How to Start a Driving School in New Jersey: A Step-by-Step Guide

Here you’ll learn everything you need to start your Driving School in New Jersey

New Jersey’s process for establishing a driving school are straightforward. Driving schools may over both the classroom and behind-the-wheel portions of the driver education and training required for all teen drivers.

Most driving schools offer behind-the-wheel only, although they may also provide instruction for points-reduction and defensive driving courses.

How to open your driving school in New Jersey

• Driving schools require a license to operate in the Garden State.
• Driving school instructors also need licenses.
• Each driving school needs a supervising instructor with at least 500 hours of behind-the-wheel instruction before the school is licensed.
• Your vehicles may be used for the road tests.
• You may have most any location for your school, but you should probably not operate out of your home.
• Records must be kept for at least three years.

Driving School Licensing and Requirements

General requirements

To operate a driving school in New Jersey, you will need to be licensed by the state. Licenses are valid for 1 year, and expire in December–suggesting you should apply later in the year for a school to start in January/February. Renewal applications must be submitted at least 30 days in advance.

Unlike most states, New Jersey does not require payment of the application fee until after your location and vehicles are approved.

Your application packet must include:

• A completed application signed by an owner, officer, or partner.
• Copies of your deed or lease and phone bill or phone installation order for the business
• A designated supervising instructor
• A list of all driving instructors
• Proof of Worker’s Compensation coverage for all employees.
• A Certificate of Insurance.
• A surety bond
• Samples of advertising which cannot be readily changed–such as telephone directory listings.
• Other items outlined in the application packet.

The current regulations for driver training schools are available at New Jersey Administrative Code Title 13, Chapter 23. The Motor Vehicle Commission links to the forms you need on their website.

New Jersey requires the following minimum liability insurance coverage:

• $250,000 bodily injury for one person
• $500,000 bodily injury for two or more people
• $50,000 property damage.

If you have employees, you must carry workers’ compensation insurance covering them–and you–in the event of injury while on the job.

Driving School Owner’s License

Driving schools may be owned by sole proprietors, partnerships, LLCs, or corporations. You will determine your business structure in consultation with your accountant and attorney.

All owners will have to be listed on the application, and must be fingerprinted and have a background check. In addition, all owners must complete a Child Support Certification.

Driving Instructor’s License

While no specific requirements are set for driving school owners, instructors must demonstrate qualification before they receive a license from New Jersey. The application for a driving instructor’s license is included in the school application packet. Driving instructors must meet the following requirements:

• 21 years old
• Three or more consecutive years experience with a driver’s licence.
• Pass tests covering law-knowledge, driving ability, and vision.
• Complete a 6 to 8 hour course on Defensive Driving approved by the Motor Vehicle Commission or sponsored by the National Safety Council.

Instructor licenses expire in December; the fee for an initial license is $75, and for a renewal, $50.

Supervising instructor

Every driving school must designate a supervising instructor. This person must be a licensed driving instructor for at least two years before the application for the driving school license.

The supervising instructor must also must be able to demonstrate that they has provided a minimum of 500 hours of behind-the-wheel instruction. Previous driving school owners may provide that evidence. A supervising instructor must also have completed a three-credit New Jersey Driver Education college course offered by a college or university licensed by the New Jersey Commission on Higher Education.

Employees and Agents

Employees must have clean records–no convictions for certain crimes.

Your driving school may have “agents”. Agents accompany students to a driver testing center to take the road test or obtain a permit.

Driving school agents must

• Be at least 18 and have a driver’s license with less than 9 points on it.
• Pass a criminal background check.
• Of good moral character

Vehicles

Your vehicles must have dual controls on the foot brake and clutch (if any). Lettering on signs indicating “STUDENT DRIVER” must be at least 3” high. Seat belts must be used by both the student driver and instructor.

Your vehicle may be used by students for their driving test. One of your instructors or agents must accompany the student. Valid identification, instructor’s license/agent identification certificate, and insurance information must be with the instructor/agent.

Location

You are generally free to establish your business anywhere you see fit–meeting the requirements outlined below. You can choose to have classroom space, or you may conduct classroom driver education at off-site locations, including local public or private schools.

Your location cannot be in a location which might give the appearance that you are connected with the Commission on an official bases. There is no official distance requirement, but the Commission will look at a number of factors including proximity, business name, and other advertisements.

Your place of business may not be in a liquor store, bar, grocery store, restaurant, tent, a temporary stand or address, or completely through a telephone answering service.

You may only operate from your residence unless the office and toilet facilities (if open to the public) are separated from the living quarters, and the office has an external entrance.

You must display your license conspicuously in your office.

If you are providing classroom instruction at your own site, the classroom must provide at least 15 square feet per student. Adequate lighting, heating, ventilation, and toilet facilities are required, as are sufficient educational aids.

Don’t ever give a student or parent the impression that your instruction guarantees receiving a driver’s license–you may mention your pass rate.

Records and Contracts

You will need to keep records of all students for at least three years. The MVC may inspect and make copies records at anytime. New Jersey expects records to be kept electronically.

You need to create a student record which contains the following information:

• Student’s name
• Driver license/permit number
• Instructor’s name
• Dates/times/types of instruction

A similar instructor record must also be kept, including

• Instructor’s name, license number, dates of employment.
• A running record of the hours of instruction provided

Records may be kept either on paper or electronically.

A written “Statement of Services” which lists:

• A cancellation policy which requires 24 hours advance notice.
• Dates and times for all lessons.
• 72 hour ability to rescind the agreement.
• Otherwise complies with the sample Statement of Agreement provided by the State. Using the State’s language is probably the best course of action.

