Your Easy Louisiana Car Dealer License Guide

Launching an auto dealership in Louisiana is a promising business endeavor. Your first step to realizing your entrepreneurial idea is to obtain a Louisiana car dealer license. It is an indispensable process that you have to go through, which enables you to operate legally in the state.  

The licensing procedures for new and used car dealers are different. The Used Motor Vehicle Commission is in charge of overseeing used car dealers. For new car dealers, the Motor Vehicle Commission is the licensing authority.

In both cases, applicants have to provide a Louisiana auto dealer bond. It is an obligatory requirement that ensures you will follow all applicable laws, including the Louisiana Revised Statutes, Title 32.

Before you can apply for your dealer license, you have to complete a few administrative steps. They include obtaining an Employer Identification Number (EIN), creating your business entity in Louisiana, and registering with the state Department of Revenue.  

In the sections below, you can find detailed information about obtaining the Louisiana dealer license that you need.

The licensing process for new car dealers

The Louisiana Motor Vehicle Commission offers a list of license types for new dealers.

You have to choose the corresponding one for your specific operations:

• New motor vehicle dealer
• Distributors or wholesaler
• Manufacturer
• Factory branches
• Distributor branches
• Used motor vehicle facilities operated by new motor vehicle dealers, motor vehicle lessors, specialty vehicles dealers, or recreational products dealers
• Broker
• Motor vehicle lessor franchisor
• Motor vehicle lessor
• Motor vehicle lease facilitator
• Specialty vehicle dealer
• Recreational products dealer
• Factory representative
• Distributor representative
• Satellite warranty and repair centers

The paperwork that you have to provide to obtain your license is the following:

• Business entity documents
• Ownership data
• Business location and zoning requirements
• Access to criminal records for owners and key personnel
• Financial standing
• Business location insurance
• $20,000 surety bond

The licensing period runs for one year. The exact date for renewal that you have to meet depends on which Commission District you are based in.

The licensing fees are:

• $1,000 for distributor, converter, motor vehicle lessor franchisor, wholesaler, and distributor branch license
• $500 for auto shows, trade shows, and expositions license
• $300 for new motor vehicle dealer, specialty vehicle dealer, recreational products dealer, motor vehicle lessor, used motor vehicle dealer, factory representative, broker, distributor representative, lease facilitator and satellite warranty and repair centers license
• $30 for motor vehicle salesman and motor vehicle lessor agent license

Getting a Louisiana used car dealer license

The licensing body for used car dealers in the state is the Louisiana Used Motor Vehicle Commission. You can obtain the following types of licenses:

• Used motor vehicle dealer
• Rent with the option to purchase
• Crusher
• Automotive dismantler and parts recycler
• Daily rental
• Auction
• Used parts and accessories

The requirements for each used car license type may vary slightly, but the most important ones that apply to all include the following:

• Completed application form
• Salesperson application form
• Business entity documents
• Personal information about owners
• Criminal background check (if a salesperson has had a felony in the last 10 years)
• Business sign that meets the set criteria and a picture of it
• Completed training for one key person from the dealership
• On-site inspection
• $50,000 surety bond

In addition to fulfilling the listed requirements, you need to cover the Commission’s licensing fees. The two-year company license costs $400, while the salesperson license is $25 per year. The licensing period runs for two years.

Obtaining an auto dealer bond

In order to obtain a Louisiana dealer license, you have to provide a surety bond. Used car dealers have to obtain a $50,000 bond, while new car dealers have to meet a $20,000 bond requirement.

The purpose of the auto dealer bond is to safeguard the interests of your customers against potentially illegal activities you may engage in as a car dealer. A harmed party can file a claim against your bond in order to seek fair reimbursement. The maximum sum is the full bond amount that you have posted.

In order to get bonded, you need to cover a small fraction of the required bond amount. For auto dealers with stable finances and a good credit score, the typical rates are in the range of 0.75% to 5%.  Your exact bond cost is set once you provide full information about your personal and business finances. 

Have any further questions about getting your Louisiana car dealer license and bonding? Don’t hesitate to get in touch with us at 877.514.5146.