Oklahoma Auto Dealer License Guide

Types of Dealer Licenses

In the state of Oklahoma, new and used auto dealers are governed by two different departments: the Oklahoma Motor Vehicle Commission (OMVC) and the Used Motor Vehicle & Parts Commission (UMVPC). 

The OMVC licenses the following dealers:

• New automobile, truck, and bus dealers
• New motor home & RV towable dealers
• New powersport dealers
• Manufacturers/distributors

The UMVPC licenses the following dealers:

• Used motor vehicle dealers
• Franchised used motor vehicle dealers
• Used motor vehicle dealer auctioneers

Both commission boards meet to process applications on the second Tuesday of each month. If you’re applying for a license governed by the OMVC, you must submit your applications and all required materials at least eight days before the meeting. If your license is governed under the UMVPC, you must submit your documents eleven days prior. 

Step 1: Establish a business location

The first step is to establish a location for your business. Establishing a location gives you a business address which you will used to fill out your required documents for business registration, license application, and other forms. Oklahoma requires dealers’ locations to fulfill the following requirements:

• Must be a permanently enclosed, non-residential building
• Must have a sign identifying the business that is at least 32 square feet and has lettering at least 6 inches tall
• Must keep sign outside the dealership where it is easily visible to the public
• Must have an indoor showroom separate from the service area to showcase new vehicles (only for new motor vehicle dealers)
• Must have a paved/gravel area for customer parking
• Must have an area separate from public areas to store equipment, tools, and other necessary materials for service or warranty purposes
• Obtain zoning approval from your local government 

Step 2: Register your business

The next step is to register your business with the Oklahoma Secretary of State and the Oklahoma Tax Commission. To become a licensed dealer, your dealership must first be a recognized legal entity. The most common types of business structure are the following:

• Sole Proprietorship: A sole proprietorship is an unincorporated business owned and operated by a single individual, making them personally liable for all the business's debts and obligations. This is the most common type of business structure for dealers getting started.
• Limited Liability Company (LLC): A Limited Liability Company (LLC) is a business structure that provides limited liability protection to its owners while offering flexibility in management and tax treatment.
• Partnership: A partnership is a business structure in which two or more individuals or entities come together to jointly own and operate a business, sharing profits, losses, and responsibilities.
• Corporation: A corporation is a legal entity separate from its owners (shareholders) that enjoys limited liability and exists to conduct business, issue stock, and distribute profits.

To officially register your business, you must follow the steps below:

1. Choose a business name and reserve it on the Oklahoma Secretary of State Entity Filing webpage. “Name Reservation” is at the bottom of the page. After you’ve clicked on the link, you will be taken to another page where you will be prompted to put in your contact information to stay updated on your forms. You should reserve your name 60 days prior to the organization of the business. You must pay $10 to reserve your name.
2. This next step is optional. If you want to operate under a name other than your legal name, you must also file with Oklahoma Secretary of State. For example, the legal name of Starbucks is actually “Starbucks Coffee, Inc.,” but its trade name is “Starbucks.” For sole proprietorships or partnerships, you must file the Domestic Partnership Fictitious Name form. For all other business structures, you must file the Domestic Trade Name form. 
3. To officially register your business, go to the Oklahoma Secretary of State Entity Filing webpage, and choose the document that corresponds to your business structure. Upon successfully filing these forms, you will be mailed your certificates, which you will submit along with your license application. To register with the Oklahoma Tax Commission, fill out their Business Registration Application.
4. The next step is obtain your Federal Employer Identification Number (FEIN) from the IRS. You need this number to start a new business and hire employees. This step is optional for auto dealers who choose to go the sole proprietorship route.
5. If you choose to hire employees for your business, there are a few more steps you must take before finishing your registration. First, you must create a withholding account for income tax purposes. Withholding tax is an amount of an employee’s wage that the employer withholds to pay to the state directly. Second, you need to set up payroll for your employees. We recommend using an HR software platform like Gusto that takes care of everything for you. 

Step 3: Obtain an auto dealer bond (used auto dealers only)

Oklahoma requires only used auto dealers to obtain a $25,000 auto dealer bond and used motor vehicle auctioneers to obtain a $50,000 auto dealer bond. 

