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In Arizona, all individuals or corporations engaged in the sale of vehicles must obtain a dealer license. This requirement ensures consumers’ protection, fair business practices, and control that car dealerships comply with federal and local regulations. The agencies related to the licensing process in Arizona are the Arizona Department of Transportation (ADOT) and the Arizona Department of Financial Institutions (AZFI).
In this article, you will find a comprehensive guide about how to get your car dealership license and comply with all the requirements to get your Arizona car dealer license successfully.
The first thing you should know before issuing your dealer license in Arizona is that the Arizona Department of Transportation (ADOT) issues nine types of licenses. Below, you will find a list so that you can determine which one suits your business
Before applying for the license, you must either purchase or lease a property for your business. If you choose to lease, the lease contract must be for a minimum of six months. The location must be an enclosed structure with enough room for at least two vehicles and should be exclusively dedicated to your business or dealership. Besides, the building must comply with local zoning regulations.
Additionally, the place must have post signs showing the business’ name permanently erected on the ground or permanently affixed to the building that can be read from 300 feet during daylight hours. Besides, the signs must specify whether the business is a dealership or a vehicle recycler
Lastly, the building must have a sign showing the business hours, which must match the business hours submitted on the dealer application.
When completing the license application, you will be asked for pictures of the business location proving that the building meets the requirements.
Note for Wholesale Dealers: Wholesale dealers may operate at a residence if allowed by the zoning regulations. Besides, wholesale dealers must have an Arizona Driver’s License or ID.
Before applying for a dealer license, you must register your business with the State of Arizona.
Sole owners or partners owing 20% or more of the business must demonstrate a clean record, free from convictions related to fraud or auto-related felonies within the last 10 years or any other type of felony within the last 5 years. This requirement is in place to ensure high ethical standards within partnerships and owners and to protect consumers from fraud.
To meet this requirement, the Arizona Motor Vehicle Department mandates the submission of an Authorization to Release Information, a Statement of Personal History form, and fingerprint cards. The background check costs $22 per person. For more information or details, check the Arizona Applicant Processing Services website.
All dealers operating in Arizona must have an auto dealer surety bond. Before starting your license application process, you must obtain a surety bond from a reputable insurance or surety company. The Arizona auto dealer bond amount varies depending on the license type, as shown below:
The bond’s premium, which depends on your credit score and financial standings, ranges from 0.75 to 5 percent of the covered amount.
When everything is ready, you can file your dealer application online on the AZ MVD Now website. Remember to double-check the required documentation and have it at hand when applying. Before applying, you will be prompted to pay the application fees:
This is not intended as legal advice. If you have questions about dealer licensing requirements, please seek the assistance of legal counsel.
When you get your license, sign up with ACV Auctions. We are an online car auction with a wide range of used car inventory to stock your dealership. ACV has vehicle inspectors nationwide who inspect wholesale, off-lease, and retail inventory directly on the lot. You can bid with confidence knowing that our inspectors have conducted a thorough vehicle inspection.
