How to Get an Auto Dealer License in Oregon

Who needs an Oregon motor vehicle dealer license?

In Oregon, individuals or businesses that sell more than five cars in a calendar year need to obtain an Oregon motor vehicle dealer license.

There are three types of motor vehicle dealer licenses you can obtain in the state of Oregon:

• An Oregon new motor vehicle dealer is a business authorized to sell brand-new vehicles to consumers within the state.
• An Oregon used motor vehicle dealer is a business authorized to sell pre-owned vehicles to consumers within the state.
• An Oregon powersports dealer offering a diverse selection of motorcycles, mopeds, snowmobiles, and ATVs, catering to outdoor enthusiasts' diverse needs and preferences.

Step 1: Establish a permanent location of business

The first step to becoming a vehicle dealer in Oregon is to establish your place of business. The state of Oregon requires you to have a permanent business structure for your dealership in order to obtain your license. Your location must follow the requirements listed below:

• Have a sufficient display space to showcase one or more vehicles
• Display a sign on the exterior of the building or on the premises that identifies the dealership’s name
• Display your vehicle dealer certificate once received

You can also find the requirements in the Oregon Vehicle Dealer Application Packet. 

You must also obtain a zoning approval from your local government. You can often obtain this by requesting a zoning confirmation letter. For example, in Oregon City, the official website provides instructions for how one could request the letter. You must attach this letter along with your license application to prove that you follow all zoning regulations in your city or county.

Step 2: Choose a business type

To initiate the application process, you need to officially register your business. Securing a motor vehicle dealer license mandates that your dealership holds a formal legal status. In Oregon, dealerships usually fall into one of four business categories: sole proprietorship, partnership, limited liability company (LLC), and corporation. 

Sole proprietorships offer efficient management and direct oversight, but they could limit access to resources and expose owners to unrestricted personal liability. Partnerships provide a collaborative approach to decision-making and resource pooling, yet conflicts may emerge, and partners collectively shoulder liabilities. Limited Liability Companies (LLCs) provide liability protection and tax versatility to members, although they might have constrained administrative obligations and longevity. Corporations provide shareholders with liability protection and the ability to access capital markets, but they entail complex regulations and the possibility of double taxation.

Choose the business type that is best suited for the kind of dealership you want to operate.

Step 3: Register your business

After choosing your business type, you must register your business with the state. For all business types, you must apply for a Federal Employer Identification Number (FEIN), which is also known as the federal tax ID. If you have employees, you must also apply for an Oregon business ID number (BIN). To get a BIN, apply through the Oregon Department of Revenue. The Oregon Business Identification (ID) Number is a unique identifier assigned to businesses operating in the state of Oregon. It's used by various state agencies for tracking and managing business activities, taxes, licenses, and other regulatory matters. This ID number helps the state keep accurate records of businesses and their interactions with government entities.

For all businesses, you can either register online OR mail/deliver the physical form to the following address: 

Public Service Building
255 Capitol St. NE, Suite 151
Salem, OR 97310.

For sole proprietorships and partnerships, if you are using your legal name as your business name you don’t have to file any form. If you are not using your legal name as your business name, you must register with your Assumed Business Name form. 

For corporations, register with the Articles of Incorporation.

For LLCs, register with the Articles of Organization. 

For limited partnerships, register with the Certificate of Limited Partnership. 

Once you have printed and filled these forms out, you can mail them to the following address:

Secretary of State
Corporation Division
255 Capitol St. NE, Suite 151
Salem, OR 97310-1327

Step 4: Take an 8-hour pre-licensing course

The next step is to take a pre-licensing education course.  This course is 8 hours and is required for all applicants. This course teaches applicants the basics of being an auto dealer. This includes the laws and regulations associated with dealerships, operational tips like how to record keep, and much more. To find a class, contact one of the following approved education providers: 

Oregon Vehicle Dealer Association
‍503-399-9199 ‍
‍

@ Your Pace Online
‍877-724-6150
Contact@atyourpaceonline.com
 

5th Gear Enterprises
‍503-523-2339
 

Auto Dealers Certified Education School
‍503-362-6839 or 800-447-0302 

At the end of the course, you will receive your Certificate of Education which you will submit along with the rest of your license application. 