The Oklahoma Auto Dealer Bond is a requirement to ensure that auto dealers fulfill their legal obligations to the state and their professional duties to their clients, providing financial protection for customers. For example, if a dealer were to sell a car without a valid title, the consumer can make a claim against the dealer's auto dealer bond. 

Step 4: Purchase garage liability insurance

The next step is to purchase garage liability insurance. A liability insurance policy with a limit of $25,000 is required. 

Garage liability insurance is a specialized form of insurance designed to provide financial protection to businesses that operate in the automotive industry, such as auto repair shops, car dealerships, and service stations. This insurance coverage is tailored to address the unique risks faced by these businesses in their day-to-day operations. It offers protection in situations where the business is held legally liable for bodily injury, property damage, or other third-party claims that occur on their premises or as a result of their operations. Garage liability insurance is essential as it helps cover the costs of legal claims, medical expenses, property repairs, and potential settlements or judgments, ensuring that the business can continue to operate smoothly and safeguard its financial well-being in the face of unexpected accidents or incidents.

For auto dealers, garage liability insurance is a must have and we recommend that you get it through Next Insurance (non-affiliated) as they are one of the best online brokers in the industry. 

Step 5: Complete initial application and prepare all required documents

The next step is to put your application together. The first part of the process is to complete the initial application. The used motor vehicle dealer application and new motor vehicle dealer application request similar information. 

The initial application requires the following details about your business:

1. License type
2. Dealership location information
3. Business type
4. Ownership information
5. Wallet cards: An owner's wallet card is a compact and portable card containing essential business information that a business owner can carry for quick reference and easy access.
6. Criminal background information
7. Date of education program attendance (used motor vehicle dealers only)
8. Applicant personal information
9. Franchise makes (new motor vehicle dealers only)

In addition to filling out the application, you must also submit the following required documents:

• Financial information (company balance sheet or pro forma)
• Manufacturers/distributors’ names and contact information
• Photos of business location
• Franchise (or dealer) agreements
• Gratis card: A free salesperson registration 
• Oklahoma State Bureau of Investigations (OSBI) report (only for applications who have been convicted of a felony)
• Driver’s license of applicants and other owners/partners/officers of business
• Certificate of Insurance
• Bond form (included in application packet)
• Letter or permit from city or county of zoning approval

Step 6: Pay all applicable fees and submit your application

After gathering all your documents, you must also write a check to be mailed with the application.

For new motor vehicle dealers, the application costs $300 and your check should be made to the Oklahoma Motor Vehicle Commission. 

For used motor vehicle dealers, the costs are detailed in the chart below:

       Type of Dealer             Cost             Used Motor Vehicle Dealer             $600                       Franchised Used Motor Vehicle Dealer                     $200                       Used Motor Vehicle Dealer Auction                     $600             Additional Location             $200      

The check or money order should be made to the Used Motor Vehicle and Parts Commission. 

Once all of your documents and checks are ready to be submitted, mail them to one of the following addresses depending on what license you are applying for:

Oklahoma Motor Vehicle Commission

4334 N.W. Expressway, Suite 183

Oklahoma City, OK 73116

Used Motor Vehicle and Parts Commission

421 NW 13th Street, Suite 330

Oklahoma City, OK 73103

Step 7: Complete pre-licensing education (used motor vehicle dealers only)

One owner of your business must attend the Oklahoma motor vehicle dealer education program after you submit your license application. You must attend one class on the Monday before the monthly meeting of the Used Motor Vehicle and Parts Commission. The class is held from 9am to 12:30pm at 421 NW 23th Street, Suite 330, Oklahoma City, OK 73103. 

Step 8 (Final Step): Pass the business site inspection

Once your application has been reviewed by the Commission Board, you will be contacted by a site inspector. You will schedule a time to determine when the inspector can take a look at your dealership. If you pass the inspection, you will receive your dealer license through the mail!

How to Renew your Oklahoma Motor Vehicle Dealer License

All licenses expire on December 31st of each odd number year (i.e. 2023, 2025, etc.). All renewal applications must be submitted on November 1st of the expiration year. A renewal packet will be mailed to your dealership. The renewal fee for new motor vehicle dealers is $200. The renewal fee for used motor vehicle dealers is $300. You will submit your required documents to the same addresses you mailed your license application to.