How to Get a North Carolina Auto Dealer License

Starting an auto dealership in North Carolina can be a lucrative business opportunity, but before you can legally buy and sell vehicles, you need to obtain a North Carolina auto dealer license. You are required to obtain a license if, within 12 months, you buy, sell, display, or exchange five or more vehicles in your name. This license ensures that all dealers meet state regulations, maintain ethical business practices, and provide consumer protection. Dealer licensing is handled by the License and Theft Bureau of the North Carolina Division of Motor Vehicles. In this guide, we’ll walk you through each step of obtaining your North Carolina auto dealer license.

1. Identify The License Type You Need

Before applying, choose the right license based on your business model. The North Carolina Division of Motor Vehicles (NCDMV) offers different licenses for those looking to operate as an auto dealer in the state, you’ll need to apply for one of the following licenses:

• New Motor Vehicle Dealer License: Allows you to sell both new and used vehicles.
• Used Motor Vehicle Dealer: Allows you to sell used vehicles.
• Distributor License: Allows you to distribute/sell new vehicles to new car dealers.
• Wholesaler License: Allows you to distribute/sell used vehicles to car dealerships.
• Manufacturer License: Required for those that assemble/manufacture vehicles or import new motor vehicles through a distributor with the intent to further distribute.

2. Complete a Pre-Licensing Course

If you’re planning to sell used cars in North Carolina, you must complete a dealer education course. New applicants need a 12-hour course, while renewals require a 6-hour course.

Some exemptions apply, including:

• Dealers who meet the educational requirements under N.C.G.S. § 143-143.11B.
• Individuals 62 years or older as of July 1, 2002, who are renewing their license.

For more details, refer to N.C.G.S. § 20-288(a1)(2). The pre-licensing course is available at various locations, including Davidson-Davie Community College.

3. Establish Your Business Location

There are a number of business location requirements that you’ll need to meet before you can apply for your license. These include:

• Retail dealers are required to maintain a standalone, enclosed salesroom of at least 96 square feet, with a dedicated entrance, separate from living spaces and other businesses.
• Wholesale dealers do not need a traditional car lot, but must have an “established office” containing at least 96 square feet of floor space in a permanent, enclosed building or structure which is accessible to Division personnel and is a place to keep books, records and files. Wholesale applicants must also provide the Division with a telephone number where they can be contacted regarding records and sales transactions. 
• Dealers must display a sign at their business premises with  block letters no less than three inches high and on a contrasting background. The sign must clearly and distinctly show the trade name of the business.
• Accurate business location details must be provided in the license application, including street name, street number, city, state, and zip code. If using a post office box or rural route number, the full physical address must also be included. A mailing address that differs from the actual business location is not permitted.

4. Acquire Liability Insurance

Obtaining comprehensive liability insurance that includes coverage for your dealer plates is mandatory. This policy must be either a Liability Insurance Company Policy or a Garage Coverage Form - Automobile Dealer Supplementary Schedule to meet licensing requirements.

When submitting your application, you must:

• Include your policy number on the application.
• Provide a Certificate of Garage Insurance that specifies how many dealer plates are covered by the policy.
• List the Certificate Holder as NCDMV, 4121 New Bern Ave., Raleigh, NC 27610.

5. Secure an Auto Dealer Surety Bond

Everyone applying for a car dealer license in North Carolina is required to post a North Carolina Auto Dealer Bond.

The required bond amount is $50,000 for your first location and $25,000 for each additional location (if applicable).

To get bonded, however, you only need to pay a fraction of this amount. To determine your exact bond cost, (known as your bond premium) we'll look at a number of factors including your:

• Personal credit score
• Business statements
• Financial statements
• Fixed and liquid assets

Recently, we assisted a client who needed a surety bond to complete their North Carolina auto dealer license application. We guided them through the process, explaining the bond's role in ensuring ethical business practices and compliance with state regulations. Their appreciation for our clear and supportive approach made the experience particularly rewarding for us.

6. Compile All Documents

The following forms are required in order to process your application: 

• LT-400 (Notarized); 
• LT-409 (Notarized); 
• LT-426 (Notarized);
• 12 hour continuing education certificate dated within the past 12 months;
• Zoning approval letter; 
• Garage liability insurance certificate or declaration page;  
• If corporation/LLC, copies of your meeting minutes and Secretary of State filing; 
• If franchise, copy of franchise agreement(s); 
• If out of state manufacturer or distributor, certificate of authority;
• Out of state manufacturers must also provide proof of registration with the National Highway Traffic Safety Administration (NHTSA) 

For a complete list of requirements, check Minimum Dealer License Requirements

7. Arrange a Business Site Inspection

Before submitting your application, it's mandatory for all dealerships to undergo an inspection and receive approval from an agent of the License and Theft Bureau. To arrange this inspection, contact the License and Theft Bureau office in your local town or county. The inspector will assess your premises to verify compliance with all necessary safety and security standards.

8. Submit Car Dealer License Application

Once you’ve completed all forms and gathered the necessary documents, include the required fees with your application:

• Dealer/Wholesale/Distributor License Certificate: $115.50
• Factory Branch License Certificate: $167.25
• Manufacture License Certificate: $250.50
• Sales/Factory Representative: $25.50
• Dealer Plate (first five plates): $46.25 each plate
• Each Additional: $23.25 each plate
• Dealer Transporter Plate:  $23.25 each plate
• Temporary Markers: $25.00 per set of 25

Additional fees apply for plates issued in counties with a Regional Transit Authority (RTA) tax: $1.00 in Randolph County and $15.00 in Wake, Orange, and Durham Counties.

Send your completed application to:

N.C. Division of Motor Vehicles
Vehicle Services - Dealer Unit
3129 Mail Service Center
Raleigh, NC 27697-3129

FAQs on North Carolina Auto Dealer License

How Long Does It Take to Get a Dealer License in North Carolina?

The time to obtain a North Carolina dealer license varies, but the process typically takes 4 to 6 weeks from start to finish. The timeline depends on how quickly you complete the requirements and how long it takes for the NC DMV License and Theft Bureau to process your application.

When Do You Need to Renew Your License?

In North Carolina, dealer licenses must be renewed annually by June 30. The renewal process typically begins a few months before the deadline,and dealers must submit all required documents on time to avoid penalties or suspension. Renewal requirements include:

• Completed renewal application
• Renewal fee
• Updated surety bond ($50,000 bond for retail and wholesale dealers)
• Proof of continued insurance coverage
• Ongoing compliance with business location and record-keeping requirements