Are you ready to run a used car dealership in North Dakota? First, you need to go through the licensing process. We’ll guide you through every step to get your used car dealer’s license in the Peace Garden State.
Starting off right with your license is key. This avoids problems later on. First, you choose the right dealer license. Then, you register your business and pick a good location. You also need to get the right bonds and insurance. Finally, you must submit your documents and pay the fees. The North Dakota Motor Vehicle Division (MVD) is in charge of this. They have different types of licenses for what you will sell, like new cars, used cars, RVs, and trailers.
Ready to start your journey to owning a used car dealership? Let’s explore how to get your license together!
Key Takeaways
- The licensing process for a used car dealership in North Dakota involves several critical steps, including selecting the appropriate dealer license, registering your business, and securing the necessary bonds and insurance.
- The North Dakota MVD oversees the licensing process and offers various license types based on the types of vehicles you plan to sell, such as new motor vehicles, used motor vehicles, motor-powered recreational vehicles, trailers, and mobile/manufactured homes.
- Navigating the licensing requirements and regulations is essential to ensure a smooth and compliant start-up for your used car dealership in North Dakota.
- Understanding the zoning, facility, and display lot requirements is crucial for establishing a suitable business location for your used car dealership.
- Obtaining the required bonds and insurance coverage is a vital step in the licensing process to protect your business and comply with state regulations.
Importance of Obtaining a Used Car Dealer’s License
The importance of obtaining a used car dealer’s license in North Dakota is high. It gives you the right to sell used cars legally in the state. This process ensures dealers follow the state’s legal rules and maintain a reliable space for buyers. The North Dakota Motor Vehicle Division (MVD) manages the North Dakota used car dealer licensing process overview, including crucial steps.
Additionally, in North Dakota, renting a car dealer license is illegal. According to state regulations, each dealer must obtain their own license to legally sell vehicles. Renting or borrowing a dealer license from another individual or business is not permitted and can result in severe legal consequences.
This rule is consistent across the United States, where such practices are also illegal. Despite some individuals offering “dealer license rental” services, these are not legitimate and can lead to significant legal problems, including fines and potential criminal charges.
Getting Your North Dakota Dealer License: A Step by Step Guide
1. Choose Your Dealer License Type
North Dakota has various dealer licenses for different vehicles. You can apply for licenses to sell new and used cars, trailers, and even mobile homes. Each type requires you to meet certain requirements and pay fees to legally sell vehicles in the state.
New Motor Vehicle Dealer
Got a New Motor Vehicle Dealer license? You can sell new cars and trucks fresh off the assembly line. To get this license, you need a $25,000 bond and a $100 application fee. You also have to follow rules about how your sales lot looks, set by the North Dakota Motor Vehicle Division (MVD).
Used Motor Vehicle Dealer
With a Used Motor Vehicle Dealer license, you can deal in pre-owned vehicles. It also has a $25,000 bond requirement and a $100 application fee. You need a proper business site and sales lot that meet MVD’s standards, just like with new cars.
Motor-Powered Recreational (MPR) Vehicle Dealer
If you love selling off-road vehicles like ATVs, the MPR Vehicle Dealer license is for you. It asks for a $10,000 bond and a $25 fee. You must have the right kind of business and follow MVD’s rules for how your sales area looks.
Trailer Dealer
Want to sell trailers? You’ll need a Trailer Dealer license. It comes with a $10,000 bond, and you pay $30 for the application. Make sure your sales space and lot meet the state’s rules for safety and appearances.
Mobile Home and Manufactured Home Dealer
If you’re selling mobile or manufactured homes, a special license is required. It needs a $50,000 bond and a $35 application fee. Your business site must meet state and local zoning regulations to sell these homes.
If you’re thinking of starting a vehicle sales business in North Dakota, this info is vital. Picking the right license and following the state’s rules ensures your business runs smoothly. This paves the way for your success in the industry.
2. Registering Your Business
Before you file your dealer license in North Dakota, start by registering your business with the Secretary of State. You can do this online. It ensures your business is set up correctly and follows the law.
Obtaining a Tax Permit and EIN
After registering with the Secretary of State, get a tax permit from the North Dakota State Tax Commissioner and an Employer Identification Number (EIN) from the IRS. The tax permit makes sure your dealership pays state taxes correctly. The EIN is your business’s special tax identification number. These are important to be financially and legally ready for the dealer licensing process.
3. Establish a Business Location
After your business is official, find a good spot for your used car dealership. North Dakota MVD has rules your place must follow. Make sure to pick a location that fits these guidelines.
Zoning Requirements
Your business must be located in the right zoning area for selling cars. The zoning requirements for used car dealerships explain what areas are okay for your shop. Talk to local zoning experts to confirm your location is suitable.
Facility Requirements
Your dealership building must meet certain regulations. It needs to have heating and good lighting in the office. Plus, a service area for vehicle repairs is a must. Make sure your business follows these facility requirements for used car dealerships.
All your business documents must be stored at your shop. This is another important rule to remember.
