The Full North Dakota Dealer License Guide
Interested in launching a new car dealership in North Dakota? To get started with your business idea, you will need to obtain a North Dakota dealer license. It will allow you to operate legally in the state.
The process of licensing your dealership is elaborate. You have to fulfill a rigorous list of requirements that ensure your suitability for the job. One of the notable criteria that you have to meet is to post an auto dealer bond.
In the guide below, you can learn the steps necessary to get your North Dakota dealer license, so you can kickstart your dealership smoothly.
1. Determine the right auto dealer license type
The state licensing authority is the Motor Vehicle Division (MVD) at the North Dakota Department of Transportation. You can obtain a few different types of licenses, depending on your exact activities:
- New Motor Vehicle Dealer – new and used vehicles
- Used Motor Vehicle Dealer – used vehicles only
- Motor-Powered Recreational (MPR) Vehicle Dealer – motorcycles, ATV’s, UTV’s, snowmobiles, and unconventional vehicles
- Trailer Dealer – trailers
- Mobile Home and Manufactured Home Dealer – mobile homes, manufactured homes, motor homes, and travel trailers
2. Get to know the North Dakota dealer license requirements
The MVD has strict criteria regarding the issuing of licenses to dealers. The list includes providing the following:
- Personal information for owners
- Business entity information
- Proof of established place of business
- Service or repair area (for MPR dealers only)
- Service department (for mobile home and manufactured home dealers only)
- Garage liability insurance (for new and used vehicle dealers)
- Franchise agreement (for new vehicle dealers only)
- Surety bond
Full information about all the state requirements is available in the Dealer Handbook.
3. Prepare your application documents
North Dakota auto dealers have to complete the MVD’s Application for Dealer’s License form.
Besides fulfilling the requirements described in the previous section, applicants also need to obtain the following documents from other bodies:
- Employer Identification Number (EIN) from the IRS
- Zoning approval from your local authorities
4. Post the required North Dakota auto dealer bond
One of the indispensable requirements that you have to fulfill as a part of the licensing is to post a surety bond. It guarantees your legal compliance as a dealer.
The amounts of the North Dakota auto dealer bond depend on your license type:
- $25,000 for new and used vehicle dealers
- $10,000 for trailer and MPR vehicle dealers
- $50,000 for mobile home and manufactured home dealers
Your exact premium is formulated on the basis of the required amount, as well as the strength of your finances. If your personal and business finances are in good shape, the typical rates are between 0.75% and 5% of the bond amount.
5. Apply with your complete document set
The next step in the licensing process is to submit your full application and paperwork. You have to mail them to:
Motor Vehicle Division
608 E. Boulevard Ave.
Bismarck, ND 58505
Together with it, you have to pay the applicable license fees:
- $100 for new and used vehicle dealers
- $25 for MPR vehicle dealers
- $30 for trailer dealers
- $35 for mobile home and manufactured home dealers
During the application process, you need to have an on-site inspection of your business location. The fees for the initial inspection are as follows:
- $100 for new and used vehicle dealers and for trailer dealers
- $50 for MPR vehicle dealers
- No fee for mobile home and manufactured home dealers
The dealer license plates cost $20 each for new and used dealers and $10 each for all other license types.
6. Keep your license active yearly
The licensing period for car dealerships in North Dakota runs from January 1st until December 31st of each year. To keep your license active, you have to renew it before the expiration date. Afterwards, you will have to pay a $100 penalty.
There is a requirement for new and used vehicle dealers to sell more than 8 vehicles per year in order to be allowed for renewal.
Need more information about getting a North Dakota dealer license and bonding? Don’t hesitate to get in touch with us at 877.514.5146.