How to Get An Auto Dealer License in New Jersey

The New Jersey Motor Vehicle Dealer License is a permit issued by the New Jersey Motor Vehicle Commission (MVC) that authorizes individuals or businesses to sell or lease motor vehicles in New Jersey. It is a legal requirement for anyone who wants to operate as a motor vehicle dealer in the state. In this article, we will first describe who needs this license, then how to get the license, and finally, how to renew the license. 

Who Needs a New Jersey Motor Vehicle Dealer License?

In New Jersey, individuals or businesses that engage in the sale or lease of more than four motor vehicles per year are required to hold a New Jersey Motor Vehicle Dealer License. This requirement applies to both new and used vehicle dealers. The license is necessary regardless of whether the business operates out of a physical location, such as a dealership lot, or conducts sales exclusively online.

Certain types of businesses may be exempt from needing a license. For example, manufacturers, finance companies, and certain governmental entities are exempt from the dealer license requirement. 

There are four types of dealer licenses in the state of New Jersey:

• New and used car dealership
• Used car dealership
• Leasing dealership
• Boat dealership

The process of getting the new and used car dealership, leasing, and boat dealership licenses are the same. To obtain one or more of these four licenses, follow the steps below.

Step 1: Choose a license type

A new and used car dealership license is for individuals or businesses who wish to buy, sell, or exchange new AND/OR used cars in New Jersey. With this license, you are allowed to sell ONLY new vehicles, but also have the option to sell used vehicles. 

A used car dealership license is for individuals or businesses who wish to buy, sell, or exchange ONLY used cars in New Jersey.

A leasing dealership license is for individuals or businesses that offer motor vehicles for lease.

A boat dealership license is for individuals or businesses that wish to buy, sell, or exchange new and used boats. 

Step 2: Establish a business location

The second step is to establish your place of business. The state of New Jersey has the following criteria for what is a valid "business location":

1. Must have an office with a desk, chair, landline telephone, and a safe for motor vehicle documents. 
2. Must have an office size should be at least 8 x 9 square feet.
3. Must have a display space capable of showcasing at least two vehicles. (Not required for a leasing license)
4. Must have a permanent exterior sign that is legible from the roadway. (Not required for a leasing license)

Step 3: Obtain a Franchise Agreement from your manufacturer (for new car dealers only)

The third step is to obtain a franchise agreement from your manufacturer. This step is only applicable to those seeking a new car dealership license. 

A manufacturer franchise agreement is a contract between the dealer and manufacturer that allows the dealer to sell the motor vehicles using the manufacturer's name and trademark. For example, your dealership would need a franchise agreement with Toyota if you wanted to sell Toyota vehicles. 

Step 4: Register your business

Before applying for a license, you must ensure you have registered your business with the state of New Jersey. 

While there are a variety of business types, there are two main ways you can register your business.

The first is for for-profit corporations, non-profit corporations, limited partnerships, limited liability companies (LLC), and limited liability partnerships (LLP). All of these businesses must complete the following steps to register:

1. Obtain an employer identification number (EIN) from the IRS. You must apply for an EIN online via the IRS. 
2. File a Certificate of Formation/Authorization online via the New Jersey state website. 
3. File your Tax/Employer Registration form (Form NJ-REG) via the State of New Jersey Business Registration website. 

The second is for general partnerships, proprietorships, or self-employed individuals. If this is your business type, follow the instructions below:

1. General partnerships and any business with employees must obtain the EIN from the IRS. Even if your business does not have other employees other than yourself, the state of New Jersey still recommends obtaining it.
2. File your Tax/Employer Registration form (Form NJ-REG) online on the State of New Jersey Business Registration website. 

After successfully filing all the necessary forms, you will obtain a Business Registration Certificate (BRC). 

Step 5: Prepare the required documentation

The next step is to ensure you have all your required documentation ready for submission. We have listed below all the documents that need to be submitted alongside your license application:

• Copy of Alternate/Fictitious Name Filing Certificate: This certificate is for those who want to operate under an alternate name other than the business name they initially used to register with. Use Form C-150G to register an alternate name. 
• Copy of Formation Papers or Corporate Resolution (applies only to corporations, LLCs, and LPs): This is sometimes known as the Certificate of Formation/Authorization, which you are required to file when registering your business. 
• Copy of driver's license(s) of all owners/officers/members/partners
• Copy of Certificate of Authority from the Department of Treasury for out-of-state corporations and LLCs: This certificate is only for corporations or LLCs licensed in other states. To obtain this certificate, complete the Application for Public Records Filing for New Business Entities, which you can get by calling (609) 292-1730 or seting up/logging in to your Premier Business Services (PBS) account.
• Copy of New Jersey Sales Tax Certificate of Authority (which you will receive after registering your business): The Sales Tax Certificate of Authority allows your dealership to collect sales tax when making a sale.
• Proof of issuance of Federal Taxpayer Identification Number from IRS: This is also known as an EIN, which you would have obtained when registering your business. 
• Copy of deed, lease, or purchase agreement for your business location
• Copy of telephone bill for a landline at your business location

Step 6: Fill out the dealer license application

The next step is to fill out the New Jersey dealer license application. The application requests the following information:

1. Specifics of your business: business name; trade name; phone number; address
2. Business type: corporation, partnership, proprietorship, or other
3. License type
4. Criminal background check
5. Financial background information
6. Distribution of stock
7. Applicant's personal information

You can find the car dealership and boat dealership applications on the New Jersey Motor Vehicle Commission website. 

