Car dealers in New Jersey must obtain an auto dealer license to legally sell new or used motor vehicles. The New Jersey Motor Vehicle Commission (MVC) is responsible for overseeing the licensing process and establishing the requirements you must meet to get your license.
In this guide, we’ll outline the MVC licensing requirements and give you a step-by-step process for getting your New Jersey dealer license.
Step 1: Determine license type
The first step to obtaining your New Jersey dealer license is to determine what type of license you need. The State of New Jersey issues multiple dealer licenses, each permits the licensee to sell different sorts of vehicles.
Below are the different license classifications available in New Jersey:
- New and used car dealership license: This license lets dealers sell new and used motor vehicles.
- Used car dealership license: This license lets dealers sell used motor vehicles only.
- Leasing dealership license: This license lets dealers lease new and used motor vehicles, but not sell them.
- Boat dealership license: This license lets dealers sell new and used watercraft.
Step 2: Get your business location
The next step to getting your dealership license in New Jersey is to get your permanent place of business. This business location must adhere to the standards set by the Motor Vehicle Commission.
Here are the requirements your business location will need to meet:
- An exterior sign that displays the business’ name
- A display area with enough room to show two vehicles
- An office with a desk and a place to store business records
- A telephone line with a publicly listed phone number
After you have acquired a business location that meets these requirements, you will need to take multiple pictures of the business to include with your application.
Step 3: Register your business
The State of New Jersey requires auto dealers to register their business with the New Jersey Department of Revenue. Once you receive your New Jersey Sales Tax Certificate of Authority, you will need to include it with your application.
If your business entity is structured as a limited liability partnership (LLP), limited liability company (LLC), or corporation, you will need a Federal Employee Identification Number (EIN) from the IRS. You can apply for your EIN online and receive it instantly.
Step 4: Get liability insurance
All New Jersey dealers are required to get liability insurance coverage to protect against any mishaps that may occur during the course of business. The required coverage amounts are as follows:
- $100,000 per person/incident
- $250,000 per incident for bodily injury or death
- $25,000 per incident for property damage
- $250,000 combined personal injury and property damage per incident
Step 5: Get a surety bond
Before applying for a license, auto dealers must post a New Jersey surety bond. The bond gives financial protection to the state and the dealer’s customers. If the dealer violates any of the licensing regulations resulting in damages to others, the damaged parties can file a claim against the bond to receive compensation.
New Jersey motor vehicle dealer bonds have a required bond amount of $10,000. Dealers do not need to pay this entire sum upfront but rather only need to pay a small percentage as a premium. This typically ranges between 1% and 3% of the bond amount. The surety company that issues the bond determines premiums on an individual basis by evaluating the dealer’s industry experience, credit score, and other factors.
Step 6: Complete fingerprints and background check
Every individual listed on your license application must complete a live fingerprint scan and criminal background check. After you submit your initial business application to register your business in New Jersey, you will receive instructions via mail or email for completing the fingerprints and background check.
Step 7: Submit application
Once you ensure you have met all the requirements, you can go ahead and complete your dealer license application. You can find the application forms for your particular license classification on the MVC website.
In addition to the application form, you will need to provide the following documents:
- Copy of deed or lease agreement for business location
- Copy of New Jersey Sales Tax Certificate of Authority
- Photographs of business location
- Photographs for all owners and officers
- Copy of bill for telephone line at the business location
- Original manufacturer’s certificate (new dealers only)
You will also need to include a $100 license fee and a $257.50 registration fee. Once you have gathered everything you need, you can send your application packet to the following address:
Motor Vehicle Commission
Business Licensing Services Bureau
Dealer Licensing Unit
P.O. Box 171
225 East State Street
Trenton, NJ 08666-0171
New Jersey dealer license frequently asked questions
How do you renew a New Jersey dealer license?
New Jersey dealer licenses expire annually on March 31st. The Motor Vehicle Commission will mail you a renewal notice 60 before the expiration date.
How long does it take to get a dealer license in NJ?
After you submit your application, it typically takes around 30 days to receive your dealer license from the Motor Vehicle Commission.
How much does a dealer license cost in NJ?
New Jersey dealers must pay $357.50 to get their dealer license. This includes a $100 license fee and a $257.50 registration fee that also comes with five dealer plates.
In addition to these licensing fees, dealers must buy a surety bond. These bonds can cost as little as $100.
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You now have the knowledge you need to become a licensed auto dealer in New Jersey. When you’re ready to start the process, EZ Surety can offer you a free online quote for your New Jersey auto dealer bond.
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