New Jersey Auto Dealer Bonds Overview
One of the most important requirements you will have to satisfy when submitting your New Jersey dealer license application is obtaining an auto dealer bond. Auto dealer bondsare required in almost every state, in order to guarantee that certain rules and laws are upheld and that car buyers are protected.
Like other types of surety bond agreements, failure to comply with the provisions of the dealer bond agreement can lead to a claim filed against the dealer. All valid claims need to be reimbursed with a sum not exceeding the total value of the bond.
Here is an overview of the New Jersey dealer bond requirement.
Bond Name: New Jersey Motor Vehicle Dealer Bond
Total Value: $10,000
Obligee: Motor Vehicle Commission
Business Licensing Services Bureau
Dealer Licensing Unit
P.O. Box 171
225 East State Street
Trenton, NJ 08666-0171
Valid until: March 31
This surety bond is required from new and used-car dealers alike. Read on for more valuable information, such as calculating your cost and applying online.
New Jersey Auto Dealer Bond Cost
There’s a simple way to estimate your bonding costs. Compared to other states, New Jersey has a relatively low required total value. Still, the $10,000 amount is not what dealers are required to pay.
New Jersey auto dealer bonds are paid for in annual premiums, which mostly depend on the applicant’s credit score. Applicants in the good-credit-score category (above 650) typically pay around 1% to 1,5% of the bond amount, i.e., only between $100 and $150 a year.
|Surety Bond Cost by Credit Score|
|Surety Bond Name||Bond Amount||Above 700||Between 650-699||Between 600-649||Below 599|
|New Jersey Motor Vehicle Dealer Bond||$10,000||$100-$200||$150-$300||$200-$400||$300-$700|
Besides your credit score, there are a number of other factors that can influence your auto dealer bond cost. The information in your credit report as well as your financial statements may also be considered.
Our How Much Does a Surety Bond Cost? page contains some valuable tips on reducing your premiums. You will also find a surety bond cost calculator, which will enable you to get a rough estimate of your bond price.
Bad Credit Dealer Bonds in New Jersey
Bad credit bonding is generally harder, because surety underwriters consider applicants with credit issues to be more likely to trigger a claim, and therefore a higher risk.
We developed our Bad Credit Program to help auto dealers struggling with bad credit, so they can remain in compliance. While bonding premiums are higher, they rarely exceed 7%, which for a $10,000 auto dealer bond means no more than $700 a year. And if you follow our cost-saving tips, you can reduce it further still.
New Jersey Auto Dealer Bond Renewal
Auto dealer bonds in New Jersey expire on March 31st of each year, which means dealers need to apply for renewal before that date.
Our clients needn’t worry about missing the deadline, as we always send out renewal reminders ahead of time. Bond quotes do not vary significantly year after year, unless there is a change in your credit report or financial situation.
New Jersey Dealer License - Application Requirements
Your initial application needs to contain a number of important facts about your dealership. Besides obtaining a dealer bond, you will also have to:
- Submit photographs of your premises
- Obtain insurance - between $100,000 and $250,000 for bodily injury and $25,000 for property damage
- Have your location approved by local authorities
- Submit a copy of New Jersey Sales Tax Certificate of Authority
Be sure to consult with the website of the New Jersey Motor Vehicle Commission for a full list of licensing requirements. The license is issued for a 12-month period, and needs to be renewed before it expires. The same is true for your auto dealer bond.
Important: You need to submit proof of obtaining a surety bond and insurance only after you you receive notice of preliminary license approval.
Get Your New Jersey Auto Dealer Bond Today!
You are now equipped with the information necessary to start your online application. It doesn’t require more than a few minutes to submit.
Shortly after you complete it, we will contact you with a free bond quote and do our best to issue your bond form in as little time as possible. For any questions you have, do not hesitate to call us at 866.450.3412.