New Jersey Auto Dealer Bond and Car Dealer License

The $10,000 bond comes from a used-car rule, not the dealer statute

New Jersey's dealer licensing statute, R.S. 39:10-19, sets out who must be licensed to buy, sell, or deal in motor vehicles in the state. The bond is not in that statute; the $10,000 surety bond requirement instead sits in a New Jersey Division of Consumer Affairs rule, N.J.A.C. 13:45A-26F.5. The Motor Vehicle Commission collects proof of the bond when it processes your license.

The MVC's own dealer letter states the amount plainly: the dealer must provide a surety bond in favor of the State of New Jersey in the amount of $10,000. The bond must be executed by a surety company authorized to transact business in the state. When you submit it, it must be the original bond; copies are not accepted. You send it after preliminary approval and the site inspection, when the MVC requests the fees, proof of insurance, and the bond together.

License steps and documents

To apply, you complete the MVC's dealer license application, form BLC-4. Each individual applicant also completes an "Applicant's Information" form, BLC-205B. A child-support certification, form BLS-43, is part of the application package.

Other documents to gather:

• Municipal Approval Certificate for Business License, form BLS-162, signed and stamped by the municipality.
• Dealer Certification of License Location Type and Proper Walls, form BLS-158, with supporting documentation.
• A copy of your NJ Certificate of Authority for Sales Tax.
• For new-car dealers, a copy of the franchise agreement.

All dealerships must undergo a live-scan criminal background check through the State's live-scan vendor. Do not get fingerprinted until the Bureau sends you instructions. Processing of your application does not begin until all fingerprint receipts are received. The statute also requires each applicant to submit fingerprints and written consent for a criminal history record background check. A person convicted of a crime arising out of fraud or misrepresentation in the sale, leasing, or financing of a motor vehicle is not eligible for a license.

Out-of-state applicants must submit identification documents totaling six points under the MVC's identity verification process. Anyone listed as an employee and authorized signatory must provide payroll records showing their employment.

Before licensing, you attend a pre-licensure interview scheduled by the Commission, where you are examined on the lawful conduct of the dealer business. The exam is given during the site investigation. If you cannot show adequate knowledge, the Commission may require you to attend a training program.

One license covers more than cars: a licensed motor vehicle dealer can also deal in mopeds and leased vehicles with no additional endorsement.

Place of business: 72 sq ft for used-only, 1,000 sq ft for new dealers

Where you can operate depends on what you sell. A dealer selling used vehicles only must maintain a permanent, properly identified location with at least 72 square feet of office space inside a permanent, enclosed building. A dealer selling new vehicles must maintain a permanent location of at least 1,000 square feet, with display space and equipment to service motor vehicles.

The MVC also requires:

• A clearly identifiable, separate area to display at least two vehicles, in conformance with municipal and zoning requirements.
• An exterior sign permanently attached to the building or grounds; banners are not permitted.
• An office with a desk, chair, landline telephone, and a working safe for vehicle documents, plus office furniture, a file cabinet, and climate controls.
• Proof you control the premises: a deed if you own it, or, if you lease, a lease (or enforceable contract to lease) of at least 12 months — month-to-month is not allowed — running through the date the license is set to expire.

You cannot use the premises of a currently licensed dealer or of the proprietor of an allied business. Unless you will be open at least 48 hours a week between 9:00 a.m. and 5:00 p.m., Monday through Saturday, you must submit a schedule with no fewer than 20 hours a week in that window. The licensee or an authorized signatory must be present during the posted business hours. A follow-up compliance inspection can be held any time after 90 days following licensing; failure to comply will result in revocation of the license.

Frequently asked questions

Dealers near the state line can compare the New York, Pennsylvania, and Delaware dealer bond pages.