How to Get Your North Carolina Auto Dealer License in 9 Steps

If you plan to sell, exchange, or otherwise deal in vehicles in North Carolina, you must obtain a dealer license from the Division of Motor Vehicles (DMV), part of the North Carolina Department of Transportation (NCDOT). 

This guide outlines the step-by-step process for getting licensed, from choosing your license type to meeting all state requirements.

1. Determine Your License Type

Before applying, identify the license that aligns with your business activities:

• New Vehicle Dealer License – for selling new vehicles
• Used Vehicle Dealer License – for selling used vehicles
• Wholesale Dealer License – for selling used vehicles to other dealers
• Distributor License – for distributing new vehicles to dealers
• Manufacturer License – for vehicle manufacturers working with distributors

2. Attend a Pre-Licensing Course (Used Dealers Only)

Used vehicle dealers must complete a 12-hour pre-licensing course within 12 months before applying. This does not apply to new vehicle dealers or wholesalers.

Course Overview:

• Schedule: 2-day format
  • Day 1: 9:00 AM – 5:00 PM
  • Day 2: 9:00 AM – 1:00 PM
    
• Topics Covered:
  • Recordkeeping and business operations
  • Consumer protection laws and advertising regulations
  • Introduction to industry vendors
    
• Included Materials:
  • Binder and flash drive with required federal and state forms
  • Starter pack with 5 complete sets of sales forms
    
• Added Benefits:
  • Complimentary membership to industry associations
  • Up to one year of consulting services

Important: The attendance requirements for getting a North Carolina auto dealer license are strict. You must be present for the entire course to receive your certificate. For license renewal, used dealers must complete a shorter 6-hour continuing education course.

3. Secure an Approved Business Location

Your dealership must operate from a permanent location that meets state and local regulations.

• Retail dealers need a showroom; wholesalers need an office – both must be at least 96 sq. ft. in a permanent, enclosed building.
• The location must be:
  • Separate from any living space
  • Accessible to DMV staff
  • Approved for auto sales by local zoning authorities

Additional Guidelines

• Post a permanent sign with your trade name in block letters (min. 3 inches) and a contrasting background.
• The physical address on your application must match your business site – no separate mailing addresses allowed.
• A display lot isn’t required, but zoning must permit car sales.
• Choose a location that’s visible and easy to access.
• Search your address online to ensure any prior businesses are marked closed to avoid customer confusion.

Tip: Before signing a lease, contact your area’s DMV officer to pre-approve the space to ensure it meets all requirements.

4. Get Your Business Properly Registered

Depending on your business structure, you need to observe the following rules to get your business registered for a North Carolina auto dealer license:

• For businesses using an assumed name: File your assumed business name with the Register of Deeds in your North Carolina county
• For corporations: File articles of incorporation with the North Carolina Secretary of State and include the first page of your corporate charter with your license application
• For foreign corporations: Obtain a certificate of authority from the North Carolina Secretary of State before being licensed to operate in the state.

5. Obtain a Surety Bond

A surety bond is required for getting a car dealer’s license in NC. The bond amount is $50,000 for your primary location and $25,000 for each additional location. You won’t need to pay the full amount – bond premiums typically range from 1% to 15% of the total, or about $500 to $7,500, depending on your credit and financial history. To complete this step, you’ll need to submit a notarized Form LT-409 with your application.

This bond protects consumers and ensures that you comply with state regulations, as outlined in North Carolina General Statute § 20-288. It functions as a three-party agreement between you (the principal), the surety company, and the NC DMV (the obligee). Some dealers, such as franchised dealers, travel trailer dealers, and utility/semi-trailer dealers, may be exempt from this requirement. 

6. Secure Proper Insurance Coverage

To obtain a North Carolina auto dealer license, you must carry appropriate insurance. This typically includes a Garage Liability Insurance policy or a Garage Coverage Form – Automobile Dealer Supplementary Schedule.

• The policy must cover all dealer plates you plan to use
• You must provide a Certificate of Garage Insurance stating the number of plates covered
• The Certificate Holder must be listed as:
  NC DMV, 4121 New Bern Ave, Raleigh, NC 27610
• Coverage must be active and continuous throughout your licensure period to remain compliant

7. Create and Install Proper Business Signage

Your business location requires:

• A sign with your trade name in block letters at least 3 inches high on a contrasting background
• Many successful dealers opt for larger, more visible signage than the minimum requirement

8. Schedule an Inspection

Before your North Carolina dealer license can be issued, your business location must be inspected and approved by an agent from the License and Theft Bureau. This inspection ensures your location meets all requirements for size, signage, and zoning.

