Looking to become licensed as an Arizona motor vehicle dealer? Single Source Insurance has put together this quick guide on licensing and bonding for dealer applicants. Learn more below, and apply online to get the dealer bond you need.
Types Of Motor Vehicle Dealers in Arizona
The state of Arizona issues several different types of motor vehicle dealer licenses:
- New MVD—Individual who buys, sells, or otherwise arranges the purchase or sale of new and used motor vehicles
- Used MVD—Individual who buys, sells, or otherwise arranges the purchase or sale of four or more used motor vehicles in a calendar year
- Public consignment auction dealer—Individual who conducts live auctions with a licensed auctioneer and who provides auction services to the public on a consignment contract basis
- Broker—Individual who arranges or assists in the purchase of motor vehicles for a fee, commission, or other compensation, and who is not already licensed as a dealer
- Wholesale auto auction dealer—Individual who provides auction services solely in wholesale transactions with licensed dealers, and who does not personally buy, sell, or own the motor vehicles they auction
- Wholesale MVD—Individual who sells used motor vehicles only to licensed dealers
- Automotive recycler—Individual engaged in the business of purchasing six or more vehicles per calendar year for the purpose of dismantling, selling, or otherwise disposing of the parts
All motor vehicle dealers in the state are licensed through the Motor Vehicle Division of the Department of Transportation and submit their applications using the same form. They all must also post a surety bond in varying amounts.
How Do I Get Licensed?
Before beginning the motor vehicle dealer application process, determine which type of license you’re applying for. Much of the licensing process is the same, but the provisions of each license, surety bond amounts, and other details are different, so it’s important to know the parameters of the license you’re seeking.
The common application requires dealer applicants to first specify the type of license they’re applying for. Some of the other information the application asks for includes the following:
- Business type (sole proprietorship, LLC, corporation, etc.)
- Business name or DBA
- Business address and lease or ownership documents of business location
- Hours and days of operation
- Other business contact information including mailing address, phone number, and principal owner’s email
- Designated contact person and their contact information
- List of all products dealer is authorized to sell
- Fingerprints for applicable persons
Motor vehicle dealers have rules regarding their place of business�they must display a permanently affixed sign that is legible from 300 feet away in daylight. The business’s name on the sign must be worded exactly as it’s listed on the application. Wholesale dealers that work from their homes must have a sign but it does not have to be legible from 300 feet away.
The business location must have enough room to display two or more vehicles and its primary business should be the licensed dealership. Pictures of the location, including the entire lot, signage, office space, address and hours, and building itself must be included in the motor vehicle dealer application.
Motor vehicle dealer applicants must pay the same fees to the DOT�a $15 filing fee and a $22 criminal records check fee per individual should be submitted along with the license. Other fees to be paid by invoice are a $100 license fee, $10 provisional license fee, and a $50 branch office fee if applicable.
The state of Arizona provides a checklist and a how-to guide for motor vehicle dealer applicants. The list above is not exhaustive, so be sure to read both documents thoroughly to ensure you send in all required information.
Do I Need A Surety Bond?
The surety bond is required of motor vehicle dealers in Arizona to ensure they conduct their business according to law. The different types of dealers need different amounts of bond coverage.
$100,000 surety bond
- New MVDs
- Used MVDs
- Public consignment auction dealers
$25,000 surety bond
- Brokers
- Wholesale auto auction dealers
- Wholesale MVDs
Automotive recyclers need a $20,000 surety bond. All dealers submit their bond on the state-provided form, in which they agree to adhere to Arizona Revised Statutes Title 28, Chapter 10. The bond is dealers’ legally-binding promise to customers that dealers are conducting business ethically and in accordance with the law. It also provides customers a way to seek reimbursement if a dealer’s illegal or unethical business practices cause financial damage to customers.
Ready to begin the Arizona motor vehicle dealer licensing process? Get in touch with Single Source Insurance today!