How to Get a North Carolina Dealer License [2020 Guide]

Published: Jan 3, 2020
north carolina dealer license

 

To sell any more than 5 vehicles per year in North Carolina, you need to get licensed with the Division of Motor Vehicles at the Department of Transportation (NCDOT). Obtaining your North Carolina dealer license entails that you fulfill several licensing requirements. You need to have a physical location for your dealership, get proper insurance, and post an auto dealer bond, among others. 

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See below for a comprehensive breakdown of the 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!

1. Find out the right auto dealer license type 

There are five vehicle dealer license types that you can obtain. The North Carolina dealer license classes are:

  • New vehicle dealer – new vehicles
  • Used vehicle dealer – used vehicles
  • Distributor – new vehicles to new vehicle dealers
  • Wholesale dealer – used motor vehicles to used vehicle dealers
  • Manufacturer – work with distributors who distribute the vehicles that the former produce

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. Here are the requirements that you have to fulfill:

  • Information about owners and officers
  • Business entity information
  • Business location requirements (size, office, sign that displays the trade name of the dealership in block letters that are at least 3 inches high)
    • Established salesroom that has at least 96 square feet of floor space (retail dealers)
    • Established office to keep books, records, and files, that has at least 96 square feet of floor space (NC wholesale dealer license requirements)
  • First page of the corporate charter if the business is incorporated with the Secretary of State
  • Proof of passing a 12-hour licensing course approved by the DMV (used car dealers) 
  • Comprehensive liability insurance company policy that covers dealer plates
  • $50,000 auto dealer bond for your first business location or salesroom, and an additional $25,000 for every extra location or salesroom
  • Inspection of your dealership location to be conducted by the NC License and Theft Bureau prior to submitting your application

3. Prepare your paperwork

north carolina dealer licenseTo start your licensing process, you have to fill in the dealer license application form. You also need to ensure that you meet all criteria detailed above.

In addition, you have to get a number of documents from other authorities:

  • Proof of meeting all local and state zoning ordinances
  • Assumed business name from the Register of Deeds in your county if the business is operated under any other name than the owner(s) name
  • “Trader’s license” from your municipality and county

You can consult the full list of criteria in the Dealer License Requirements document.

4. Obtain the necessary North Carolina auto dealer bond 

The North Carolina auto dealer bond is one of the indispensable requirements that you have to satisfy. You need to submit it in the official form. 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. If you violate any of these conditions and thus cause harm to the state or public, a claim can be filed against the bond. 

The required bond amount is $50,000 for the first location, and $25,000 for each additional location. To get bonded, however, you only need to pay a fraction of that amount. Your exact cost is determined on the basis of your personal credit score, business and financial statements, and fixed and liquid assets.

5. Apply with your full document set

In order to submit your complete application packet, you have to mail all paperwork to:

North Carolina Department of Transportation

Division of Motor Vehicles

License and Theft Bureau

Raleigh, NC 27697-0001

You have to cover the relevant license fees as well. They are as follows:

  • $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

6. Undergo the renewal process annually

Your North Carolina auto dealer license is valid for one year from the issuing date. If you want to continue your operations in the state, you have to renew it before it expires. The renewal process entails continuing your surety bond, as well as meeting all other licensing requirements. 

For further questions regarding the North Carolina dealer license and bond, don’t hesitate to call 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.