How to Prepare

• Schedule your inspection by contacting the North Carolina License and Theft Bureau
• Ensure your location is ready and compliant with all physical requirements

Documents to Have Ready

These are typically required at the time of inspection or as part of your application packet:

• LT-400 (Dealer License Application) – Must be notarized
• LT-409 (Bond) – Must be notarized
• LT-426 (Sales Rep Application) – Must be notarized
• 12-hour pre-licensing course certificate
• Zoning approval letter
• Garage liability insurance certificate or declaration page
• If Corporation/LLC, copies of meeting minutes and the Secretary of State filing
• If Franchise, copy of franchise agreement(s)
• Required fees (see fee breakdown below)

9. Submit your application

Once all requirements are met and documents are prepared, submit your application packet to:

North Carolina Department of Transportation
Division of Motor Vehicles
License and Theft Bureau Dealer Unit
3129 Mail Service Center
Raleigh, NC 27699-3129

Important: The DMV will not process applications that are incomplete or illegible. Ensure all forms are fully completed, properly signed, and notarized where required. Include all necessary supporting documents in your submission.

North Carolina Dealer License Fees & Regional Requirements

To get licensed as a motor vehicle dealer in North Carolina, you’ll need to pay the required state fees, meet regional compliance, and cover several additional costs.

State Licensing Fees

Regional Requirements

While most North Carolina auto dealer license requirements are consistent throughout the state, be aware of these regional considerations:

County-Specific Fees

Some counties have additional Regional Transit Authority fees that must be paid when applying for or renewing your dealer license. These include:

• Wake County: $5 additional fee
• Randolph County: $1 additional fee
• Orange/Durham County: $15 additional fee

Zoning Rules

• Urban areas (Charlotte, Raleigh, Durham) may have stricter zoning laws.
• Rural counties may be more flexible, but still require proper zoning.

Check with your local zoning board before selecting a location.

County Filing Differences

• Assumed name filings are handled by the Register of Deeds in your county.
• Some counties offer online filing; others require in-person submission.
• Fees and timelines vary—contact your county office for details.

Additional Costs

• Surety Bond: $50,000 required ($500 – $7,500 premium based on credit)
• Pre-Licensing Course: ~$325 (required for used vehicle dealers)
• Business Registration: Varies by business type and county
• Garage Liability Insurance: Cost varies by provider and coverage
• Zoning & Signage: Must meet local commercial property requirements

Renew Your License Annually

North Carolina Dealer Licenses are valid for one year and must be renewed annually. Make sure to begin the renewal process well before your license expires to avoid any disruption to your business.

• The DMV typically sends a renewal notice about 60 days before expiration. 
• Used vehicle dealers must complete a 6-hour continuing education course (separate from the initial 12-hour course). 
• Be sure to update your contact information, zoning approval, and insurance documents, and submit your renewal before the expiration date to avoid any lapse in licensure. 
• The DMV will verify that your dealership remains compliant with all current requirements during the renewal process.

Important Updates for 2025

New Dealer License Grace Period Extension

The North Carolina General Assembly has introduced Senate Bill 401, which extends the dealer license renewal grace period from 30 to 60 days after expiration when a timely renewal application has been submitted. This change becomes effective October 1, 2025.

Dealer Plate Changes

The same bill also aligns dealer registration plate renewals with dealer license renewals, changing the dealer plates from a one-year to a two-year validity period. Additionally, the mandatory replacement period for dealer plates will be extended from three years to four years.

Frequently Asked Questions

How long is a North Carolina dealer license valid?

A North Carolina dealer license is valid for one year from the date of issuance and must be renewed annually. However, proposed legislation for 2025 would provide a 60-day grace period for timely renewal applications.

Can I operate from my home, or do I need a commercial location?

You cannot operate from your home. North Carolina requires all dealers to have a separate business location with at least 96 square feet of floor space in a permanent, enclosed building with a separate entrance from any living quarters.

What happens if I don’t renew my dealer license on time?

If you don’t renew your license by the expiration date, you have a grace period to submit your renewal (currently 30 days, being extended to 60 days in October 2025). Beyond this period, your license will expire, and you cannot legally operate your dealership until it’s reinstated.

How many vehicles can I sell without a dealer license in North Carolina?

If you plan to sell more than five vehicles in a 12-month period, you must obtain a dealer license. Selling more than five vehicles without a license is illegal in North Carolina.

Why is a surety bond required for auto dealers?

The North Carolina Auto Dealer Bond protects consumers from financial losses due to fraudulent or unethical practices. It provides financial recourse for consumers who have been harmed by illegal actions such as misrepresentation of a vehicle’s condition, failure to deliver titles, or fraudulent sales practices.

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