Dealer Licensing in South Dakota

Thinking of going into business buying or selling cars in South Dakota? Chances are, you’ll need a car dealer license. But don’t fret—we’ll go over everything you need to know to open your own dealership in The Mount Rushmore State.

SD Car Dealer Requirements

GENERALLY, anyone who goes wholly or partly into the business of selling or advertising the sale of new and/or used vehicles needs a South Dakota dealer license.

You DO NOT need a car dealer license if you sell fewer than 5 vehicles in a period of 12 months.

Other Types of Dealer Licenses

South Dakota requires dealer licenses for people who do business with other types of vehicles.

You need a special license if you want to do business with:

  • Mobile homes.
  • Motorcycles.
  • Snowmobiles.
  • Trailers.
  • Boats.
  • Emergency vehicles.
  • Car auctions.
  • Final stage manufacturer.

Many of the requirements for the above licenses are similar to applying for a regular car dealer license, though not exactly the same. Refer to the SD Division of Motor Vehicles’ (DMV) page on dealer licensing for specifics on applying for these other types of credentials.

Apply for a SD Dealer License

To apply for your car dealer license, you’ll need to submit:

  • A completed South Dakota Dealer License Application (Form MV-902).
  • Proof of:
    • A $25,000 surety bond.
    • A $300,000 public liability insurance policy.
  • Verification your principal place of business meets all local zoning ordinances.
  • If you’re applying to be a franchise dealer (i.e. will sell new cars), all applicable franchise agreements.
  • Payment for the $300 dealer license fee.

Submit the application materials and fees to the county treasurer in the county where your dealership will be located. Once your application is processed, a dealer inspector will inspect your place of business to ensure it meets all state requirements for a principal place of business.

If you have questions, call the DMV’s dealer licensing number at (605) 773-4416.

Principal Place of Business

A dealer inspector will visit your dealership to make sure it meets the requirements for a principal place of business, meaning it must have:

  • A permanent, enclosed building, that:
    • Is accessible to the public during reasonable business hours, which must be posted.
    • Meets local zoning ordinances.
    • Can’t be part of a house, apartment building, hotel, motel, or similar UNLESS the entire ground floor is dedicated to the commercial business.
  • Separate office space IF there’s more than 1 business in the structure.
  • A telephone with a phone number in the business’ name.
  • All the books, records, and files related to conducting business kept at the location.
  • An adjoining area large enough to display at least 5 vehicles.
  • A repair shop equipped with adequate tools, parts, and accessories and enough space to work on at least 1 vehicle IF you’ll sell new cars.

Once your dealership passes inspection, you’ll receive your South Dakota dealer license.

Renewing Your SD Dealer License

The paper version of your South Dakota car dealer license is valid for 5 years. HOWEVER, you must renew your credentials annually.

The DMV will mail you a License Renewal Notice and Billing before your license’s expiration date. To renew your license, take the completed notice and $175 dealer license renewal fee to the county treasurer’s office in the county your business is located.

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