We’ve compiled this list of motor vehicle dealer license frequently asked questions, plus their answers, to help you navigate the road to getting your car dealer license. Don’t see your question here? Just ask it in the comment section!
Short on time? Read our 5 Easy Steps To Getting Your Car Dealer License post!
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Motor Vehicle Dealer License Frequently Asked Questions
Motor Vehicle Dealer: Basic Questions
Q: Who needs a car dealer license?
A: Every state will vary, but generally if you are selling even one vehicle that is not owned by you and used primarily for personal, family, or household purposes, then you could need a dealer license.
Not sure if you need a license? Check out this post “Do I Need a Dealer License To Sell Cars?”
Some states have a specific number of cars that you can sell a year before you need to apply for a car dealer license. Check your individual state guidelines and statutes to determine if you are exempt from getting a dealer license, or if you need to apply for one.
Q: What kinds of dealer licenses are there?
A: There are many types of dealer licenses. Your state will have their own set of license types, but generally they will fall into these categories:
- New Vehicle Dealer: sells new vehicles
- Used Vehicle Dealer: sells used vehicles
- Wholesale Vehicle Dealer: buys, sells, and exchanges vehicles to other dealers
- Recreational Vehicle Dealer: sells motorhomes, RVs, or other trailers equipped with living space
- Motorcycle Dealer: sells new or used motorcycles
- Trailer Dealer: sells new or used boat and travel trailers
- Manufacturer: manufactures new vehicles
- Distributor: imports new vehicles manufactured or assembled outside the United States
- Dismantler/Recycler: acquires vehicles to dismantle, destroy, or scrap for the sale of their parts
To get licensed, view our “5 Easy Steps To Getting Your Car Dealer License” post, or check out our state-specific tutorials below:
Motor Vehicle Dealer: Application Questions
Q: Where can I get a dealer license application?
A: Most states will have dealer license applications available online. Some states may require you call or request an application.
Q: How much does a dealer license cost?
A: The price you’ll pay for your dealer license will depend on what kind of vehicles you are selling and where you are located. The application fee for many states is around $200.
Q: Why do I need to submit a background check?
A: Background checks are required by many states to get your motor vehicle dealer license. The DMV is looking for not only crimes on your record, but examples of immoral behavior that would suggest you would not run an ethical dealership.
Q: If I have a felony or conviction on my record, can I still be approved for a car dealer license?
A: Have a previous felony? Check out this post on Getting a Dealer License With a Felony.
If you have been convicted of a previous felony, you will need to provide documentation that your civil rights have been restored. However, if the conviction is regarding a motor vehicle dealer crime, you will more than likely not be granted a license.
If you are not sure whether you are eligible for a car dealer license due to something on your record, you may be able to submit an abbreviated application. An abbreviated application will allow you to see if you would be granted a license before you go through the trouble of setting up your business location, obtaining a surety bond, and so forth.
To see if your state allows for an abbreviated application, contact your DMV licensing staff.
Q: Why do I need a surety bond?
A: You need a surety bond to get your dealer license. The bond protects your customers should you not run an ethical business. If someone feels you are running an unethical business, they can make a claim against your bond.
These surety bonds are commonly called a Motor Vehicle Dealer Bonds or Auto Dealer Bonds.
Q: How much does my Motor Vehicle Dealer Bond need to be? How much will it cost?
A: Use this interactive tool to find out your bond amount and bond cost.
Q: Can I get a dealer bond with bad credit?
A: Yes, having bad credit does not restrict you from getting approved for a dealer bond. You can get a free bad credit quote by clicking below.
Q: What constitutes a dealership location?
A: Many things come into play when establishing your business location, including:
- Office: Your office must be devoted exclusively for the use of your business with entry directly from the outside. Your office must have a desk, telephone, and filing cabinet for maintaining records. Some states even require you to have a certain number of chairs.
- Sign: Business sign must be readable from the street. Some states require it to be a certain square footage.
- Display area: Must be situated on the same property. Must be sufficient size for your type of dealership.
Many people ask if they use their residence as their dealership location. Many states are very specific and say you CANNOT use your residence as a dealership location. Contact your licensing board for more information.
Motor Vehicle Dealer: License Renewal Questions
Do you know when your motor vehicle dealer license expires? Check out this awesome infographic.
Q: How do I renew my car dealer license?
A: If you are a current car dealer, you will receive a renewal packet at least 30 days before the expiration date of your license. Follow the instructions in your packet. If you have questions or you did not receive a renewal packet, contact your local DMV.
Q: What happens if I am late renewing my car dealer license?
A: If you renew your license late, you will be charged a late fee. If you fail to submit your renewal application, you are not in compliance with the law. Depending on your state, you will most likely need to submit an entire dealer application which will be considered as a new application and processed accordingly.
Motor Vehicle Dealer License: Dealer Plate Questions
Q: What are dealer plates?
A: Dealer plates are special license plates that allow your cars to be legally driven away from your lot. If you are going to let your customers test drive your vehicles, you will want to order dealer plates.
A dealer may use their dealer plates on any vehicle that they have full ownership or control over. Only dealers, members of the dealer’s firm, and salespeople may control the use of dealer plates.
Q: How do I order more dealer plates?
A: Generally, a written request is required to receive more dealer plates. You will also have to pay for additional plates, which will vary depending on what state you are in.
Q: How long does it take to get new dealer plates?
A: It can take up to 90 days to get additional dealer plates for your dealership. Your local DMV will issue you a temporary dealer plate for every actual dealer plate you order. This will allow time for your actual dealer plates to be ordered and shipped to you in the mail, while still allowing your vehicles to be driven off your lot.
Motor Vehicle Dealer: Business Questions
Q: I’m moving my business location. What do I need to do?
A: You’ll need to contact your local DMV. They will most likely have a Dealer Business Certification Correction Application that you will need to complete. A fee may also be charged.
Q: I want to open another location. What do I need to do?
A: Contact your local DMV. They will most likely require you to complete a Supplemental Application for Dealers. A fee may also be charged.
Q: I want to add another owner to my dealership. What do I need to do to stay in compliance with the law?
A: Contact your local DMV. They will most likely have a Dealer Business Certification Correction Application that you will need to complete. A fee may also be charged.
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