The Driving School Curriculum in New Jersey

Most of New Jersey’s public schools offer at least the classroom portion of Driver’s Education, although driving schools are permitted to contract with their local schools for those courses.

The New Jersey classroom course must last for at least 30 hours, and the behind-the-wheel course must last for 6 hours.

New Jersey expects the classroom portion of the course will cover the following topics; you will have to provide an outline of your curriculum as part of your application.

• Knowledge of New Jersey motor vehicle and traffic laws as well as organ donation
• Safe driving practices, including avoiding aggressive drivers
• Driving on different surfaces and in different kinds of traffic.
• Driver responsibility and accident reporting
• Defensive driving
• Drugs, alcohol, and mental attitudes
• Distracted driving
• Maintenance and emergencies
• Basic driving skills

In New Jersey, new drivers have to no required hours of supervised driving in addition to time driving as part of driver’s education. New drivers, however, must have their learning permit for a set period of time. Teens need to wait at least 6 months before taking the road test.

Supervised driving requires a licensed driver to be in the front seat next to the driver. The supervising drivers may be driving instructors, parents, guardians, and others. To count as a supervising driver in New Jersey, the person must either be a driving instructor, or

• A licensed driver who is a member of the family and over the age of 25 years
• A spouse of at least 21 years old

Commercial Driver’s License Instruction

New Jersey does not require specific licensing to offer CDL instruction, nor is instruction required to obtain a CDL. That said, CDL instruction programs are allowed in New Jersey.

Starting a Small Business in New Jersey

Your driving school is not just subject to the requirements for driver’s education in New Jersey. You also need to establish your Driving School as a small business, and have to consider a number of factors. The form of business you take up, as well as the procedures, are appropriate topics of conversation with your lawyer and accountant. The considerations we offer here are not legal advice, but should provide you with things to think about as you set up your business.

Business Registration

All businesses need to register in New Jersey, especially the business name—the “doing business as” certificate. Banks may not be willing to set up your account until you have that DBA form. We’ll include where to register in the business structures below.

You will also need to obtain a Federal Employer Identification Number. Banks may need it for your business accounts, and you may be wanting to employ people. To obtain an EIN, go to the IRS website and complete the application form you find linked there.

You should also register with the New Jersey Treasury Department for tax purposes.The forms are also available to be printed on paper.

Business name

Before you get going, you’ll want to check to see if the business name you want is in fact available in New Jersey. You can search the New Jersey database, if you are going to be adopting an LLC or corporate business structure.

Sole Proprietorship

Owning your own business is the easiest one to set up, but also may open you to liability concerns. As a sole proprietor, your business is simply part of your life. You keep a separate set of books, and complete a Schedule C for your 1040 form every April.

Sole proprietorships can expose the proprietor for full liability, even with insurance. That may mean that if you are sued, you may lose your home and property, as well as your personal bank accounts and other assets. This risk may not be worth the ease and independence.

In New Jersey, the big step you have to take is to register your trade with the clerk of each county in which you have a place of interest.

Corporations and LLCs

You may set up a full corporation (“Inc.”) as your business structure. Corporations limit your liability for loss to your investment in it, as a general rule (although banks may require you to be obligated personally if you take out a loan to get your business going). This form of business keeps your personal assets safe.

As an owner of a corporation, you’ll have to set up your driving school consistently with the rules for corporations in New Jersey.. You’ll also have to decide whether to be an S Corporation or a C Corporation. Generally, the S Corporation form is set up for small businesses. It allows income and taxes to pass through to the owners. You will want to discuss these forms with your attorney and accountant.

You may be able to set your driving school up as an LLC in New Jersey. The LLC form provides the same limited liability as a Corporation, but do not have to comply with the corporate formalities most states require, including items like bylaws, required stockholder meetings, and minutes (although minutes of meetings are probably a good idea).

You’ll have to discuss the advantages and disadvantages for the LLC with your attorney and accountant.

Both Corporations and LLCs file with the Secretary of State. In addition to name reservation, you’ll to file Articles of Incorporation for Corporations, or Formation, for LLCs.

Now What Do I Do?

Once you’ve complied with all the legal requirements to be both a driving school and a small business in New Jersey, you need to get students.

Getting students requires marketing—largely on the internet. You will need the following systems set up to obtain students:

• A website—focused on the types of students you want to attract, and aimed at your locality.
• The website should also include a blog, which allows you write about a variety topics and engage in Search Engine Optimization—which will drive traffic to your site.
• A Facebook page, linked to your website, to become noticed and drive traffic.
• Getting testimonials from successful students.

Marketing is something you will have to devote time to. DrivingSchool.Marketing can help you get the best bang for your marketing buck.

Conclusion

New Jersey is a densely populated state with a lot of drivers. Because the state has no minimum requirement of hours of behind-the-wheel driving before new drivers go for their road test, your marketing hook is to be there to help parents teach their teens to drive–buy giving them good, strong experience during the months the teens wait before taking the test.

Disclaimer: This page is part of DrivingSchool.Marketing’s series of state and provincial pages designed to help entrepreneurs like you start driving schools. States change their regulations, or the web pages they host their forms. While we believe these rules are accurate as of the date of publication, we cannot guarantee full accuracy. Please let us know if you spot any problems.

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Josh Meah

Josh is the CEO of DrivingSchool.Marketing. His goal is to be the marketing and business development partner of driving schools around the world, helping them become thriving businesses while also expanding general awareness for the importance of traffic safety standards and education.

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