How to Get a Dealer License in North Dakota: Step-by-Step Guide

To launch a car dealership in North Dakota, obtaining a license from the Department of Transportation (NDDOT), Motor Vehicle Division (MVD) is a necessary first step. The licensing process consists of several important stages, and ensuring each one is completed correctly will help you avoid setbacks and business complications. Our guide is designed to walk you through the application process for a car dealer license in North Dakota, supporting you as you get your dealership ready for operation.

1. Choose Your North Dakota Dealer License Type

The NDDOT issues several North Dakota dealer license types:

Note: New vehicle dealers are automatically licensed to sell used vehicles as well. 

2. Register Your Business in North Dakota

Before you can obtain a North Dakota dealer license, it is necessary to formally establish your dealership as a business entity in the state. This step is critical to ensure your business operates legally and meets state tax and regulatory requirements. The registration process involves several key actions:

Register with the North Dakota Secretary of State:

You must file the appropriate formation documents based on your business structure (LLC, corporation, partnership, or sole proprietorship). This registration establishes your dealership as a recognized legal entity in the state. You register either online or by mail.

Obtain a Tax Permit from the Office of the State Tax Commissioner:

This permit authorizes your business to collect and remit sales tax on vehicle sales and other taxable transactions. It also supports compliance with applicable state tax statutes.

Secure an Employer Identification Number (EIN) from the IRS.:

The EIN is a federal tax ID number required for tax reporting, hiring employees, opening business bank accounts, and other financial activities. Even if you do not have employees, an EIN is often necessary for business banking and tax purposes.

3. Establish a Suitable Business Location

Your dealership must have a permanent physical location that complies with state and local regulations. For new and used car dealer licenses in North Dakota, the main requirements are:

• Zoning approval from local authorities  
• A permanently enclosed building of at least 250 sq. ft., owned, rented, or leased, used as the main office  
• The office must be heated, lighted, and equipped with standard office furniture and a publicly listed telephone number 
• Business records must be maintained at this location  
• A vehicle display lot covering at least 2,500 sq. ft. 
• A business sign at least 32 sq. ft. in size, with letters at least 10 inches high, clearly visible from the street  
• Dealerships must be open to the public during normal business hours. Secondary lots are allowed within 5 miles of the primary location but must be properly signed.

4. Obtain Your North Dakota Auto Dealer Bond and Liability Insurance

All vehicle dealers must post a surety bond as a guarantee of compliance with state laws. Bond amounts vary by dealer type:

To get a North Dakota dealer license, you must also provide garage liability insurance (for new and used vehicle dealers).

Premiums for bonds are typically set at 1.5% to 3% of the bond value, depending on creditworthiness and financial record. 

5. Complete and Submit Your Dealer License Application

Your application packet must include:

• Completed Dealer License Application Form (Form SFN 2932)
• Zoning approval form
• A copy of the lease or proof of ownership for your business address  
• Auto dealer bond certificate
• Garage liability insurance certificate (mandatory for new and used vehicle dealers)  
• Franchise agreement (required for new vehicle dealers)  

North Dakota Dealer License Fees

Note*: One dealer plate is included with the license; additional plates require fees and meet sales criteria.

6. Pass the Dealership Location Inspection

After submitting your application for a North Dakota auto dealer license, an MVD agent will conduct a thorough inspection of your dealership location. Beyond verifying compliance with zoning, signage, and office requirements, the inspection also evaluates:

• Safety and accessibility
• Record-keeping systems
• Signage visibility
• Business operations readiness
• Compliance with environmental regulations

7. Renew Your Dealer License Annually

North Dakota dealer licenses expire on December 31 each year. Renewal is mandatory to continue operating legally and involves:

• Renewal Application: You will receive a renewal notice from the MVD, typically in early November. Submit the renewal form promptly to avoid delays.
• Renewal Fees: The standard renewal fee is $100 for new and used vehicle dealers, which includes one dealer plate registration. Additional plates require a $20 fee per plate.
• Late Renewal Penalties: If you miss the renewal deadline, a $100 late fee applies, which can add significant cost and risk to your business.
• Sales Minimum for Renewal: New and used vehicle dealers must have completed at least 8 retail vehicle sales during the previous calendar year to qualify for renewal. Failure to meet this threshold may result in non-renewal.
• Updated Documentation: You may be required to submit updated proof of insurance, bond renewal certificates, and any changes in business location or ownership.

Electronic Vehicle Title and Registration System

North Dakota has modernized its vehicle title and registration process by implementing an Electronic Title and Registration System (ETRS). For a dealer license in North Dakota, dealers must be registered users of this system to submit title applications and registration documents electronically. This system reduces processing times, minimizes errors, and improves record accuracy. 

Compliance and Dealer License Suspension Grounds

The North Dakota Department of Transportation has clear grounds for denial, suspension, or revocation of a dealer license, including:

• Making material misstatements on the license application
• Willful non-compliance with state laws or MVD rules
• Allowing unlicensed persons to sell vehicles on your behalf
• Ceasing to maintain an established place of business

Violations related to vehicle sales, financing, or record-keeping

Important Updates and Tips

Dealer Plates: Initial issuance allows up to 2 dealer plates for new vehicle dealers. Additional plates require meeting sales thresholds and paying extra fees.

Penalties: Operating without a valid dealer license can result in fines ranging from $100 to $2,000, depending on the number of violations.

Show and Sale Permits: Dealers can obtain a temporary Show and Sale Permit for up to 7 days to display vehicles at events, with a $25 fee. This is ideal for auto shows or sales promotions outside your dealership location.

Electronic Title Processing: North Dakota has implemented electronic vehicle title processing to speed up title transfers and reduce paperwork. Dealers must be familiar with the e-title system and comply with electronic submission requirements.

Online Renewal Option: The MVD now offers an online portal for dealer license renewals, allowing faster processing and immediate confirmation of renewal status. 

Frequently Asked Questions (FAQ)

• Can I sell used vehicles with a new motor vehicle dealer license?

Yes, a new motor vehicle dealer license automatically authorizes you to sell used vehicles in North Dakota, simplifying your operations under one license.

• Are there inspection fees for all dealer types?

No, mobile home and manufactured home dealers are exempt from inspection fees, while other North Dakota dealer license types must pay fees ranging from $50 to $100.