How much does an auto dealer bond cost in New Jersey?
Auto dealer surety bonds (also called motor vehicle dealer bonds) are mandated by the New Jersey Motor Vehicle Commission (NJMVC) as part of the licensing requirements for dealerships to conduct business in the state. The total bond amount is $10,000 for all types of car dealers.
The surety company determines your premium rate, which is the percentage of the total bond amount you pay as the premium. Premium rates for New Jersey auto dealer bonds typically cost between 1% and 3% of the total bond amount.
During the application process, the surety company evaluates your personal credit, financial statements, industry experience, and licensing history. Applicants with good credit generally receive the lowest rates, however, bad credit will not prevent you from securing a New Jersey auto dealer bond. EZSurety still offers competitive rates to individuals with low credit scores or other financial issues.
Below are the lowest premiums EZ Surety has issued for auto dealer surety bonds in the State of New Jersey.
- EZ Surety has issued motor vehicle dealer surety bonds for premiums as low as $100.
- EZ Surety has issued used motor vehicle dealer surety bonds for premiums as low as $100.
Why are auto dealer bonds important in New Jersey?
New Jersey auto dealer bonds provide protection for customers, creditors, and the state government. When a New Jersey motor vehicle dealer posts a surety bond, they provide a guarantee to the New Jersey MVC that they will conduct business in compliance with the conditions listed in N.J.A.C. 13:21-15.1.
If the auto dealer fails to comply with the rules and regulations, the surety company will pay out financial losses to damaged parties up to the full bond amount. The auto dealer is liable to reimburse the surety for any damages paid under the bond.
How to get your auto dealer license in New Jersey
To obtain your auto dealer license in New Jersey, you must submit an application to the NJMVC along with the following documents:
- $10,000 surety bond
- Photographs of the place of business and required signage
- Copy of the NJ Sales Tax Certificate of Authority
- Copy of the deed, lease, or purchase agreement for the business location,
- Copy of telephone bill for the business’ landline phone
- Proof of federal taxpayer identification number
- Copy of the driver’s license and a colored photograph for owners and officers
- Fingerprint request notification form
- Copy of DBA filing (if applicable)
To complete the application process, dealers must pay a $100 license fee and a $257.50 registration fee.
All motor vehicle dealer licenses and bonds are valid for no more than a year and expire annually on March 31st. The NJMVC mails renewal papers to licensed dealers 60 days before the expiration date.