Dealer Licensing in North Carolina
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Are you opening an auto dealership in North Carolina? Owning a small business is a huge responsibility, but one that most business owners find immensely rewarding. With cars being a necessary form of transportation, you will be providing a much-needed service to North Carolina residents.
Becoming a licensed car dealer in North Carolina is not unlike opening any other business in the state. For example, when you set up your business, you must file an assumed name with the Register of Deeds if operating under a name other than the owner's name. If your dealership will be a corporation, you must file articles of incorporation with the Secretary of State. Also, you need to obtain the appropriate "trader's licenses" from the state, county, and/or municipality.
However, that is where the similarities end. In order to open and operate a car dealership in North Carolina, there are strict licensing requirements. Licensing is handled by the The North Carolina License and Theft Bureau. Knowing their specific requirements will enable you to get "all your ducks in a row" and make the process smoother. With the correct documents together and the applications filled out properly, applying for your license will be more convenient.
For complete details on the state's regulations and requirements, you should read the Motor Vehicle Dealer and Manufacturer Regulation Manual and the Motor Vehicle Dealer License Minimum Requirements (Form LT-415). These PDF forms require the free Adobe Reader, which you can download for free if you do not already have it.
Here is an overview of the requirements for becoming a licensed car dealer in North Carolina:
Salesroom or office: Have an "established salesroom" (retail dealers) or an "established office" (wholesale dealers) of at least 96 square feet of floor space, in an enclosed building or structure that is not a residence. In other words, you can't use your own driveway or backyard as your showroom, although you may drive a marked "dealer" vehicle home.
Zoning:The location(s) must comply with all state and local zoning regulations.
Description of physical location: You must also furnish the physical address and a working phone number of the business on your application.
Bonding: Surety bonds are required. You will need to secure a $50,000 bond for one salesroom/office (place of business) and a $25,000 bond for each additional salesroom/office (separate place of business).
Sign: Of course, you want customers to know you're an auto dealer! A sign will attract customers and mark your business as a dealership, as well as comply with state regulations.
To identify your business, you must display a sign with your business name. The sign must be in block letters of at least 3 inches high, on a contrasting background. A good example would be as black letters on a white sign.
Insurance: You will also need to have a comprehensive liability insurance policy for your business. When you apply for your dealer license, be sure to bring proof of insurance with you.
Education: Used car dealers must pass a licensing course lasting 12 hours approved by the Bureau for an initial license, or a course lasting 6 hours approved by the Bureau for a renewal license. Courses must have been completed within the past 12 months. There are exceptions to who must take the course, so be sure to read the dealer license requirements carefully.
Inspection: Your office/salesroom must be inspected by a Bureau agent before your business can be licensed. You will receive a record of inspection that must accompany your license application.
Forms: Properly fill out the necessary forms (application, license plate application, surety bond affidavits, etc.―all found at the back of the Motor Vehicle Dealer and Manufacturer Regulation Manual. Also gather any documents that show proof you have taken the above steps. Next, file the forms with the Bureau, and pay any necessary fees. There are separate fees for dealers and sales representatives. You can mail documents to the address on each form.
Filing in person will save time in case you need to make any corrections or if you forget to include a document.
Note that all sales representatives must be licensed by the Bureau. If they change jobs, they must turn in their licenses and apply for new ones.
- Dealer license certificate: $90
- Salesperson certificate: $20
- Dealer registration plate: $36 for the first 5 plates; $18 for each additional plate
- Dealer transporter plates: $18
- Temporary markers: $20 per set of 25 markers
Download the DMV's Motor Vehicle Dealer License Minimum Requirements (Form LT-415) for quick reference.