Licensing Requirements

So, you're interested in becoming a vehicle dealer? Well, not just anyone can start their own dealership. We'll walk you through the application process, and take a look at what's expected of you.

Becoming a Dealer

If you want to sell (or even advertise to sell) new or used vehicles, including boats, you'll need to have a dealer license.

However, as is often the case, there are some exceptions to the rule, such as individuals selling vehicles or boats as personal transactions, not as a business.

For those who are looking to gain dealer status, the first step is to complete a dealer application.

All dealer applicants must also have a corporate bond in the following amounts:

• New and used vehicle, mobile homes―$25,000

• Boats―$20,000

• Trailers (2,000 pounds and over)―$10,000

• Motorcycles, snowmobiles―$5,000

The bond must be issued by a corporate surety company, approved to do business in South Dakota.

In addition, dealers (except for trailer, mobile home, snowmobile, and boat dealers) must also have at least $300,000 of public liability insurance.

Send the application, a copy of your insurance policy, the original bond, plus the application fee to:

• Division of Motor Vehicles

• 445 East Capitol Ave.

• Pierre, SD 57501

It normally takes a couple of weeks to process and review the application.

You are not allowed to start selling vehicles until your application has been approved. Also, it's a good idea to check with the Division of Motor Vehicles before filing your application just to make sure that the proposed name for your business hasn't already been taken.

If you are granted a dealer license, it will be valid for five years, unless the Division of Motor Vehicles decides to cancel or revoke it.

Application Fees

You knew there had to be application fees, right? Here's the breakdown:

• New or used vehicle dealer―$250

• Mobile home dealer―$250

• Motorcycle dealer―$200

• Boat dealer―$200

• Trailer dealer―$75

Dealership Requirements

There's a long list of physical requirements for starting a dealership. The following applies for new and used vehicle, boat, motorcycle, and trailer dealerships. (Snowmobile dealers do not have these regulations.)

Your principal place of business must:

• Be enclosed

• Be a permanent facility

• Be located in South Dakota

• Be easily accessible to the public

• Be open on a continuing basis

• Have reasonable hours of operation

• Have those hours listed in a spot that is clearly visible to your customers

• Have an adjoining building that's capable of housing at least five of the vehicles you're attempting to sell

• Comply with all applicable building and zoning codes, as well as land use regulations

• House all records, files, and books that are considered necessary to run your business

• Not be an apartment, hotel or motel room, or part of a single- or multiple-family unit, unless all of the ground floor of the building is for commercial purposes

• Have a different office space for running your business, if there is another business located within your building

• Have a telephone

• Have a telephone number listed in the name of your business

Before you may become a dealer, an inspector will need to visit your site and verify that you have met all of these regulations.

If you already have a dealership, you will need permission from the Department of Revenue and Regulation before you may move it to a different location.

Additional Information

Need more help? Try the following:

• Dealer Licensing Office

• 445 East Capitol Ave.

• Pierre, SD 57501

• Phone: (605) 773-4416

• Fax: (605) 773-2549

• E-mail: motorv@state.sd.us

Dealer Inspectors

• Dale Hilgemann

• 419 Mocassasin Drive

• Aberdeen, SD 57401-5085

• Phone: (605) 626-2218

• Fax: (605) 626-2946

• Monica Weischedel

• 445 East Capitol Ave.

• Pierre, SD 57501-3085

• Phone: (605) 773-3541

• Fax: (605) 773-2550

• Pilo Pena

• 4447 South Canyon Blvd., Suite 6

• Rapid City, SD 57702-1869

• Phone: (605) 394-2332

• Fax: (605) 394-6076

• Ron Rysavy

• 230 South Phillips Ave., Suite 301

• Sioux Falls, SD 57104-6321

• Phone: (605) 367-5800

• Fax: (605) 367-5830