Step 7: Fill out supplementary applications

Some supplementary applications are required, including but not limited to the following:

• Child Support Certification (if applicable)
• MVC Dealer Certification/Signature card: This certification allows the owners or partners of your business to act on behalf of the dealer. Certified individuals can sign official documents and make major legal decisions for the dealership. Along with this form, all owners, partners, or corporate officers must provide a copy of their driver's license or non-driver's ID card. You can find this form on the New Jersey MVC website. 
• Dealer Certification of Licensed Location Type and Proper Walls form: These forms are available on the New Jersey Motor Vehicle Commission's official website. 

Step 8: Fill out the zoning and municipal approval form

The seventh step is to fill out the Municipal Approval Certificate for Business License form. This form indicates that your business follows the local zoning and municipal laws of the jurisdiction your business is operating in. As part of the approval process, your business must pass an in-person screening conducted by a Zoning Official/Municipal Representative. Contact your local government office to schedule an appointment. 

Step 9: Obtain your Certificate of Insurance reflecting your liability coverage

The next step is to obtain insurance. Liability coverage is required in the amount of $100,000 to $250,000 for bodily injury and $25,000 for property damage. After you obtain your coverage, you must fill out a Certificate of Insurance. The certificate should specify the total number of dealer plates covered in the insurance policy and should read:

• NJMVC - Business Licensing Services Bureau, Dealer Unit, PO Box 170, Trenton N.J. 08666

Step 10: Obtain the New Jersey motor vehicle dealer bond

New Jersey requires a $10,000 motor vehicle dealer bond to obtain your dealer license. 

What is the New Jersey Motor Vehicle Dealer Bond?

Motor vehicle dealer bonds, also known as auto dealer bonds, are essential prerequisites to ensure that auto dealers meet their legal responsibilities to the state of New Jersey and uphold their professional duties towards their customers. These bonds act as a form of financial security for individuals engaging with motor vehicle dealers. For instance, if a dealer were to sell a car without a valid title, the consumer would have the right to file a claim against the dealer's auto dealer bond to seek compensation.

How to get the New Jersey Motor Vehicle Dealer Bond

SuretyNow offers a convenient solution for obtaining your New Jersey motor vehicle dealer bond. The process is simple. Fill out our 3-minute form, and we'll start looking around to get you the best quote. We usually get back to our customers within the hour with quotes during work hours. We will mail you a copy of the bond once you're satisfied with the price and successfully pay. You can then include the bond in your licensing application. 

Step 11: Submit your application and all required materials

The next is to submit your application and required documents. 

To submit your application, mail it to the following address:

New Jersey Motor Vehicle Commission
Business Licensing Services Bureau
PO Box 170
225 East State Street
Trenton, NJ 08666-0170

Important note: Do not provide proof of insurance and surety bond until you receive the Approval Notice via email or mail. 

Step 12: Undergo a criminal background check

Once you've submitted your initial license application, you will receive the Fingerprint Request Notification form via email or mail. After completing this form, make an appointment to get fingerprinted through this website or call (877) 503-5981. Your completed form MUST be present at the appointment.

After your appointment, the fingerprinting agency will send your fingerprints to the New Jersey MVC. Within three days after your appointment, submit your Fingerprint Request Notification form in one of the following ways:

Fax: Fax the form to (609) 341-2732

Mail: 

New Jersey Motor Vehicle Commission
Project Manager, DOSP
Business and Government Services
PO Box 122
225 East State Street
Trenton, NJ 08666-0122

Step 13: Pay applicable fees and pass the on-site inspection

The final step is to pay all applicable fees and pass a site inspection. After submitting your application, you will be asked to pay all applicable fees and proof of insurance and bond. 

The fee for a wall license is $100, and a set of five dealer license plates is $257.50. The total dealer registration fee is $77. 

You will also be notified of a site inspection of your business location. If you pass your site inspection and your application is approved, you will receive your New Jersey motor vehicle dealer license in the mail. 

Renew your New Jersey Motor Vehicle Dealer License

New Jersey dealer licenses are valid for one year and expire every year on the 31st of March. The New Jersey MVC mails renewal applications and required documents to license holders 60 days before expiration date. To renew your license, you must fill out the same license application. It's important to note that you must also renew your surety bond.