How to Become a Dealer
Detailed steps on how to become a motor vehicle dealer in the Commonwealth of Virginia.
Becoming a Dealer in Virginia
Are you looking to get into the business of selling cars and trucks? How about motorcycles? Maybe you are looking at selling RV’s or trailers?
We want to say thank you for your interest in becoming a motor vehicle dealer in the Commonwealth of Virginia. Below you will find the steps involved in obtaining a motor vehicle dealer license and becoming part of a great community.
Franchise or Independent ?
Be Sure You Have a Qualified Dealer-Operator
- If you are going to be an Independent Dealer :
- You will need a qualified independent Dealer-Operator. Read our section on independent Dealer-Operators. This section will provide you with the steps you need to become a qualified independent Dealer-Operator or to have a qualified Independent Dealer-Operator.
- If you are going to be a Franchise Dealer :
- You will need a qualified franchise Dealer-Operator. Read our section on franchise Dealer-Operators. This section will provide you with the steps you need to become a qualified franchise Dealer-Operator or to have a qualified franchise Dealer-Operator.
Quick Step (Register)
Your Location Must Satisfy All Zoning Regulations
The Board recommends that you make sure your desired dealership location satisfies all local zoning regulations before you sign a lease or purchase the facility.
Your local zoning official must sign and date the MVDB 19 zoning form and be submitted as part of your application.
The zoning authorization must be dated within 30 days of your application submission to the MVDB.
Make sure your location satisfies all requirements of § 46.2-1510
- Have sales, service, and office space devoted exclusively to the dealership of at least 250 square feet in a permanent, enclosed building not used as a residence.
- House all records the dealer is required to maintain by § 46.2-1529, Code of Virginia.
- Equip your office space with a desk, chairs, filing space, a working telephone listed in the name of the dealership, and working utilities including electricity and provisions for space heating, an internet connection and an email address.
- Display business hours and a sign as required by § 46.2-1533 and § 46.2-1534, Code of Virginia, respectively. A dealer must be open a minimum of 20 hours per week. 10 of these hours must be between 9am. – 5pm. Monday through Friday.
- Have contiguous parking space designated for the exclusive use of the dealership adequate to permit the display of at least 10 vehicles.
Acquire a Surety Bond
Secure a $50,000 surety bond and liability insurance that insures each dealer plate issued to your dealership.
Submit Forms to the MVDB
Complete and Submit Required Forms
|Document Name||Description ” (*) Indicates Minimum Required Forms to Apply to be a New Motor Vehicle Dealer “|
|MVDB 2 *||Bond Application (dated within 30 days of submission)|
|MVDB 9 *||Application for Dealer Plates (you are eligible to receive up to 4 times the number salespersons employed) with a copy of your liability insurance showing the number of plates insured is required.|
|MVDB 10 *||License Application for Initial License/Renewal/Change and each license type.|
|MVDB 19 *||Certification of Zoning Compliance: New and Used Car/Truck Dealer (dated within 30 days of submission)|
|MVDB 61 *||Each Salesperson Application and Criminal History Check Data Form|
|A copy of compliant Buyer’s Order, see the Buyers Order Checklist and Processing fee printed on Buyer’s Order (if applicable)|
|SCC Documentation. Make sure the company and dealership name on the surety bond matches the MVDB 10 application name and the State Corporation Commission filing name EXACTLY|
|Court filing documents of any “trading as” or fictitious name|
Franchise dealers must attach a copy of the franchise agreement or original franchise letter, which includes the manufacturer or distributor’s service agreement. The manufacturer or distributor must also be licensed by the DMV.
All forms are available for printing from our website www.mvdb.virginia.gov
|Each Additional License Type Endorsement||$25.00|
|Motor Vehicle Transaction Recovery Fund Paid Annually For the First 3-years of Operation||$350.00|
|First 2 Dealer Plates||$60.00|
|Additional Dealer Plates (each)||$26.00|
|Salesperson’s License (each)||$30.00|
Scheduling of Your Official “Open For Business” Appointment
Scheduled Appointment for Field Representative
- The applicant must secure and maintain a $50,000 surety bond in the name of the dealership. At the time of your application for a dealer’s license, the validity of the surety bond should be within 30 days of issuance from the bonding company. The bond must be maintained for the first 3 full years of dealership operations. (Form MVDB-2)
- A qualified dealer-operator and salesperson is required for each dealership. This individual must be identified as the dealer-operator on the application MVDB 10. The Independent dealer-operator applicant must successfully complete and pass the two day study course, and then pass the dealer-operator’s test at any Department of Motor Vehicles Customer Service Center (DMVCSC) location. Franchise dealer-operators need only take the Franchise Dealer-Operator Exam at the DMVCSC. Use the MVDB-57 Application for Salesperson /Dealer-Operator Test, and check the appropriate exam.
- Remember, all dealer-operator’s must have a salesperson’s license.
- A dealership sign with no less than 6-inch lettering must be visible on the dealership location.
- Processing fee sign (if applicable) 8 ½ X 11, posted within the dealership location where it can be seen by customers. Click HERE for a simple template.
- A posted listing of all salesperson names in the dealership location where it can be seen by customers.
- Business hours sign posted conspicuously on or near the entrance of the dealership.
- The dealership location must be either owned or leased by the applicant.
- The location cannot be a residence.
- The dealership location must have space to accommodate the display of at least 10 vehicles.
- A certificate of zoning (Form MVDB-19) must be obtained from the locality in which the dealership resides. This certificate must be issued within 30 days of your initial application submission to our office.
- The location must have 250 square feet of permanently enclosed office space for exclusive use by the dealership. The office space must include a desk, chairs, filing cabinet(s), a working telephone in the name of the dealership, working utilities (to include electricity), provisions for space heating, an Internet connection, and an email address.
- Prior to opening, the dealership must have a Board-approved buyer’s order printed that shows the dealership name, address, and telephone number. See the Buyers order checklist (MVDB 44).
- Virginia law requires that a dealership must be opened at least 20 hours a week. Ten (10) of those hours must be between the hours of 9:00am and 5:00pm, Monday through Friday.
- Dealership must be open during posted business hours and those hours must be on record with the Board.
- Dealer records must be available for inspection during posted business hours.
- Know and understand Virginia Advertising laws. Advertising laws may be found under Virginia Code § 46.2-1581, Virginia Regulations and advertising guidance documents that may be found on our website HERE.
Dealership Employee Requirements:
Each dealership salesperson must be licensed by the Board, employed by the dealership, and may not be classified as a “1099 independent contractor.”
NOTE: The Dealer-Operator and Salesperson’s Test is administered at your local DMV Customer Service Center for a $50.00 fee paid at the time of testing.
Take Those Extra Steps To Make Life Easier
The Motor Vehicle Dealer Board Recommends
- In order to issue 30-day temporary tags (PoD), you must have an agreement with one of the following vendors. Click HERE to link to the DMV and the PoD vendors directly.
- Visit our website at http://www.mvdb.virginia.gov for additional, pertinant and code section information.
- While on our website, click HERE to sign up for electronic (email) issues of our newsletter DealerTalk and other emailed information notifications.
- Become an On-Line Dealer and perform many of your DMV-related dealer transactions from your office. Visit http://www.dmv.state.va.us/webdoc/pdf/dmv25.pdf for more information.