments so banks will finance consumers for loans for which they would otherwise not qualify. In addition, dealers who honestly attempt to obtain financing for their customers are at a competitive disadvantage when their finance terms are not as attractive as those of a dishonest dealer.
It is not illegal to charge and collect a deferred down payment. However, under the Automobile Sales Finance Act, it is illegal to fail to disclose it. If you agreed to pay a deferred payment, or gave the dealer a "hold" check, or signed a promissory note, and the dealer failed to disclose the payment arrangement correctly, the dealer broke the law.