New Jersey Auto Dealer Bond

A New Jersey Auto Dealer Bond costs $100 - $300 for those with strong credit. While the full amount of the bond needed for an auto dealer license is $10,000, you only have to pay a small percentage of that value (generally 1% - 10%). 

The percentage you need to pay to get bonded is known as a bond rate or bond premium. Your personal credit score mainly determines your bond rate. However, factors such as industry experience, past bonding history, and assets may also be taken into consideration. 

Another factor that affects your bond rate is the surety company you choose. 

Generally, larger and more established companies, such as JW Surety Bonds, are able to offer lower rates. We are personally able to provide the lowest rates in the industry due to the large volume of bonds we underwrite. 

1. Apply For Your Bond

To apply for an auto dealer bond, call us at (888) 592-6631 or fill out an online application. Our online application is available 24/7, takes only minutes, and provides an instant quote.

To complete an application, you will need to provide:

• Bond Name (New Jersey Auto Dealer Bond)
• Bond Amount ($10,000)
• Contact Information

2. Get a Quote

After a soft credit check, a quote will be sent directly to your email inbox. This usually only takes a couple of minutes after you submit your application. Be sure to check your Spam folder. 

If you are happy with your quote, follow the instructions provided in your quote email to log in to our website. 

3. Purchase Your Bond

Sign the provided indemnity agreement and pay your invoice. 

Once we receive payment, we will send a copy of your NJ auto dealer bond form to your email. The original bond will be sent via mail.

All New Jersey auto dealers licensed through the New Jersey Motor Vehicle Commission (NJMVC) must have a $10,000 auto dealer bond. This includes:

• New auto dealers
• Used auto dealers
• New and used auto dealers
• Boat dealers
• Leasing dealers

An auto dealer bond is in place to protect the general public. It acts as a financial guarantee, ensuring that a bonded auto dealer conducts business ethically and legally. If they fail to do so, the bond covers any financial losses caused by the dealer’s misconduct. 

Every auto dealer bond is a contract between three parties:

1. Principal – The auto dealer that needs to get bonded.
2. Obligee – The organization requiring the dealer to get bonded (NJMVC).
3. Surety – The company issuing and financially backing the bond (ex. JW Surety Bonds).

This bond functions like a line of credit to a licensed auto dealer. When a claim is found to be legitimate, the surety company pays the claimant. However, the dealer is then responsible for repaying the claim. 

For more information, see our guide: How Do Surety Bonds Work?

New Jersey auto dealer bonds need to be renewed yearly on March 31st.

This bond’s expiry aligns with the annual expiration date of a New Jersey auto dealer license. Both must be renewed in order to stay compliant with state regulations. 

• With JW Surety Bonds, you never have to worry about missing your expiry as we always send out renewal reminders. One of our long-time clients, Jeanine, often declares herself as “the most forgetful woman alive”. Yet, she hasn’t missed a renewal in the 8 years she has been with us. 

If someone files a claim against your New Jersey surety bond, an investigation will begin.

1. This investigation looks to see if the claim is valid (so you don’t pay for false claims). Additionally, it assesses whether the claim falls within your bond’s coverage. 
2. If the bond claim is deemed valid, your surety will pay. The amount they pay will only be up to the total amount of your bond. For example, for a New Jersey Auto Dealer bond, they would pay up to $10,000.
3. You are liable to repay the surety and may need to arrange a repayment schedule with your surety.

To get a New Jersey Auto Dealer License, fill out an application through the NJMVC. You will need the following assets, information, and documents.

• Established place of business that includes a vehicle display space and an office with a desk, chair, landline telephone, working safe, and more. 
• Deed or lease to place of business.
• Copy of Fictitious Name Filing Certificate.
• Copy of New Jersey Sales Tax Certificate of Authority issued by the NJ Treasury Division of Taxation. 
• Proof of federal taxpayer identification number from the Internal Revenue Service (IRS). 
• Copy of landline telephone bill.

Following your application, you will also need a:

• New Jersey Auto Dealer Bond in the amount of $10,000.
• Certificate of Insurance for liability coverage in the amount of $100,000 - $250,000 for bodily injury and $25,000 for property damage.
• Passing mark on the dealer exam (first-time applicants only).