Hawaii Auto Dealer License: The Full Guide [2020]

Published: Jan 2, 2020
hawaii auto dealer license

 

Planning to become a car dealer in Hawaii? You need to pass a licensing process with state authorities to ensure your legal compliance. The Hawaii auto dealer license is necessary if you want to sell more than 3 vehicles per year. 

In order to get licensed, you need to comply with the requirements set for this type of professionals in the state. One of them is to post an auto dealer bond. It guarantees you will follow the laws applicable to car dealers. 

In this guide, you can find the essential information that you need to launch your business smoothly. 

1. Find out the right auto dealer license type 

The licensing authority for Hawaii auto dealers is the Motor Vehicle Industry Licensing Board at the state Department of Commerce and Consumer Affairs. You can obtain the following Hawaii auto dealer license types:

  • New Vehicles – selling new and used vehicles 
  • Used Vehicles, Motorcycles and Scooters – selling used vehicles, new and used motorcycles and scooters over 49cc 
  • Auction – selling at auctions

2. Get to know the Hawaii dealer license requirements

There is a list of criteria set by the Board that you have to fulfill. It includes providing:

  • Information about owners and about the business entity
  • Proof of business location ownership or lease agreement
  • Self-inspection report about your business location (written description and site plan)
  • Photos of the location
  • A financial statement (less than 1 year old) provided on the official form
  • Salesperson application (minimum 1 per applicant, but not necessary for partnerships and sole proprietors)
  • Customer trust account (for auction license applicants)
  • Contract agreement with manufacturers and distributors (for new vehicle dealers)
  • Motor vehicle repair dealer license or a letter from a Hawaii repair dealer (for new vehicle dealers)
  • A line of credit or a surety bond 

3. Prepare your paperwork

hawaii auto dealer licenseYou have to complete the application form in order to start the licensing process. 

Besides fulfilling the requirements in the previous section, you also need to ensure you have the following documents from other authorities:

  • Business entity registration with the Business Registration Division (BREG) – for a corporation, partnership, LLC, or LLP
  • “Filed-stamp” copy of the Application for Registration of Trade Name for entities using trade names from BREG 
  • Zoning compliance documents for your business location from your local zoning authorities

4. Obtain a line of credit or a Hawaii auto dealer bond 

You need to obtain a line of credit from a federally insured financial institution or from a financing source having a net worth of at least $50 million. The required amounts are the following:

  • New Vehicles – $500,000
  • Used Vehicles, Motorcycles and Scooters – $50,000
  • Auction – $100,000

If you cannot reasonably get a line of credit, you can obtain a Hawaii auto dealer bond instead. The amounts are:

  • New Vehicles and Auction – $50,000 for less than 10 vehicles per month and $200,000 for more than 10 vehicles per month
  • Used Vehicles – $25,000 for less than 60 vehicles per month and $100,000 for more than 60 vehicles per month
  • Motorcycles and Scooters – $10,000

In order to get bonded, you have to cover a small percentage of the required amount. It is typically between 0.75% and 5% for applicants with stable finances. The most important factors that affect the bond premium are your personal credit score, business finances, and any fixed and liquid assets. 

5. Apply with your full document set

Whenever you have compiled all necessary documents, mail them together with your completed application to

Motor Vehicle Industry Licensing Board

DCCA, PVL Licensing Branch

P.O. Box 3469

Honolulu, HI 96801

You also have to pay the applicable fees to get your Hawaii dealer license. 

If you are applying between July 1st of an even-numbered year and June 30th of an odd-numbered year:

  • New vehicles – $1,172 (Honolulu) and $684 (islands)
  • Used vehicles – $588 (Honolulu) and $393 (islands)
  • Auction – $978

If you are applying between July 1st of an odd-numbered year and June 30th of an even-numbered year:

  • New vehicles – $611 (Honolulu) and $367 (islands)
  • Used vehicles – $319 (Honolulu) and $221 (islands)
  • Auction – $514

6. Renew your license 

The licensing period for Hawaii auto dealers runs from July 1st of an even-numbered year until June 30th of the next even-numbered year. If you want to keep your license active, you have to renew it before the expiration date. The Board sends notices for renewal about 6 weeks in advance of the deadline. 

 

Have further questions about the Hawaii auto dealer license and bonding procedure? You can reach us at 877.514.5146.

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Victor Lance is the founder and president of Lance Surety Bond Associates, Inc. He began his career as an officer in the U.S. Marine Corps, serving two combat tours. As president of Lance Surety, he now focuses on educating and assisting small businesses throughout the country with various license and bond requirements. Victor graduated from Villanova University with a degree in Business Administration and holds a Masters in Business Administration (MBA) from the University of Michigan's Ross School of Business.