A New Jersey Motor Vehicle Commission (MVC) bond is a surety bond required by the New Jersey Motor Vehicle Commission for certain types of businesses. The bond is required to ensure that the business will abide by all the laws and regulations of the MVC. The bond also serves as a guarantee that the business will pay any fines or fees imposed by the MVC if they fail to comply with the laws and regulations. The bond amount will vary depending on the type of business. The bond must be renewed annually in order to remain valid.
What is an New Jersey Car Dealer Bond?
New Jersey Car Dealer Bonds are required by the New Jersey DMV to obtain your Dealer license. The MVD Bond amount for the sale of New and used vehicles is set at $10,000. The Auto Dealer bond ensures that the principal shall comply with the conditions of any contract made by such licensee in connection with the sale or exchange of any motor vehicle and shall not violate any of the provisions of law relating to the conduct of the business for which it is licensed.
The State requires a Car Dealer bond for each license you hold:
$10,000 surety bond for New and Used Motor Vehicle Dealers, Public Consignment Auction Dealers and all other types of dealers
Different parts of a bond:
There are 3 parts to a MVD surety bond. The Principal "YOU", The Surety Company, and the Obligee. The Principal is the business or individual applying for the MVD Surety Bond. The Obligee is the individual or entity requiring the Surety Bond and the Surety Company is the company who provides the Surety Bond coverage.
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New Jersey's MVD Bond Requirements and Information
You must meet the following qualifications
and requirements before obtaining a new and used car dealership or a long term
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
office size must be at a minimum 8 X 9 square feet.
- For a
dealer license, you are required to maintain display space capable of showcasing
a minimum of two vehicles – a leasing license is not required to maintain
a display space.
business must also 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).
are required to obtain a Franchise Agreement from the manufacturer which
you must submit with your application (New Car Dealers Only).
must submit the following:
of alternate/fictitious name filing certificate
of formation papers or corporate resolution
of driver's license for owners/officers/members/partners
of certificate of authority from Department of Treasury for out-of-state
corporations and LLCs
of New Jersey Sales Tax Certificate of Authority
of issuance of federal taxpayer identification number from IRS
of deed, lease or purchase agreement for the premises to be licensed
of telephone bill for landline at premises to be licensed
The application process
initial and supplementary applications must be completed and signed by the
owner, partners, members or corporate officers
supplementary applications include but are not limited to:
Dealer Certification/Signature card
request notification form
hours of operation
Certification of licensed location type and proper walls
local municipality must approve the location and complete the municipal
Certificate of Insurance reflecting liability coverage in the amount of
$100,000 - $250,000 for bodily injury and $25,000 for property damage is
required at the time of approval and must specify the total number of
plates covered by the policy
certificate should read:
– Business Licensing Services Bureau, Dealer Unit, P.O. BOX 170, Trenton
$10,000 Surety Bond is required in your business name and address with an
expiration date coinciding with the licensing year.
The Chief Administrator of the MVC may
suspend or revoke your dealer or leasing license or registration privilege for
non-compliance at any time under the statutes and regulations that govern their
issuance. These include but are not limited to:
from other non-licensed locations
to maintain records or ledgers at the licensed location
of temporary registration certificates
of re-assignment certificates
of dealer plates (cannot be used for hire or commercial designed vehicles)