Display Lot and Signage Requirements
North Dakota MVD needs your dealership to have enough space outside. You’ll need a display lot at least 2,500 square feet big. Also, put up a sign that’s 32 square feet with 10-inch tall letters for easy street viewing.
| Requirement | Details |
| Minimum Business and Display Lot Size | At least 2,500 square feet |
| Business Sign Size | At least 32 square feet with letters at least 10 inches tall |
| Signage Visibility | Clearly visible from the street |
| Service/Repair Area | Required for MPR vehicle dealers |
| Business Records | Must be maintained at the established place of business |
| Facility Heating and Lighting | Adequate heating and lighting required for the office |
4. Obtaining Required Bonds and Insurance
In North Dakota, used car dealers must get certain bonds and insurance before they can start selling cars. These rules make sure dealers are financially responsible. They must follow the law while selling cars in the state.
Auto Dealer Bond Requirements
Dealers need a surety bond to handle claims or debts in North Dakota. The bond’s size depends on what type of cars they sell. For instance,
- Places that sell trailers and motor-powered RVs need a $10,000 bond.
- All other dealerships, like those selling new and used cars, need a $25,000 bond.
- For mobile/manufactured homes, you’ll need a $50,000 bond.
Getting a $25,000 bond might cost a dealer $125 to $2,250 a year. This price changes with the dealer’s credit score and more. To get this bond, dealers and a surety company must fill out a North Dakota Auto Dealer Bond Form correctly. They have to include all the necessary details.
Garage Liability Insurance Requirements
Used car dealers in North Dakota also must have good liability insurance. The state doesn’t set the insurance amount. But it must meet state rules to cover bases. This insurance protects dealerships and customers if anything happens on the lot or with the cars.
5. Submit Your Application & Fees
Now, it’s time to submit your application and supporting documents. This includes your business registration, proof of the auto dealer bond, and evidence of garage liability insurance. You’ll also need to pay the license fees, which can range from $25 to $100.
6. Pass the Dealership Inspection
The North Dakota MVD will conduct an inspection of your dealership to ensure it meets all space and layout requirements. Make sure your location complies with their regulations before this step.
You will also have to submit the fees for the on-site inspection of your dealership location. These fees are as follows:
- New/used vehicles and trailers: $100
- MPR vehicles: $450
- Mobile/manufactured home dealers: $0
After that, you must pay $20 for each dealer license plate (for new and used dealers), or $10 for other vehicle license types.
7. Receive Your Dealer License (and Renew!)
Congratulations! After successfully completing all these steps, you’ll receive your official North Dakota dealer license. Remember, dealer licenses require renewals, so stay informed about the renewal process to maintain your business operation.
Conclusion
Getting a used car dealer’s license in North Dakota is detailed. It involves knowing the various license types, registering your business, and finding a compliant spot. You’ll also need to get bonds and insurance. Finally, submit the needed paperwork and fees. This process lets you open a used car dealership in North Dakota.
The state has these rules to ensure fairness and honesty in the market. It also helps dealers know how to run their businesses correctly.
Our guide can help those who want to start a used car dealership in North Dakota. It stresses the importance of meeting the state’s license rules. These rules help everybody play by the same standards and trust the used car market.
It is key to know the North Dakota licensing process for your used car business to do well. Following all the steps and state laws is crucial. This approach can lead your business to grow and succeed in the used car world.
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FAQ
What are the key steps to get a used car dealer’s license in North Dakota?
The main steps are picking the right license type, registering your shop, finding a suitable place to work, and getting the needed bonds and insurance. Then, you need to send the required papers and fees to North Dakota’s Motor Vehicle Division (MVD).
What types of dealer licenses are available in North Dakota?
In North Dakota, there are several types of dealer licenses. These include ones for new and used motor vehicles, motor-powered recreational vehicles (MPR), trailers, and mobile or manufactured homes.
What are the requirements for registering a used car dealership in North Dakota?
First off, you need to register your business with the Secretary of State. Then, get a tax permit from the State Tax Commissioner. Also, you should secure an Employer Identification Number (EIN) from the IRS.
What are the location requirements for a used car dealership in North Dakota?
Your used car dealership location must follow zoning laws and have a good building. It also has to meet the state’s rules on how the lot and signs should look.
What bonds and insurance are required to get a used car dealer’s license in North Dakota?
Dealers need to have an auto dealer bond and garage liability insurance. This is a must to get and keep their license according to North Dakota’s laws.
Source Links
- https://www.acvauctions.com/blog/how-to-get-a-dealer-license-in-north-dakota
- https://www.dot.nd.gov/forms/sfn02932.pdf
- https://www.suretybonds.org/documents/how-to-become-auto-dealer-ebook.pdf
- https://www.ftc.gov/business-guidance/resources/dealers-guide-used-car-rule
- https://www.dot.nd.gov/sites/www/files/documents/Drivers – documents/Motor Vehicles/dealer-handbook.pdf
- https://www.suretybondprofessionals.com/north-dakota-car-dealer-license/
- https://www.bondexchange.com/north-dakota-auto-dealer-bond-a-comprehensive-guide/
- https://www.suretynow.com/learn/auto-dealer-bond/how-to-get-dealers-license-without-a-lot
- https://www.topmarq.com/articles/how-to-get-a-dealers-license-to-start-selling-cars-291
- https://www.suretynow.com/learn/auto-dealer-bond/wholesale-vs-retail-auto-dealer-license