Key Points

• New Jersey dealer facility flexibility expands through off-site service centers and service-only locations.
• Temporary dealer licensing pathway allows operations to begin while licensing requirements are finalized.
• Pending dealer license applications may benefit immediately under the law's retroactive application provisions.

A proposed New Jersey law would give new car dealers more flexibility in how they set up their facilities and allow them to operate sooner through a temporary license while they finish the licensing process.

This is a significant development for franchised new car dealers across New Jersey. This alert outlines what the bill does.

Once signed, this bill will take effect immediately. On June 30, 2026, it passed both the New Jersey Senate and Assembly by unanimous votes and now heads to Gov. Mikie Sherrill's desk for signature.

Main Provisions

1. Separates Servicing from Display

Under current law, a new motor vehicle dealer's place of business must be used for both the servicing and display of motor vehicles. This bill changes "and" to "or" — meaning your dealership facility can now be used principally for servicing or display. That single word makes a real difference in how dealers can configure their operations.

2. Creates Flexibility for Service Facility Locations

The bill gives dealers three options for where they maintain their service operations:

• Utilize space attached to the dealer's established place of business (the traditional model)
• Utilize a separate space on the same property as the dealership
• Establish an off-site service facility within the dealer's relevant market area (RMA).

For a state as densely populated as New Jersey, where real estate is scarce and expensive, this flexibility is a game-changer. Dealers who have been constrained by space limitations now have real options for structuring their service operations.

3. Applies Immediately — Including Pending Applications

The bill doesn't just apply to future license applications. It applies to all initial and renewal new motor vehicle dealer license applications, including those currently subject to a pending administrative proceeding before the Chief Administrator, the Office of Administrative Law, or on appeal.

If you have a pending application that has been held up over service facility issues, this law may provide immediate relief.

4. Updates Key Definitions

The bill modernizes the definition of "new motor vehicle dealer" to mean an authorized dealer of a motor vehicle franchisor — a newly defined term — rather than the outdated "agent, distributor, or authorized dealer of the manufacturer." This better reflects the modern franchise relationship.

Bipartisan Support

This legislation was sponsored by Senator Anthony Bucco (R-25), Senator Joseph Lagana (D-38), Assemblyman Antwan McClellan (R-1), and Assemblyman William Spearman (D-5). Bipartisan, unanimous passage signals strong legislative intent behind these dealer-friendly reforms.

If you're a New Jersey dealer — or a dealer in another state watching how these facility-flexibility issues develop nationally — my team and I are available to discuss how this new law impacts your dealership, your pending applications, or your long-term facility planning.

Feel free to reach out if you have any questions.

For more information, contact Seth L. Dobbs at sdobbs@foxrothschild.com or any member of Fox Rothschild’s Automotive Practice Group.

This information is intended to inform firm clients and friends about legal developments, including the decisions of courts and administrative bodies. Nothing in this alert should be construed as legal advice or a legal opinion. Readers should not act upon the information contained in this alert without seeking the advice of legal counsel. Views expressed are those of the author(s) and not necessarily this law firm or its clients. Prior results do not guarantee a similar outcome.