South Carolina auto dealers and wholesalers need to be licensed and get a $30,000 surety bond to do business. Keep reading to find out how to get licensed and bonded.
Licensing for South Carolina auto dealers
South Carolina auto dealers need a license if they sell or attempt to sell more five or more vehicles in a year. Vehicle wholesalers can only sell vehicles to dealers or other wholesalers, and they also need a license to sell more than five vehicle per year. Dealers and wholesalers are licensed by the South Carolina Department of Motor Vehicles (SCDMV) and need a license for each business location. Some of the information the Department needs from auto dealer applicants includes:
- Completed application
- Affidavit of Eligibility
- SLED criminal history reports for each owner with 10% or more stake in the business from the past 90 days
- $30,000 surety bond
- Diagram of entire business location, including office and display areas
- Copy of retail license from the Department of Revenue
Wholesale applicants do not need a retail license since they do not sell vehicles at retail.�This list isn’t exhaustive, so read the application and checklist carefully. Licenses cost $50, but the fee does not have to be submitted with the application. Mail completed applications to:
SCDMV
Dealer Licensing and Audit Unit
P.O. Box 1498
Blythewood, SC 29016-0023
If you apply for a dealer demonstration plate, you also need to submit proof of garage liability insurance. If any information that was submitted on your application changes, you need to notify the SCDMV and may need to submit a new application. South Carolina auto dealers’ licenses need to be renewed each year.
Motor vehicle wholesale auctions, motorcycle dealers and wholesalers, and travel trailer dealers use the same form to apply for licensure and submit much of the same information as auto dealer applicants. They also need to get a surety bond but with only $15,000 of coverage rather than $30,000.
Auto dealer and wholesaler surety bond
Auto dealers in most states need to get a surety bond to mitigate risk and protect consumers. The $30,000 requirement for South Carolina auto dealers and wholesalers provides that amount of coverage for their customers, should a customer suffer financial damage because of the licensee. If the consumer files a claim that is proven to be valid, the surety pays the claim on behalf of the auto dealer. The dealer must then reimburse the surety company.
Some dealers and wholesalers only need a $15,000 surety bond, but all applicants use the same bond form and are agreeing to the same terms. Those terms mainly entail following the South Carolina Code of Laws, Title 56.