New Jersey Motor Vehicle Dealer Surety Bond

Communicate With UsIM or Email

Bond Penalty: $10,000

A New Jersey motor vehicle dealer surety bond is a required license bond for any person or business engaged in the buying, selling, or dealing of motor vehicles within the State of New Jersey. Whether you operate as a new vehicle franchise dealer, a used vehicle dealer, or a long-term leasing company, the New Jersey Motor Vehicle Commission (MVC), Business Licensing Services Bureau requires you to post a surety bond as part of the dealer licensing process. Surety One, Inc. offers quick, no-hassle underwriting for New Jersey motor vehicle dealer bonds, including options for new applicants and those with challenged credit.

Bond Amount & Requirements

New Jersey Revised Statutes 39:10-19 requires a $10,000 motor vehicle dealer surety bond for all dealer license applicants. The bond must be executed by a surety company authorized to transact business in the State of New Jersey by the Department of Banking and Insurance. The bond expiration date must coincide with the licensing year, which ends March 31st of each year regardless of the date of issuance.

The bond ensures that the dealer will comply with the conditions of any contract made in connection with the sale or exchange of a motor vehicle and will not violate any provisions of law relating to the conduct of the business for which it is licensed. If a dealer violates these obligations, the bond may be used to compensate consumers, financing agencies, and the state for financial damages resulting from fraud, misrepresentation, failure to transfer titles, or mishandling of deposits.

Bond Amount License Type Description
$10,000 New and Used Car Dealership Authorized to sell both new (with franchise agreement) and used motor vehicles
$10,000 Used Car Dealership Authorized to sell used motor vehicles only
$10,000 Long-Term Leasing Company Authorized to engage in long-term vehicle leasing
$10,000 Public Consignment Auction Authorized to conduct consignment auctions of motor vehicles
$10,000 All Other Dealer Types Includes motorcycle dealers, trailer dealers, and other licensed classifications

Note: A separate $10,000 surety bond is required for each dealer license held. If you operate multiple license types or multiple locations, each will require its own bond.

Who Needs This Bond?

New Jersey Administrative Code N.J.A.C. 13:21-15.1 defines a motor vehicle dealer as any natural person or entity engaged in the business of buying, selling, or dealing in motor vehicles. Any individual or business that engages in such activity must be licensed by the MVC and must post the required $10,000 surety bond before a license will be issued.

The bond is required for:

  • New car franchise dealerships (requires manufacturer franchise agreement)
  • Used car dealerships
  • Long-term vehicle leasing companies
  • Public consignment auction dealers
  • Motorcycle dealers
  • Trailer dealers and other licensed dealer classifications

How Much Does the Bond Cost?

The cost of a New Jersey motor vehicle dealer surety bond (the “premium”) is a small percentage of the full $10,000 bond amount. Your exact premium is determined by a number of underwriting factors including your personal credit score, business financial strength, industry experience, and claims history. Because each applicant’s profile is unique, premiums vary and are quoted on an individual basis.

Surety One, Inc. offers competitive rates for all credit profiles, including programs for applicants with challenged credit. Surety bond application review and quoting are free of charge. There is no obligation to purchase. Contact us for your personalized quote.

New Jersey Dealer License Requirements

In addition to the $10,000 surety bond, the New Jersey Motor Vehicle Commission requires the following for a vehicle dealer license:

  • Completed dealer license application submitted to the MVC Business Licensing Services Bureau
  • An established place of business with an exterior sign permanently affixed (banners not permitted)
  • Office space of at least 8 x 9 square feet with a desk, chair, landline telephone, file cabinet, working safe, and climate controls
  • Display space capable of showcasing a minimum of two vehicles (not required for leasing licenses)
  • Deed or lease agreement for the business location
  • Copy of Fictitious Name Filing Certificate (if applicable)
  • New Jersey Sales Tax Certificate of Authority issued by the NJ Division of Taxation
  • Federal Taxpayer Identification Number (EIN) from the IRS
  • Copy of landline telephone bill
  • Certificate of Liability Insurance ($100,000/$250,000 bodily injury; $50,000 property damage)
  • Franchise agreement from the manufacturer (new car dealers only)
  • Live fingerprint scan and criminal background check for all individuals listed on the application
  • Formation documents for partnerships, corporations, and LLCs
  • License fee of $100 plus registration fee of $257.50 (includes five dealer plates)

Filing, Renewal & Cancellation

The executed surety bond must be filed with the MVC Business Licensing Services Bureau as part of the dealer license application. Do not submit your bond until you receive the preliminary notice of license approval from the MVC. The bond must be written by a surety company authorized to transact business in New Jersey and must remain active for the duration of the license period.

All New Jersey dealer licenses expire on March 31st of each year, regardless of the date of issuance. The MVC will mail a renewal notice approximately 60 days before the expiration date. A Renewal/Continuation Certificate for the surety bond is required each year before March 31st. Failure to renew your bond and license may result in suspension or revocation of your dealer privileges by the Chief Administrator of the MVC.

Bond Claims

A claim against the New Jersey motor vehicle dealer surety bond may be filed by consumers, financing agencies, or the state. Claims may be made for financial losses resulting from fraud, misrepresentation, failure to comply with titling or registration rules, or other violations of dealer licensing statutes. The surety company will investigate each claim and compensate valid claims up to the full $10,000 bond amount. The bonded dealer is then required to reimburse the surety for any amounts paid.

New Jersey Motor Vehicle Commission
Business Licensing Services Bureau
Dealer Licensing Unit
P.O. Box 171, 225 East State Street
Trenton, NJ 08666-0171
Phone: (609) 292-6500 | Web: nj.gov/mvc

Surety One, Inc. is the New Jersey surety bond expert provider, licensed in all fifty states, U.S. territories, and Canada. We offer competitive rates and excellent customer service for New Jersey motor vehicle dealer bonds and all other license bond classes. Need help meeting your MVC licensing requirements? Call us at (800) 373-2804, email us at Underwriting@SuretyOne.com, or click here to chat with a live underwriter (no bots!) for immediate assistance. We’re here to support your business success.

Surety bond application review and quoting are free of charge. There is no obligation to purchase.