How to Get a North Carolina Dealer License [2022 Guide]

Published: Aug 9, 2022
A dealer license is required by anyone who wants to sell more than 5 vehicles per year in North Carolina.

If you want to trade in cars, trucks or any other type of vehicle, you’ll need to apply to the Division of Motor Vehicles at the Department of Transportation (NCDOT) for your license.

What is a North Carolina Dealer License?

All motor vehicle dealers in the state of North Carolina are required to obtain an NC dealer license before they can trade.

Having a dealer license certificate shows that an auto dealer has met the minimum requirements set by the state. These requirements ensure that a dealer has undergone relevant training, has a proper place of business and has the correct insurance.

It also shows that the trader has taken out a surety bond to protect the state and public from financial loss in case of non-compliance with state regulations.

Who Needs a Dealer License in North Carolina?

The state of North Carolina allows individuals to sell, display or exchange no more than 5 cars in their name in a 12-month period. So, if you want to sell more than 5 vehicles per year, you’ll need to get a dealer license.

Having a license also allows you to sell cars that aren’t registered in your name.

Something that’s not possible for those without a license.

Dealer licensing is handled by the License and Theft Bureau in the Division of Motor Vehicles of the Department of Transportation (NCDOT).

You can find out more about your North Carolina auto dealer bond, and get a free quote, by filling out the application form below.

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Step-By-Step Licensing Process

There are a number of licensing requirements you’ll need to meet in order to get your North Carolina dealer license. These include:

  • Having a physical location for your dealership
  • Getting proper insurance
  • Posting an auto dealer bond

See below for a full breakdown of the license application process.

1. Find Out The Right Auto Dealer License Type

There are five vehicle dealer license types available in North Carolina. If you want to trade as an auto dealer in the state, you’ll need to apply for one of the following licenses.

  • New vehicle dealer license – This type of license allows you to sell both new and used vehicles
  • Used vehicle dealer license – This type of license only allows you to sell used vehicles
  • Distributor license – A distributor license allows you to sell new vehicles to new vehicle dealers
  • Wholesale dealer license – A wholesale dealer license means you can sell used motor vehicles to used vehicle dealers
  • Manufacturer license – This type of license allows you to work with the distributors who distribute the vehicles made by the manufacturer

2. Get to Know The North Carolina Dealer License Requirements

North Carolina car dealer licenses are issued by the Division of Motor Vehicles (DMV) at the NCDOT.

You’ll need to fulfill the following dealer license requirements in order to be eligible for a motor vehicle dealer license:

  • Provide information about owners and officers
  • Provide business entity information
  • Provide the first page of your corporate charter if the business is incorporated with the North Carolina Secretary of State
  • Have a comprehensive liability insurance company policy that covers dealer license plates
  • Post a $50,000 auto dealer bond for your first business location or salesroom, and an additional $25,000 surety bond for every extra location or salesroom
  • Those applying for a used motor vehicle dealer license will need to provide proof of passing a 12-hour licensing course approved by the DMV

There are also a number of business location requirements that you’ll need to meet before you can apply for your license. These include:

  • Retail dealers must have an established salesroom that has at least 96 square feet of floor space. This salesroom must be in a permanent, enclosed building, separate from any living quarters, residence or other business and have a separate entrance.
  • Wholesale dealers must have an established office to keep books, records and files. This office must have at least 96 square feet of floor space.
  • Dealers must display a sign at their business premises. This sign must have block letters no less than three inches high and on a contrasting background. The sign must clearly and distinctly show the trade name of the business.

Before you submit your dealer license application, you’ll need to arrange for your place of business to be inspected by the NC License and Theft Bureau .

3. Attend a Pre-Licensing Course Specific to Motor Vehicle Dealers Only

If you want to sell used cars in the state of North Carolina, you’ll need to complete a dealer education course before you apply for your license.

