Auto dealers that sell more than five vehicles a year must get a dealer license to operate in Wisconsin. In order to get your license, you must meet the requirements established by the Wisconsin Department of Transportation.
In this guide, we will go through all the steps you need to take to get your Wisconsin dealer license.
Step 1: Determine license type
The first step to becoming a licensed auto dealer in Wisconsin is to figure out what type of license you need. The DOT offers various different license classifications. Each determines what type of dealership you can operate.
Here are the different license types:
- Retail dealer license: This license lets dealers sell or lease new or used motor vehicles to the public.
- Wholesale dealer license: This license lets dealers sell motor vehicles to licensed dealers but not the public.
- Manufacturer/distributor license: This license lets dealers manufacture and distribute vehicles to other licensed dealers.
- Motorcycle dealer license: This license lets dealers sell motorcycles.
- Buyer’s license: This license lets dealers bid on and purchase vehicles at auctions.
- Salesperson license: This license lets the holder sell motor vehicles to the public on behalf of a retail dealer.
- Recreational vehicle dealer: This license lets dealers sell recreational vehicles (RVs) to the public.
- Salvage dealer: This license lets dealers buy and sell vehicles to scrap or dismantle.
Keep in mind that businesses must have at least one licensed salesperson. This means that someone will need to get a salesperson license no matter what type of license you need (retail, wholesale, etc.).
Step 2: Get your business location
The next step is to secure your permanent place of business. This business location will need to meet several requirements set by DOT:
- Must have a 12×20 foot indoor area to display vehicles
- Must meet local zoning ordinances
- Must have an exterior business sign that lists hours of operation
- Must have an outdoor display lot
- Must have a service department or partnership with a licensed service shop
Step 3: Register your business
All auto dealers must get a sales tax permit from the Wisconsin Department of Revenue. If your business is a limited liability company (LLC), limited liability partnership (LLP), or corporation, your business also needs to register with the Wisconsin Department of Financial Institutions (DFI).
You can register online or by mailing in an application. There is a $20 fee to issue your first tax permit.
Step 4: Get a surety bond
Auto dealers in Wisconsin are required to post a surety bond prior to receiving their license. The bond gives financial protection to the state and the dealer’s customers if they are damaged by the dealer’s negligent actions.
The required bond amount for Wisconsin motor vehicle dealer bonds is $50,000. You only need to pay a small percentage of this amount (typically 1% to 3%) as a premium. The surety company that issues your bond will evaluate a variety of factors to determine your individual premium.
Step 5: Submit application
After you have met all the requirements, your final step is to complete the dealer license application and submit it to the DOT. All the application forms are accessible on the DOT website.
When submitting your application, you will need to provide supporting documents including copies of your surety bond, service agreement (if you don’t have a service department), and business facilities statement. You will also need to include the following fees:
- $40 license fee
- $8 salesperson license fee
- $150 dealer plate fee (first two plates)
- $10 fee per additional dealer plate
- $40 license fee for each additional branch location
Once you have everything together, you can send your application packet to the following address:
Wisconsin Dept. of Transportation
Dealer & Agent Section
P.O. Box 7909
Madison, WI 53707-7909
Wisconsin dealer license frequently asked questions
How do you renew a Wisconsin dealer license?
Wisconsin dealer licenses are valid for two years. The Wisconsin Department of Transportation mails car dealers a renewal notice two months before their license expiration date.
To renew, their license dealers need to complete the forms in the packet and mail them back to the DOT along with the renewal fee.
How many cars can you sell in Wisconsin without a dealer license?
Individuals in Wisconsin can sell up to five vehicles a year without a dealer license.
How EZ Surety Bonds can help with a Wisconsin dealer license
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