How to Get a Virginia Dealer License
Launching a car dealership entails following a strict procedure of obtaining a VA dealer license. The process is handled by the state Motor Vehicle Dealer Board, which regulates the activities of dealers.
As a part of the licensing, you have to meet a number of criteria that prove your suitability for running a dealership. Among them is posting a Virginia auto dealer bond, which ensures your legal compliance.
Want to start the licensing and bonding process? Below you can find out the dealer license requirements and more details on how to get bonded.
The VA dealer license requirements
Before you get into the application forms and criteria, you have to set the type of dealership license you’d like to obtain from the Virginia Motor Vehicle Dealer Board, as well as the kinds of vehicles you would like to sell.
The two main licenses you can choose from are VA independent dealer license, which gives you the right to sell used vehicles, and franchise dealer license, which allows you to sell new vehicles straight from the manufacturer or distributor.
As for the types of vehicles that you can sell, you can choose among cars and trucks, motorcycles, recreational vehicles, and trailers.
The next step is to complete the relevant application form, as well as the rest of the required documents from the application packet.
The most important requirements that you will have to meet include:
- Completed dealer plate application
- Proof of zoning compliance of business location
- Appropriate business location that meets all state criteria, including office, business sign, and display space for minimum 10 vehicles
- Proof of successfully passed training and exams for dealer-operators of independent dealerships
- Salesperson qualification test application
- Salesperson license application
- Criminal background check
- Registration of your business entity with the Virginia State Corporation Commission
- Copy of franchise agreement is required for franchised dealers
- $50,000 auto dealer bond provided in the official bond form
The dealer license cost in Virginia is around $600 for a yearly license, consisting of $350 fee for the Motor Vehicle Transaction Recovery Fund. This fee, as well as the surety bond requirement, are needed only for the first three years of licensing, in case you have no claims against you during this period.
Whenever you submit your complete set of documents, the Board will execute an inspection of your business location. Then it can issue your license, if you have met all criteria.
You have to undergo the state dealer license renewal every year, in case you have obtained a one-year license. You need to apply for the renewal before the expiration of your current one, as otherwise you will have to pay higher fees. If you are more than one month late with renewing your license, you will have to apply for a new one.
Learn more about how to get licensed and start your auto dealership in Virginia by downloading our FREE ebook guide!
Obtaining your surety bond
Every auto dealer in Virginia has to obtain a $50,000 auto dealer bond as a part of meeting the licensing rules in the state. By requiring the bond, the Board aims to guarantee that you will comply with the law in your operations as a dealer. More specifically, the bond ensures you will follow the rules set in Title 46.2., Chapter 15 of the Code of Virginia. As noted, if you do not cause any claims to be brought against you for the first three years of your licensing, you won’t need to obtain a bond after that period.
In order to get bonded, you need to pay only a small percentage of the required bond amount. In the typical case, when applicants have stable finances, the premium is in the range of 1% to 3%. The exact surety bond cost that you will end up paying will depend on your personal and business finances, including your credit score and assets and liquidity. The more solid your overall profile is, the lesser the perceived bonding risk will be. Thus, your price will get lower.
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Hello, am located in VA I have a house could I use my house address to get a car dealer license… Do you have to have 10 car parking spaces?
It’s unlikely that you’ll be able to use your home as your dealership location.
For a detailed guide on obtaining an auto dealer license in Virginia, including location requirements, check out our free ebook.
In general, your dealership location must meet the requirements of § 46.2-1510, which include:
– The location cannot be a residence.
– It must have space to display at least 10 vehicles.
– A certificate of zoning (Form MVDB-19) is required from the local zoning office and must be issued within 30 days of your initial application.
– The location must include at least 250 square feet of permanently enclosed office space dedicated exclusively to the dealership.
For the most up-to-date information, you can also contact the Virginia MVDB.