This pre-licensing course needs to be completed at some point in the 12 months before you submit your application. If you’re a new applicant, the licensing course will last 12 hours. If you’re renewing your auto trader’s license, your course will last just 6 hours.

4. Prepare Your Paperwork

Getting your paperwork in order is an important part of securing your North Carolina auto dealer license. As well as a completed dealer license application form, you’ll need to submit:

  • Proof that you meet all local and state zoning ordinances
  • Proof that you’ve filed an assumed business name with the Register of
  • Deeds in your county if your business operates under any other name than the owner’s
  • Your Trader’s License from the municipality or county where you operate.

You can consult the full list of paperwork required for your license in NCDOT’s Dealer License Requirements document.

5. Obtain the Necessary North Carolina Auto Dealer Bond

Everyone applying for a car dealer license in North Carolina is required to post a North Carolina Auto Dealer Bond. This is one of the most important licensing requirements and needs to be submitted via the official form.

A key condition of the bond agreement is that licensed and bonded dealers comply with Articles 12 and 15 of Chapter 20 of the North Carolina General Statutes (NCGS). If dealers violate any of the conditions of the statute, and thus cause harm to the state or to the general public, a claim can be filed against the bond. This ensures that neither the state nor the public will suffer a financial loss as the result of unscrupulous business practices.

The required bond amount is $50,000 for your first location and $25,000 for each additional location (if applicable)

To get bonded, however, you only need to pay a fraction of this amount. To determine your exact bond cost, (known as your bond premium) your bond company will look at a number of factors including your:

  • Personal credit score
  • Business statements
  • Financial statements
  • Fixed and liquid assets

If you have a good credit score and your surety company considers you low risk, you’ll pay a lower bond premium. If your bond company believes that there’s a higher chance a claim will be made against your bond, they may deem you high risk. In this case, you’ll need to pay a larger premium in order to get bonded.

Whether you’re a high or low risk applicant, Lance Surety Bonds will use our A-rated, treasury-listed network to find you the best price for your bond. Helping you to get bonded fast and at an excellent rate.

6. Apply With Your Full Document Set

Once you’ve filled in all your forms and assembled your paperwork, you’ll need to send your completed application to:

North Carolina Department of Transportation

Division of Motor Vehicles

License and Theft Bureau

Raleigh, NC 27697-0001

7. Undergo the Renewal Process Annually

Your North Carolina auto dealer license will be valid for one year from the date it’s issued. If you want to continue your operations in the state, you’ll need to renew it before it expires.

In order to renew your license, you’ll need to continue to meet all minimum dealer license requirements in North Carolina and maintain your surety bond.

How Much Does a North Carolina Auto Dealer License Cost?

There are a number of costs involved when applying for a North Carolina auto dealer license. These include:

  • $90 for each place of business
  • $20 for every sales representative
  • $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

What is The Difference Between a Wholesale & Retail License?

If you apply for a retail dealer license, you’ll be able to sell new and/or used cars directly to the public. Retail dealers are also able to sell cars to other registered dealers.

If you apply for a wholesale dealer license, you’ll only be able to sell to other registered dealers and won’t be allowed to sell directly to the public.

How Do You Get a Dealer’s License in NC Without a Lot?

Dealers in Raleigh and the rest of North Carolina don’t necessarily need a lot to get a dealer’s license. However, you will still need a place of business where you can keep your files and records. These business premises must meet the standards set by the licensing body.

If you don’t have a lot and plan to display cars for sale outside your home or in another location, you’ll need to check with local authorities first. There may be rules on how and where you can display your cars, so make sure to talk to your city or municipality before you start trading.

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Robin Kix

Robin Kix is currently the Renewal Department Manager. Since joining Lance Surety in 2014, she has helped thousands of businesses throughout the nation remain compliant at the federal, state and local level. She has significant experience supporting commercial bond lines, particularly in the automobile, transportation and construction industries. Robin and her team work together to create a positive customer service experience at the time of every policy renewal, whether that be finding the best pricing or offering additional assistance.

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