To sell new or used cars in Ohio, you must get a dealer license from the BMV. Review the following to find out how to get your dealer license.
Pick Your Ohio Dealer License Class
The Bureau of Motor Vehicles issues two motor vehicle dealer licenses depending on the type of cars you want to sell:
- New motor vehicle dealer license – For selling new cars, camping trailers, motorcycles, all-purpose vehicles, and off-highway motorcycles
- Used motor vehicle dealer license – For selling used cars, motorcycles, all-purpose cars, and off-highway motorcycles
How Many Cars Can I Sell Per Year in Ohio?
You must be a licensed dealer in the state of Ohio if you want to sell more than five cars in a year for profit. However, you don’t need the license if you sell up to five personal cars registered under your name within a year.
Register Your Business
Before applying for your Ohio motor vehicle dealer license, you must register your business name with the relevant offices. The simplest way to become registered is via the Ohio Business gateway. To get started, you only have to register to the system.
This gateway gives you a detailed breakdown of everything you need to cover for the registration process. Part of the process of registering your business through the gateway is registering with the Ohio Department of Taxation.
In addition to the business registration, you must register with the Internal Revenue Service (IRS) to get your Federal Employer Identification Number (FEIN). Finally, you must register with the County Auditor’s Office to get your Vendor number.
Find a Suitable Location for Your Dealership
Both new and used motor vehicle dealers must have a suitable business location that meets the following requirements:
- Must comply with all local zoning requirements
- Have a display lot measuring at least 3,500 square feet
- Have a permanent office measuring at least 180 square feet
- Permanent office must have a filing cabinet, a desk, and three chairs
- Must be easily accessible from the nearest roadway
- Must be easily recognizable as a car dealership
- Must have a permanent sign with letters at least 6 inches high for clear visibility
- Display lot must not allow dust, mud, weeds, and water accumulation
- Must have a working cellular telephone or landline
- Must have a clear display of business working hours close to the office’s entrance
- New car dealers must have a roofed space for displaying at least one car
- New car dealers must have a roofed area for servicing and repairing at least one car
You must display your phone number in public view under your business name. If you are selling used cars, there are additional location requirements you must meet available on the BMV’s website.
How Do I Get a Dealer’s License Without a Display Lot?
While it’s essential to have a lot to become a licensed dealer in Ohio, you can get your license without a lot. The process to apply for one is almost similar to the Ohio dealer license application, involving the following steps:
- Get your application checklist
- Complete the automotive training program
- Obtain a surety bond
- Register your business
- Apply for your sales tax number
- Obtain a Federal Tax Identification Number from the Internal Revenue Service
- Apply for liability insurance
- Compile the necessary paperwork
- Submit your application and the required fees
Complete a Dealer Training Course
This step is only necessary if you apply for a dealership license to sell used cars. If you have not had an Ohio motor vehicle dealership license for the past two years, you must take a six-hour dealer training course at least six months before submitting your Ohio dealer license application.
You can take the class online or in a classroom, after which you will get a completion certificate.
Pass a Criminal Background Check
Whether you want to sell new or old motor vehicles, you must pass a criminal background check that involves electronic fingerprinting. This applies to all applicants who have not held a dealership license in Ohio in the last year.
Electronic fingerprinting also applies to other owners with over 10% shares in the dealership. The Ohio Attorney General’s Office has a list of all fingerprinting centers in Ohio that you can access here.
After your fingerprints are taken, indicate that you want the office to send the fingerprinting result to the BMV Dealer Licensing.
Cover the Minimum Net Worth Requirement
The state of Ohio requires a minimum net worth of $75,000 whether you want to sell new or old cars. Add all your assets and subtract the liabilities to determine your net worth.
You must provide the necessary documentation upon request by the Ohio BMV, which includes a financial disclosure statement.
Get an Ohio Auto Dealer Bond
You must get a $25,000 auto dealer bond to sell used cars. This surety bond ensures that you comply with the Ohio Administrative Code, and its funds are used to protect retail buyers from malicious dealings.
The cost of the bond depends on your credit score. If you have a good credit score, the price ranges between $200 and $250 annually; however, the lower your credit score, the higher the bond cost.
Assemble Your Ohio Dealer License Application Packet
This is among the final and most crucial steps of the auto dealership license application process. First, you must fill out an application form depending on the cars you want to sell. New car dealers must fill out BMV form 4322 while used car dealers must complete BMV form 4320.
In addition to that, you must attach the following documents:
- A copy of the business entry registration certificate from the Ohio Secretary of State
- A copy of your tax registration from the Ohio Department of Taxation
- An EIN copy
- Vendor number
- Criminal history records
- Local zoning compliance documents
- A statement of distributor or manufacturer franchise for each make if you are selling new cars (form BMV 4319)
- Photographs of your business location, inside and out
- Completion certificate for the dealer training course if you want to sell used cars
- A surety bond for used car dealers
- Business formation documents and entity information
- Information about partners, owners, and principal officers
- Form BMV 4347 if you are sharing your business premises with another dealer
- Salesperson applications where necessary
Submit the Application and Pay Fees
After assembling your application form and necessary documents, the next step is to submit them and pay any attached fees. The address to send the application to is:
Ohio Bureau of Motor Vehicles
Attention: Dealer Licensing Section
P.O. Box 16521
Columbus, Ohio 43216-6521
You can also hand-deliver your application to:
Ohio Department of Public Safety
1970 West Broad Street
Columbus, Ohio 43223-1101
How Much Does It Cost to Get a Dealership License in Ohio?
The fees you have to pay when submitting your application are:
- Permit – $50
- Title Defect Rescission Fund – $150
- Postage – $4.50
- Master plate – $50.25
- Additional plates (optional) – $10.25
After receiving the permit, the BMV has to review it, and if approved, you will receive your license within four to six weeks after submission.
Pass an Inspection
Your business premises must pass a physical inspection before or after receiving your license. Your license may be suspended or revoked if your location does not meet the established place of business requirements according to the Ohio Administrative Code and the Ohio Revised Code.
During the inspection, they look at the lot’s condition, the amenities on the premises, lighting and heating, business hours and phone number display, and whether the permanent office has desks, chairs, and storage cabinets.
Ohio Dealership License Renewal
Dealership licenses in the state of Ohio run for a year, after which you have to renew them to continue with your business. You can do that online via the Ohio Department of Public Safety Identity Manager Platform.
To get more information about the license expiry and renewal process, contact the BMV at (614) 752-7636.
To sell more than five cars for profit within a year in Ohio, you must obtain an auto dealership license from the BMV. The process can be long and tiresome, but following the above steps will make it easy and guarantee the proper application. First, determine the cars you want to sell, gather all the necessary documents, learn about the associated fees, have a suitable business location, pass a criminal background check, obtain a surety bond, and meet all the BMV requirements. You can access the BMV site to get detailed steps and clarify all the requirements for more information.