Step 5: Obtain the Oregon auto dealer bond

In the state of Oregon, you are required to acquire a $50,000 surety bond to become a licensed vehicle dealer. The auto dealer bond plays a crucial role in guaranteeing that auto dealers fulfill their legal obligations to the state and uphold their responsibilities to their customers. These bonds serve as a financial safety net, providing protection to individuals who engage with motor vehicle dealers, ensuring they have a recourse in case of any misconduct or violations.

For instance, if a dealer were to sell a car without a valid title, a consumer would have the right to file a claim against the dealer's auto dealer bond to seek compensation for any resulting losses.

We’ve helped many auto dealers with getting their auto dealer bond. If this is something you need, please feel free to let us know. Our intake process only takes 3 minutes. 

Step 6: Purchase liability insurance

Liability insurance is a form of insurance that offers financial security to individuals or businesses if they are held legally accountable for causing harm or damage to others or their property. The main objective of liability insurance is to handle the expenses related to legal claims, judgments, or settlements arising from such incidents.

In Oregon, you must obtain insurance with the following coverage amounts:

• $25,000 for bodily injury or death of one person in one accident
• $50,000 for bodily injury or death of two or more people in one accident
• $20,000 for property damage in one accident

Liability insurance allows your insurance company to pay for damages instead of you paying out of pocket. For example, if one person were to be injured at your dealership and you had to pay for the medical expenses, your insurance company could cover damages worth up to $25,000. 

To obtain liability insurance, you can purchase from insurance companies like Next Insurance. You can also go to your local insurance agent to come up with an insurance policy that works best for your dealership. 

The following vehicles are exempt for this insurance requirement:

• Antique motor vehicles that have been issued permanent registration
• Class I or Class III all terrain vehicles (ATVs)
• Snowmobiles
• Trailers 
• Campers and travel trailers

Step 7: Complete and submit all required licensing documents

The next step is to complete the Application for Three Year Vehicle Dealer Certificate. Completing this application and getting it approved allows you to operate your dealership in the state of Oregon for three years. The application requires the following information

1. Legal name of the business 
2. Business or trade name
3. Federal Employer Identification Number
4. Business location address 
5. Mailing address
6. Supplemental location address (if you have more than one business location)
7. Business type
8. Applicant and owner/partner/officer’s personal information

The above information completes the license application form, but in addition to the form, there are other forms you must submit along with the application. These required documents are listed below:

• Auto dealer bond form 
• Liability insurance certification
• Dealer education certificate
• Copies of government-issued ID/s of all owners, partners, member, officers, etc. of the business
• Supplemental certificate (if you have more than one business location)
• Check to pay the $1,187 application fee

All supplemental documents are provided in the application packet. 

To submit your application, you can visit or mail all of the above documents to the following address:

DMV Business Licensing Unit
1905 Lana Ave NE
Salem, OR 97314

Applications usually take 6-8 weeks to process. Once processed, you will receive your license certificate in the mail. When acquired, make sure you display your certificate in your dealership. 

Renew your Oregon Vehicle Dealer License

Unlike most states that require a renewal every year, Oregon requires a renewal of your dealer license every three years. When it is time to start the renewal process, you will receive a renewal packet from the state of Oregon. To renew your license, you must fill out the Renewal Application for Three Year Business Certificate. The process is the same as that of the initial application, except for a few changes:

• Instead of 8 hours of dealer education, you are only required to do four hours.
• Instead of filling out the fee information on the first page of the license application, fill out the billing list form attached in the renewal packet.
• You do not need a new zoning approval letter, unless you have a new or additional business location. 

Mail this application to the following address:

DMV Business Licensing Unit
1905 Lana Ave NE
Salem, OR 97314

Once your renewal has been approved, you will get your renewed license in the mail.