New Jersey Used Motor Vehicle Dealer License Guide

How to become a licensed used motor vehicle dealer in New Jersey

According to New Jersey Revised Statutes 39:10-19, auto dealers operating in the state must obtain a motor vehicle dealer license with the Motor Vehicle Commission. The New Jersey legislature enacted the license and regulations to ensure that dealers engage in ethical business practices and remit the required taxes and fees. Candidates must complete the following nine steps before they are eligible for a license and can submit a completed application to the NJ Motor Vehicle Commission of Business Licensing Services Bureau.

Step 1: Register your business

In order to comply with New Jersey tax laws, all applicants must register their business at least 15 days prior to opening. Fill out and submit your Application for Business Registration, NJ-REG. You’ll also need to obtain a Federal Employer Identification Number (FEIN) registration certificate. You can apply for a federal employer identification number as you fill out the online NJ-REG, or you can apply directly to the IRS online.

More information can be found here for dealer registration.

Step 2: Establish a business location

Under New Jersey motor vehicle dealer regulations §13:21-15.4, all licensees, except leasing dealers, shall maintain a permanent and properly identified location. All documents required by N.J.S.A. 39:10-6, including books, records, files, payroll records, W4 or W2 records, and more, must be held at said location. In order for the business location to meet the regulations for licensure, dealer applicants must:

  • Supply evidence of an established place of business – you must have an office with a desk, chair, landline telephone, and a working safe to store motor vehicle documents.

  • Ensure the office size be at a minimum 8 x 9 square feet.

  • Maintain display space capable of showcasing a minimum of two vehicles – a leasing license is not required to maintain a display space.

  • Have an exterior sign permanently affixed to the land or building consistent with local ordinances. The lettering must be legible from the roadway (not applicable to leasing).

Step 3: Request fingerprint-based background check

Prior to applying, dealer candidates are required to schedule a request to undergo a criminal background check that is fingerprint-based. Complying with New Jersey requirements, the applicants must have a request on file with the Board before they can be issued a license. To request scanning, visit here.

Once the initial business application is received, applicants will receive instructions via email or regular mail on how to submit fingerprints. Once you have the specified fingerprints, submit your fingerprint application and receipt to the MVC to continue with the license application process.

Step 4: Get insured

Upon preliminary approval, the licensure process requires all dealer applicants to obtain liability insurance. The New Jersey Motor Vehicle Commission will ask for the the following amounts:

  • $100,000 per person/incident up to $250,000 per incident for bodily injury or death

  • $25,000 for property damage

  • $250,000 for combined personal injury and property damage per incident covering all dealer plates

Once he or she has received proof of insurance, the certificate should read:

  • NJMVC – Business Licensing Services Bureau, Dealer Unit, P.O. Box 170, Trenton NJ 08666

Step 5: Become bonded

In the state of New Jersey, used car dealers must post a $10,000 used motor vehicle dealer surety bond to obtain their license to operate a used dealership. With a surety bond, the obligee has a guarantee that the person obtaining the bond will abide by the rules in place. A surety bond ensures the financial protection of the obligee and customers; the public will receive reimbursement for financial harm if the auto motor dealer does not or cannot comply with the licensing regulations, and all required taxes and fees will be paid to the State of New Jersey.

It important to note that the bond is required to be in your business name and address, with an expiration date coinciding with the licensing year. These bonds expire each year on March 31.

Step 6: Compile the individual documents

Applicants must submit the following documentation:

  • Copy of alternate/fictitious name filing certificate

  • Photographs of premises and signage

  • Copy of driver’s license for owners/officers/members/partners

  • Passport-size color photographs of owners/officers/members/partners

  • Copy of certificate of authority from Department of Treasury for out-of-state corporations and LLCs

  • Copy of New Jersey Sales Tax Certificate of Authority

    • Dealers must submit a Sales Tax Certificate of Authority with their application. Dealers can obtain a sales tax number here.

  • Proof of issuance of federal taxpayer identification number from IRS

  • Copy of deed, lease, or purchase agreement for the premises to be licensed

  • Copy of telephone bill for landline at premises to be licensed

  • Dealer Certification of Licensed Location Type and Proper Walls

    • Dealers must complete the Dealer Certification of Licensed Location Type and Proper Walls form and submit it with their application.

  • Business Hours Form

  • Completed Authorized Signatories Form (Employees must provide copies of records verifying employment) (Acceptable documentation includes, but not limited to, W-2’s, W-4’S, pay stubs, etc.)

Step 7: Obtain official documents and submit the application

Along with completing the form and preparing the documents from the section above, you also have to obtain the following paperwork from other authorities:

  • Incorporation/formation papers with the date of filing from the NJ Division of Revenue

    • Dealers must submit a copy of their business formation letters filed with the New Jersey Division of Taxation. Dealers can register their business here. Dealers whose business is located outside the State of New Jersey must submit a Certificate of Authority obtained from the New Jersey Department of Treasury.

  • Federal Employer Identification Number (EIN) from the IRS

    • Dealers must submit their Federal Employer Identification Number to the New Jersey MVC. Dealers can obtain a FEIN here.

  • Certification that authorized signatories have not been convicted of fraud or misrepresentation previously from the NJ State Police

  • Alternate/fictitious name filing certificate (if applicable) from the NJ Department of Treasury

  • Municipal Approval

    • Dealers will need to obtain approval from their local municipality and submit a Municipal Approval Form with their application.

Once you have collected all the documents from the dealer checklist, you are ready to submit the application and related documentation 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

The applicant and the place of business will be fully investigated after receipt of the completed application.

Note: Do not provide proof of liability insurance and a surety bond until you receive the preliminary notice of license approval. 

Step 8: Pass an inspection

A representative from the MVC will need to inspect and approve the dealer’s business location. An applicant for an initial license will be examined regarding his or her knowledge of the statutes and regulations that govern the buying, selling, or dealing in motor vehicles in New Jersey.

The purpose of the exam is to familiarize the applicant with potential violations and will be given during the site investigation. The inspector will administer a written examination testing the dealer’s knowledge of all dealer laws and regulations during the site inspection.

Step 9: Pay the associated fees

Once the notification of the request for fees is sent to the applicant, he or she is able to provide proof of insurance and the surety bond.

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

How do I renew my New Jersey used motor vehicle license?

NJ car dealer licenses are valid for one year and expire on March 31 every year. The Motor Vehicle Commission mails renewal papers to license holders about 60 days prior to the expiration date.

Note: When renewing the used motor vehicle license, dealers will also need to renew their bond.

Need a Surety Bond?

If you’re a New Jersey motor vehicle dealer in search of a surety bond, call 1 (800) 308-4358 to talk to a SuretyBonds.com surety professional or get a free, no-obligation quote.