How to Get a North Carolina Dealer License

Published: Jul 3, 2018
North Carolina dealer license guide


To sell any more than 5 vehicles per year in North Carolina, you will need to apply for a license from the Division of Motor Vehicles at the Department of Transportation (NCDOT). To get licensed you need to fulfill several licensing criteria and requirements – have a physical location for your dealership, obtain proper insurance, as well as a North Carolina auto dealer bond, and more.

See below for a comprehensive breakdown of the NC dealer license application process!

**NEW:** Download our FREE e-book guide containing comprehensive information on how to start your own dealership, from getting licensed and bonded to securing financing and cars for your lot!

Pick a license type

There are five major vehicle dealer license types in North Carolina. These are:

  • New vehicle dealer
  • Used vehicle dealer
  • Distributor
  • Wholesale dealer
  • Manufacturer

According to the definitions in §20-288 of the North Carolina General Statutes (NCGS), distributors sell new vehicles to new vehicle dealers, whereas wholesale dealers sell used motor vehicles to used vehicle dealers. Manufacturers work with distributors who distribute the vehicles that the former produce.

There are slightly different licensing requirements for the various license types, so you first need to pick the license type you want to apply for.

NC Dealer License Requirements

Licenses in the state are issued by the NCDOT. The NC dealer license requirements are fairly straightforward and simple to comply with. Here is a list of all the requirements:

  • Secure a business location that meets all local and state zoning ordinances and has a sign that displays the trade name of the dealership in block letters that are at least 3 inches high
    • “Retail” dealers must have an established salesroom that has at least 96 square feet of floor space
    • “Wholesale” dealers must have an established office to keep books, records, and files, that has at least 96 square feet of floor space
  • File an assumed business name with the Register of Deeds in your county if the business is operated under any other name than the owner(s) name
  • Attach the first page of the corporate charter to the application if the business is incorporated with the Secretary of State
  • Obtain a “trader’s license” from your municipality and county
  • If you will be applying for an NC used car dealer license, pass and provide proof of passing a 12-hour licensing course approved by the Division
  • Obtain a comprehensive liability insurance company policy that covers dealer plates
  • Obtain a $50,000 auto dealer bond for your first business location or salesroom, and an additional $25,000 for every additional location or salesroom
  • Arrange for an inspection of your dealership location to be conducted by the NC License and Theft Bureau prior to submitting your application
  • Complete and submit the NC dealer license application form
  • Pay license fees
    • $90 for each place of business
    • $20 for every salesperson
    • $20 for factory or distributor representatives
    • $36 for the first 5 dealer registration plates (and $18 for every additional plate)
    • $18 for every dealer transporter plate
    • $25 for 25 temporary markers

Surety bond requirement and cost

The North Carolina auto dealer bond form states that the condition of the bond agreement is that licensed and bonded dealers will comply with Articles 12 and 15 of Chapter 20 of the NCGS. These articles specify the obligations and responsibilities that licensed dealers have towards the state and public in providing auto dealer services.

If they should violate any of these conditions and thereby cause harm to the state or public, a claim can be filed against their bond. The surety, after investigating the claim, will typically extend compensation to claimants. The maximum amount of such compensation can be as high as the full $50,000 amount of the bond.

To get bonded, applicants only need to pay a fraction of that amount though. Surety bond cost is determined on the basis of applicants’ credit score, their business and financial statements, their liquidity and assets, as well as their resume. The higher applicants’ credit score and the better their financial indicators, the lower their bond rate is!

Want to know how much your bond rate would be? Complete our bond application form and we will shortly provide you with a free quote! There are no obligations attached to requesting a quote.

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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.