The Arizona Auto Dealer License (aka a motor vehicle dealer license) is a permit issued by the Arizona Department of Transportation (ADOT) Motor Vehicle Division (MVD) that authorizes individuals or businesses to engage in the sale, purchase, or exchange of motor vehicles as a dealer in Arizona. Anyone that sells more than six vehicles per year must obtain a license. In this article, we will start with the types of licenses you can apply for, the steps you must take to apply, and how to renew your license.
In Arizona, individuals or businesses selling, purchasing, or exchanging six or more motor vehicles in any given year must be licensed by the state as an auto dealer. The license is required to operate as a auto dealer in the state legally.
It's important to note that there may be additional requirements and regulations specific to each type of license. These requirements vary per license but generally include proper record-keeping, compliance with consumer protection laws, and adherence to zoning and signage regulations. We will go into more detail about each license type in the next section.
A new auto dealer is an individual or business that buys and sells new and used motor vehicles.
A used auto dealer is an individual or business that buys and sells seven or more used motor vehicles in a year.
A wholesale auto dealer is an individual or business that sells used motor vehicles to licensed auto dealers.
A public consignment auction dealer is an individual or business that conducts live auctions with a licensed auctioneer and provides live auction services to the public as per a consignment contract. A consignment contract is when a "consignor" supplies goods to a "consignee" to sell. In this case, you, the public consignment auction dealer, are the consignee.
A wholesale auto auction dealer is an individual or business providing auction services to licensed dealers in wholesale transactions. This type of dealer cannot buy, sell, or own any vehicles that are part of their auction services. They can only sell the vehicles to licensed auction dealers.
A broker is an individual or business that helps customers find a specific vehicle and assists in purchasing that vehicle for a commission.
An automotive recycler is an individual or business that obtains vehicles to dismantle, sell, or dispose of their parts.
The first step is to sign up for an account on the ADOT Force website. This account is how you will be able to access the necessary license applications and how you will submit all required materials. Registering on an ADOT Force account is very simple. All you need is your first and last name and a password to complete your registration.
You will find the dealer license application once you have logged into your account. The Arizona Motor Vehicle Division will also make an account for your organization. You can also pay for application-related fees once logged in.
The second step is to decide what dealer license type to apply for. The Arizona dealer application provides seven options:
We cover what each license type does above.
The third step is to figure out what business type your business is. Arizona requires all license holders to operate as legal entities. Registering your business allows the state government to recognize your business as a legal entity. Arizona provides seven options for you to choose from:
Arizona auto dealers are most commonly either sole proprietors, LLCs, LPs, or for-profit corporations. A sole proprietorship can also be sometimes called an "individual." Operating as an individual is the easiest for solo dealers since registering as a sole proprietor requires the least paperwork. However, as an individual/sole proprietor, you are not protected from your business's liabilities and taxes.
LLCs/LLPs are suitable for you if you wish to separate the liabilities of running a business from the owners of your business.
On the other hand, for-profit corporations are suitable for dealers who wish to raise outside capital for their dealership.
After choosing your business type, you can begin to register your business. Each business type has separate processes for registration.
For sole proprietors, file a trade name with the Arizona Secretary of State for $10. Fill out the Trade Name Registration Application and mail it to:
Secretary of State
Attn: Trade Name/Trademark
1700 W. Washington St., Fl. 7
Phoenix, AZ 85007-2808
Once this is done, you can apply for an EIN through the IRS. This is an optional step if you are a sole proprietor without employees. However, having an EIN may make it easier to get a bank account since some banks require an EIN to start a business bank account.
For LPs, file your Certificate of Limited Partnership and Qualification to be a Limited Partnership to:
Secretary of State
Attn: Limited Partnerships
1700 W. Washington St., Fl. 7
Phoenix, AZ 85007-2808
Corporations and LLCs must file Articles of Incorporation to:
Arizona Corporation Commission
1300 W. Washington St.
Phoenix, Arizona 85007
If you are a nonprofit corporation, submit the Articles of Incorporation for nonprofit corporations. If you are a for-profit corporation or an LLC, submit the Articles of Incorporation for for-profit or professional corporations. This can be done via physical mail to the address above, or online via the Arizona Corporation Commission website.
All licensed auto dealers, with the exception of wholesale dealers, are required to have a valid and permanent business location.
The next step is to establish a location for your business. The following requirements apply to all licenses except wholesale dealers:
The fifth step is to obtain the Arizona auto dealer bond. This bond is required for all licenses. Below is a chart of required bond amounts for each license:
Motor vehicle dealer bonds/auto dealer bonds are required to guarantee that the auto dealers will fulfill their legal obligations to the state of Arizona and their professional obligations to their clients. The surety bond serves as financial protection for auto dealers' customers. For example, suppose a dealer sells a car without a valid title. In that case, the consumer is entitled to make a claim against the dealer's auto dealer bond.
SuretyNow offers a convenient solution for obtaining your Arizona auto dealer bond. First, fill out our 3-minute form, and we will get back to you within the hour. You will receive your bond via email or mail.
The Transaction Privilege Tax (TPT) license is a tax on dealers for the privilege of doing business in Arizona. This license is required for all dealers. There are three ways to apply for a TPT license:
Online: Set up an account on AZTaxes.gov. Here are the instructions on how to create an account. You will typically receive your license certificate in the mail 7-10 business days after submitting your application.
Mail: Download and complete the Joint Tax Application for a TPT License and mail it to the following address:
Arizona Department of Revenue
PO Box 29032
Phoenix, AZ 85038-9032
It will typically take two weeks to receive your license.
In-person: Go to one of the following offices to deliver your completed application in person:
Phoenix Office:
1600 W. Monroe
Phoenix, AZ 85007
Mesa Office:
55 N. Center
Mesa, AZ 85201
Tucson Office:
400 W. Congress
Tucson, AZ 85701
If you submit your materials in person, you will usually receive your license the same day you submit your application.
Fingerprinting is required for owners with at least a 20% stake in the business. To get fingerprinted, create an account with the Arizona Applicant Processing Services. After creating your account, follow the steps listed below:
The next step is to put all these materials together and fill out the ADOT Auto Dealer Application. The following materials are required for the application:
To renew an Arizona Auto Dealer License, use your ADOT Force account. The portal will give you detailed instructions on how to renew your license. Typically, the renewal costs $100. Here are the general steps to renew your license:
