Many amounts in our portion of Chapter 15 of the Code of Virginia are set as statutory maximums and minimums. The law says the Board may charge “not more than” or “not less than” a stated figure (see § 46.2-1519), and the Motor Vehicle Dealer Board (MVDB) sets the actual fee within that ceiling. Other amounts (such as the $100 Fund fee, the $50 reinstatement fee, or the $50,000 bond) are fixed by statute. Always confirm the current, exact fee with the Virginia Motor Vehicle Dealer Board before you pay or apply. This is not legal advice.

Q: Do I need a license to sell motor vehicles in Virginia?

A: Yes. It is unlawful to engage in business as a motor vehicle dealer or salesperson without first obtaining a license. A violation is a Class 1 misdemeanor and may also support an injunction. (§ 46.2-1508)

Q: What counts as an “original” (initial) license?

A: An original license is one issued to an applicant who has never been licensed as a motor vehicle dealer in Virginia, or whose Virginia dealer license has been expired for more than 30 days. (§ 46.2-1500)

Q: What are the basic requirements before I can be licensed?

A: Yes, there are 3:

1.  An established place of business you own or lease with sales/service/office space of at least 250 sq ft, contiguous display space for at least 10 vehicles, a permanent sign, posted hours, working phone/utilities/internet, zoning compliance, and on-site records. (§ 46.2-1510)
2.  A dealer-operator who holds a valid certificate of qualification (application fee of $50, plus passing the Dealer Operator exam). (§ 46.2-1511)
3.  A completed application specifying the vehicle types (cars, trucks, motorcycles, RVs, trailers) and whether new or used. (§ 46.2-1509)

Q: How much is the initial dealer license fee?

A: Not more than $300 for each principal place of business, plus not more than $40 for each temporary or permanent supplemental (additional-location) license. (§ 46.2-1519 A 1)

Q: Are there extra costs unique to a first-time (original) dealer?

A: Yes. In addition to the license fee, original applicants must:

– Pay an annual Motor Vehicle Transaction Recovery Fund (MVTRF) fee of $350 per year for the first three consecutive years (this replaces the ordinary $100 Fund fee during that period.) (§ 46.2-1527.1 C)

and

– File a $50,000 surety bond and maintain it for those three consecutive years. Any lapse in coverage will require you to start over. (D, § 46.2 1527.2)

Q: How long is a dealer license valid, and how do I renew?

A: Licenses are issued for 12 consecutive months and must be renewed annually by application and payment of the required fees. A multiyear license option may be offered. (§ 46.2-1521 A, D)

Q: What is the renewal fee?

A: The renewal license fee is the same statutory ceiling as the original: not more than $300 per principal place of business (plus no less than $40 per temporary or permanent supplemental license). (§ 46.2-1519 A 1)

Q: Do I still owe a Recovery Fund fee at renewal?

A: Generally, yes. A renewing dealer pays an annual Fund fee of $100 (once past the initial 3-year, $350 original period, assuming no claims). (§ 46.2-1527.1 B & D) As an alternative, an eligible renewing dealer with no bond/Fund claims for three consecutive years may elect a continuous $100,000 bond in lieu of Fund participation, which exempts them from Fund fees. (§ 46.2-1527.9, § 46.2-1527.1 H)

Q: What happens if I renew late?

A: If your renewal application and fees are received or postmarked within 30 days after the expiration date, the license is deemed not to have expired, but the license fee is charged at 150% of the normal fee. (§ 46.2-1521 B)

NOTE: Dealers/Salespersons serving in the U.S. armed forces outside the United States get up to 60 days from the end of that service to renew. (§ 46.2-1521 C)

Q: What if I let it lapse more than 30 days?

A: Then it is treated as expired, and a new application would be an “original” license (see Section 1). (§ 46.2-1500)

Q: How much does it cost to reinstate a suspended license?

A: The fee to reinstate a license, certificate, or registration that has been suspended is $50. (§ 46.2-1519 G)

Q: Is “reinstatement” the same as renewing a lapsed license?

A: No. Reinstatement applies to a suspended credential. If a license simply expired more than 30 days ago, it is treated as a new original application, not a reinstatement. (§ 46.2-1519 G; § 46.2-1500)

Q: My license was revoked after a payout from the Recovery Fund. What must I do to be eligible again?

A: If the Board paid a claim from the Fund on your account and you did not reimburse it, your license is revoked. You are not eligible to reapply until you repay the Fund in full, plus 8% annual interest from the date of payment. (§ 46.2-1527.7)

Q: What does a salesperson need to be licensed?

A: A salesperson must hold a valid certificate of qualification issued by the Board, which requires an application  and passing a Salesperson exam before a license is issued. (§ 46.2-1512)

Q: What is the salesperson license fee?

A:  Not less than $50. (§ 46.2-1519 A 2)

Q: Does a salesperson pay into the Recovery Fund?

A: Yes,  an annual Fund fee of $10 per salesperson. However, the total Fund fees a single dealer pays for its salespersons is capped at $100 per year. (§ 46.2-1527.1 B)

Q: Can a salesperson work for more than one dealer?

A: No,  a salesperson may not be employed by more than one dealership unless the dealerships are owned by the same person. Note that a bona fide independent contractor (per the IRS definition) is not a “salesperson” for these purposes. (§ 46.2-1518, § 46.2-1500)

Q: What is a nonprofit organization certificate?

A: Upon application to and approval by the Board, a 501(c)(3) nonprofit that receives donated vehicles as charitable gifts may obtain a certificate authorizing it to consign donated motor vehicles to licensed Virginia dealers. (§ 46.2-1508.1 B)

Q: How much is the nonprofit certificate fee?

A: $25 per year (or any part of a year). (§ 46.2-1519 C)

Q: Does the nonprofit pay Recovery Fund fees?

A: No. Nonprofit organizations issued a certificate under § 46.2-1508.1 B are exempt from the MVTRF fee provisions. (§ 46.2-1527.1 G)

Q: Can the nonprofit tell donors what their donated vehicle is worth?

A: No. A certificated nonprofit may not, orally or in writing, assign a value to a donated vehicle for purposes of establishing a tax deduction on any federal or state return. (§ 46.2-1519 D)

Q: I’m a licensed watercraft dealer who also sells watercraft trailers — what do I need from the MVDB?

A: A watercraft dealer licensed who offers watercraft trailers for sale must obtain a certificate of dealer registration. You are not required to obtain a full motor vehicle dealer license unless you also sell other types of trailers, in which case a dealer license is required. (§ 46.2-1508)

Q: What is a “watercraft trailer” and a “watercraft trailer dealer”? A: A watercraft trailer is any new or used trailer specifically designed to carry a watercraft or motorboat, sold or offered for sale by a watercraft dealer. A watercraft trailer dealer is any such watercraft dealer. (§ 46.2-1500)

Q: What is the fee for a watercraft trailer dealer?

A: Not more than $100. (§ 46.2-1519 A 5)

Q: Is there a Recovery Fund fee?

A: Because a watercraft trailer dealer holds a certificate of dealer registration, the applicable Fund fee is $60 (original or renewal).

NOTE: Trailer dealers (including watercraft trailer dealers) licensed by the Department before July 1, 2015 are exempt from the MVTRF article. (§ 46.2-1527.1 E & I)

Q: Do the dealer-plate insurance rules apply to my watercraft trailers?

A: No. The insurance requirements for dealer’s license plates in Article 5 do not apply to trailers or watercraft trailers. (§ 46.2-1547)

Q: I sell manufactured (HUD) homes — what do I register for?

A: A person licensed as a manufactured home dealer must obtain a certificate of dealer registration as provided in Chapter 15. (§ 46.2-1508)

Q: What is the manufactured home dealer fee?

A: Not more than $100. (§ 46.2-1519 A 4)

Q: Do manufactured home dealers pay into the Recovery Fund?

A: No, the MVTRF provisions do not apply to manufactured home dealers. (§ 46.2-1527.1 G)

Q: I’m licensed as a dealer in another state. Can I sell at Virginia wholesale auctions?

A: Yes, but any person licensed in another state as a motor vehicle dealer must first obtain a certificate of dealer registration before selling vehicles at wholesale auctions in Virginia. (§ 46.2-1508)

Q: What is the fee for an out-of-state (foreign) dealer selling at wholesale auction?

A: $100. (§ 46.2-1519 A 3)

Q: Is there a Recovery Fund fee tied to the certificate of dealer registration?

A: Yes. Applicants for an original Certificate of Dealer Registration or its renewal pay a Fund fee of $60. (§ 46.2-1527.1 E)

Q: Can I just operate on my out-of-state dealer license without registering?

A: No. Operating a motor vehicle in Virginia on a foreign dealer’s license is unlawful unless specifically authorized by the Commissioner (or by reciprocal agreement). (§ 46.2-1556)

Q: What is the MVTRF?

A: The Motor Vehicle Transaction Recovery Fund is a special state fund used to satisfy unpaid court judgments against participating dealers/salespersons for fraud or violations in connection with a vehicle purchase or lease. The Board keeps a minimum working balance (generally $250,000). (§ 46.2-1527.1 A)

Q: What are the Fund fees at a glance?

A: Fund Fees:

Q: What bond is required, and is there an alternative?

A:  Yes, there is an alternative:

– Original license applicants must file a $50,000 bond (maintained for three years). (§ 46.2-1527.2)

– Eligible renewing dealers with no claims for three consecutive years may instead maintain a continuous $100,000 bond in lieu of Fund participation. (§ 46.2-1527.9)

Q: How much can a consumer recover from the Fund?

A: The maximum recovery for one judgment creditor arising from a single transaction is generally $25,000 (including any amount paid from the dealer’s bond); this amount is adjusted annually by the Consumer Price Index for used vehicles. Claims arising from multiple transactions are capped in the aggregate at four times the single-claim amount. (§ 46.2-1527.5)

Q: Who is exempt from the Fund?

A: The Fund provisions do not apply to manufactured home dealers, certificated nonprofits, or to recreational vehicle, trailer, or motorcycle dealers licensed by the Department before July 1, 2015. (§ 46.2-1527.1 G & I)

Q: How does the number of my salespersons affect how many dealer plates I can get?

A: A dealership that sold 50 or more vehicles may apply for dealer’s license plates not to exceed four times the number of licensed salespersons it employs. (§ 46.2-1546)

Q: Who counts as an “employed” salesperson for plate purposes?

A: An employee counts only if he/she works for the dealership at least 25 hours each week on a regular basis and is compensated for that work. An independent contractor (per the IRS definition) does not count. (§ 46.2-1546)

Q: What do dealer’s license plates cost?

A: The fee is set by the Board at not more than $30 per plate, subject to floors:

– The first two dealer’s plates: not less than $24 each.

– Each additional plate: not less than $10.40 each. (§ 46.2-1546)

Q: How do my vehicle sales determine how many dealer plates I’m eligible for?

A: Eligibility is tied to vehicles sold in the last 12 months of the preceding license year (§ 46.2-1546):

A new dealership applicant is likewise eligible for up to 4 × its licensed salespersons.

Q: Are there other plate types with their own fees?

A: Yes, a few common ones (see the statute for full rules):

– Promotional plates: permanent $100/year; temporary $25 for the first plate + $2 each additional — § 46.2-1549.1

– Additional $10 Fee per tag for Special Plates. – § 46.2-1549.2