A North Carolina motor vehicle dealer license is a type of commercial license issued by the North Carolina Division of Motor Vehicles (DMV). It allows an individual or business to engage in the sale or lease of motor vehicles within the state of North Carolina. This license is required by law for anyone involved in the business of buying, selling, or trading motor vehicles as a dealer. In this article, we discuss when a dealer license is needed, the types of dealer license that are available, the steps involved in getting a dealer license in North Carolina, and also how to renew a dealer license in North Carolina. We’ll also get a bit into why an auto dealer bond is needed in North Carolina.
North Carolina allows individuals to sell no more than 5 vehicles within a 12-month period without a license. If you want to sell more than 5 vehicles per year, you must get a dealer license. The license also allows individuals to sell vehicles that aren’t registered to their own name.
This license is only required for those who want to make a profit from selling motor vehicles. If you are someone who wants to trade their vehicles instead, visit this article for details on car auctions.
There are five different types of motor vehicle dealer licenses. North Carolina’s license application gives applicants five options:
The dealer license allows individuals or companies to sell used and/or new vehicles to members of the general public for profit. A “used motor vehicle” dealer license only allows individuals to sell used vehicles. It costs $97 to obtain this license.
The wholesale dealer license allows individuals or companies to sell used motor vehicles to other used motor vehicle dealers. Unlike dealers with the more common general dealer license, wholesale dealers are not able to sell to the general public. It also costs $97 to obtain this license.
The factory branch license allows individuals or companies to have a branch office maintained to sell new motor vehicles to new motor vehicle dealers. It costs $140.25 to obtain this license.
The distributor license allows individuals or companies to sell new motor vehicles to new motor vehicle dealers. It costs $97 to obtain this license.
The manufacture dealer license allows individuals or companies to manufacture and/or assemble new motor vehicles. It also allows license holders to act as distributors of motor vehicles. It costs $210.25 to obtain this license.
Now that you have a good understanding of the different types of licenses, let’s get into the nitty gritty steps of how to actually get a dealer license in North Carolina!
The first step is to establish a business location for your dealership. North Carolina DMV has a few requirements depending on what kind of dealership you have.
A retail dealership is one where motor vehicles are sold at. For retail dealerships, you should have an “established salesroom” of at least 96 square feet.
A wholesale dealership is one where motor vehicles are sold to dealers, not customers. For wholesale dealerships, you should have an “established office” also of at least 96 square feet. A lot room is not required.
For both types of dealerships, you must display your trade name on a sign with lettering of at least three inches in height. The lettering also must contrast well with the background color.
The second step is to obtain a North Carolina Motor Vehicle Dealer Bond. This is also sometimes known as a North Carolina auto dealer bond. The North Carolina DMV requires applicants to obtain a $50,000 bond for your first location and a $25,000 bond for each additional location if you plan on expanding your business.
On the license application for your license, you must fill out the North Carolina Motor Vehicle Dealer Surety Bond form in order to show proof of your bond.
Motor vehicle dealer bonds/auto dealer bonds are required to guarantee that the auto dealers will fulfill their legal obligations to the state they operate in as well as their professional obligations to their clients. The surety bond is basically a financial protection to those who work with motor vehicle dealers. For example, if a dealer sells a car without a valid title, then the consumer is entitled to make a claim against the dealer’s auto dealer bond.
SuretyNow offers a convenient solution for obtaining your North Carolina motor vehicle dealer license bond. The process is simple. Simply fill out our 3 minute form and we’ll get started looking around to get you the best quote. We usually get back to our customers within the hour with quotes during work hours. If you’re satisfied with the price of the bond and make a successful payment, we will mail you a copy of the bond, which you can include with your licensing application. Click "Price it" below if you need a NC auto dealer bond. Our form intake process takes 2 minutes.
The third step is to file your business name under the Register of Deeds in the county where your business will be located.
The purpose of registering with the office of the Register of Deeds is so the North Carolina state government has a record of your business. The following types of businesses are required to register with the Register of Deeds office:
Generally speaking, auto dealers are most commonly either sole proprietors, LLCs, LPs or for profit corporations. Sole proprietorships are the easiest for solo dealers, since they require the least amount of work to get started. LLCs/LPs are helpful for established businesses that want to separate the liabilities of running a business from the owners. Lastly, for profit corporations are helpful for dealers that wish to raise outside capital for their dealership.
If your business is a sole proprietorship or general partnership, this webpage details steps you must take to register your business. If your company is one of the other types of businesses, you can find registration steps here.
Regardless of the type of business you choose to register, please make sure that the name you register your business under is equivalent to the name provided on your dealer license certificate. This is to ensure that the North Carolina DMV will be able to find proof that you have a registered business.
The fourth step is to purchase garage liability insurance covering the license plates of your motor vehicles.
Garage liability insurance covers bodily injuries to non-employees or damages to the property owned by non-employees while on the grounds of the dealership or while testing out the dealer’s vehicles. It also covers the damage that could be caused to a customer’s vehicle while it is being worked on, moved, test-driven, or parked on the premises of the dealership.
You can purchase your garage liability insurance from any insurance company, including us. With your chosen insurance company, you must come up with a comprehensive insurance policy that covers your dealer license plates. The company must then provide a Certificate of Insurance which you will submit with your license application. On the application itself, you must provide the name of your insurance provider as well as your insurance policy number.
The license application is included in the North Carolina DMV New Dealer Packet. To submit this application, either mail or take the forms in-person to the following address:
Division of Motor Vehicles
3129 Mail Service Center
Raleigh, NC 27697
The application requires applicants to fill out the following information:
Pre-licensing courses are only required for “used motor vehicle” dealer licenses. Applicants must complete a 12-hour licensing course within 12 months of applying if it is their initial license they are applying for. A 6-hour course is required if the applicant is renewing the license.
This requirement doesn’t apply to the following:
After a year of obtaining the North Carolina motor vehicle dealer license, you must renew it. Here is the Dealer Renewal Packet, which contains all the information and forms you need to renew your license.
To renew a North Carolina motor vehicle dealer license, you will need to follow the renewal process outlined by the North Carolina Division of Motor Vehicles (DMV). Here are the general steps involved:
It is crucial to ensure that you submit your renewal application and payment before the expiration date of your current license to avoid any lapse in your dealer license.
