Im looking in to maybe getting a used car dealer license in New Jersey and wondering if anyone here has one. Is it hard to get? Ive been reading about it on the DMV's website and it says you need a lot with a sign and a $10,000 bond. Does that mean I put up $10,000 I really don't see the point of the bond. Any info would be appreciated. Thanks!
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Anyone Have A Car Dealer License?
- Thread starter MyiBill
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I'm guessing the Bond is there to ensure that you are serious about this and it isn't some fraudulent scheme. Regardless of not agreeing with the bond, if they say you need, then you need it.
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You want the bond and you need it as the DMV states. The purpose of a surety bond for used car dealerships is to protect customer in the event you defraud them. In that case, after it has been determined that you are at fault, the bond will reimburse your customer. When you get a bond, you'll be subject to a credit check. If you cannot be approved for the bond then you cannot open your dealership.
It's insurance, basically.
It's insurance, basically.
One of the online car sellers ran a foul of that requirement and had to exit the state. I think they found a work around or something, I forget.
I would think though if they remove that requirement the need for a higher bond should be instituted since its much easier to set up shop on the internet and defraud people.
Regarding the bond, Ive been looking around and it seems (as another member said) its based more on credit and I would only have to put down a percentage in cash. Needing a physical location isn't ideal but if I must Id be willing, Ive seen some places for rent for around $1,000 a month by me. Id mostly be reselling online eBay, craigslist, etc. and overseas.
Unless you're selling high-end/classic cars to buyers with a multi-step verification process I'd be weary shipping overseas. Too many insurance costs.
Are you planning on buying cars from auction? If not you don't have to say what you'll be doing but I am curious.
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I understand why the policy exists since it keeps car sales more legitimate but I'm not too sure the extent of the requirement. I.e. If I'd have to sell cars at a physical location for a certain period of time while selling online.
Yes, I want to be able to access the "dealer only" auctions. I have a few contacts in china that expressed interest, but either way even just selling in the US I feel that with eBay, craigslist, etc. theres a big market out there. Plus I can use the location as a storage facility for my other business.
I think technically you always need the physical location and if they found out you didn't have it, you could be fined and have your license revoked. This law most likely dates back to the same time as the laws that ban direct sales from the manufacturer. The same law also states that the location must have a desk, chair, landline phone and a safe in an enclosed office for the storing of paperwork.