To act as a dealer of new or used vehicles in the state of Hawaii, you need to apply for a license. The Motor Vehicle Industry Licensing Board is responsible for issuing and regulating the Hawaii dealer license.
To get licensed, you need to register your business as well as cover various licensing requirements. These include securing an appropriate location for your dealership, getting a Hawaii auto dealer bond, submitting a financial statement, and more.
Do you want to get a Hawaii car dealer license? Follow our detailed guide below!
1. Choose Your Hawaii Dealer License Type
The Board issues three different types of licenses. These are licenses for dealers of:
- New Vehicles
- Used Vehicles, motorcycles, or scooters over 49cc
Most of the application requirements for the license types are largely the same, with some exceptions. All of these will be detailed below.
Note: New vehicle dealers can also sell used vehicles.
2. Get a Hawaii Business Registration
If your business is a corporation, partnership, LLC, or LLP, you must register with the Business Registration Division (BREG). You can file for a registration online through the Hawaii Business Express portal.
Filing fees for the different types of businesses vary but are not more than $50. Additional fees for a certified copy of your articles of incorporation, and the like, are around $10-$20.
3. Find a Suitable Place for Your Dealership
When you find a location for your dealership, you must make sure it complies with your county’s zoning ordinances. Contact your local planning department to ensure your compliance.
On top of the zoning provisions, you must also comply with the following licensing requirements:
- Create and attach photographs of your dealership to your application form. Photographs must show your:
- Office and restrooms, inside and outside, as well as any hallways or walkways leading to the office or restrooms (if applicable)
- Your showroom or display area which must offer room for at least 3 display stalls
- Complete a self-inspection report which includes a written description of the premises and attach a sketch of the location with measurements of all facilities; Construction plans or architectural documents are not accepted
- Attach a copy of your rental or lease agreement with a minimum term of 1 year, or proof of ownership if the premises belong to you
Note: If you are sharing your premises with another business, you must include photographs that clearly show your stalls as being marked with your business name. You must also submit photographs of a secured office which is not shared, where confidential documents will be held.
4. Prepare a Current Financial Statement
For your Hawaii dealer license application, you need to either prepare or submit a recent financial statement (not older than 1 year). You must use the Motor Vehicle Dealer’s Financial Statement form.
The statement must be prepared by a licensed public accountant or certified public accountant who has a current permit to practice.
5. Secure a Line of Credit or a Hawaii Auto Dealer Surety Bond
All types of dealers must secure a line of credit from a federally insured financial institution, though in varying amounts. If a line of credit cannot be reasonably obtained, then dealers must get a Hawaii auto dealer bond, again in varying amounts.
- Dealers of new vehicles must get a $500,000 flooring or inventory line of credit or in the amount required in their Dealer Sales & Service Agreement – whichever is less
- If applying for a surety bond instead, such dealers must get a $50,000 bond when selling fewer than 10 vehicles per month, or a $200,000 bond if selling 10 or more vehicles per month
- Dealers of used vehicles, motorcycles, or scooters over 49cc require a $50,000 flooring or inventory line of credit
- If applying for a surety bond, used dealers must get a $25,000 bond if they sell less than 60 units per month, or a $100,000 bond if they sell over 60 units per month
- If applying for a surety bond, dealers of motorcycles and scooters must get a $10,000 bond
- Auction dealers must get a secured line of credit in an amount of $100,000
- If applying for a surety bond, they must get a $200,000 bond
Note: Applicants for an auction dealer license must also submit a written statement from a federally insured financial institution. The statement must confirm that they have a customer trust account for the auction with that institution.
6. Complete and Submit Your Hawaii Car Dealer License Application
Once you’ve completed the above requirements, you can fill out your license application form, attach all supporting documents, and submit the packet to the Board.
The documents you need to include are:
- Self-inspection report (description and sketch)
- Photographs of your dealership premises
- Rental or lease agreement, or proof of ownership
- Proof of line of credit or surety bond
- Recent financial statement
- Business registration documents
- Salesperson application (at least one such application must be submitted; not required of sole proprietors and partnerships)
- Proof of customer trust account (auctions only)
- Copy of dealer sales & service agreement with manufacturers or distributors (new vehicle dealers only)
- Proof of license with the Motor Vehicle Repair Board as a “motor vehicle repair dealer” or a certification letter from a repair dealer who is licensed in Hawaii (new vehicle dealers only)
Mail your application form with all supporting documents to the Board at the following address:
Motor Vehicle Industry Licensing Board
DCCA, PVL Licensing Branch
P.O. Box 3469
Honolulu, HI 96801
7. Attach a Licensing Fee to Your Application
You must also attach the appropriate licensing fee in the form of a check, and make it payable to “Commerce and Consumer Affairs”. Hawaii dealer licenses are renewed on a biennial basis on or before June 30 of each even-numbered year, regardless of their issuance date. Your licensing fee will, therefore, depend on when you are applying.
If you apply between July 1 of an even-numbered year and June 30 of an odd-numbered year, you will need to pay fee I below.
If you apply between July 1 of an odd-numbered year and June 30 of an even-numbered year, you will need to pay fee II:
- New vehicle dealer – Honolulu – $1,172 (I), $611 (II)
- New vehicle dealer – Islands – $684 (I), $367 (II)
- Used vehicle dealer – Honolulu – $588 (I), $319 (II)
- Used vehicle dealer – Islands – $393 (I), $221 (II)
- Auction – All counties – $978 (I), $514 (II)
If your application complies with the Hawaii car dealer license requirements, and you have paid the appropriate fee to the Board, you can expect to receive your license within a short amount of time.
If you have any questions about the licensing or renewal process for the Hawaii dealer license, contact the Board directly at [email protected] or (808) 586-3000.