How to Get an Arizona Dealer License
If you want to sell more than four motor vehicles per year in Arizona, you need to get an Arizona dealer license. The Arizona Department of Transportation (ADOT) and the Arizona Department of Financial Institutions (AZDFI) handle the licensing process for auto dealers. They have established several licensing requirements auto dealers must meet in order to get licensed.
In this guide, we will break down the licensing requirements and the steps you need to take to get your Arizona dealer license.
Here’s what we’ll cover:
- Step 1: Determine license type
- Step 2: Set up your business location
- Step 3: Register your business
- Step 4: Complete a background check
- Step 5: Get a surety bond
- Step 6: Submit dealer license application
- Arizona dealer license frequently asked questions
- How EZ Surety Bonds can help with an Arizona dealer license
Step 1: Determine license type
The first step to getting an Arizona dealer license is to figure out what type of license you need. Each classification permits the dealer to engage in a different type of business. Below are the types of dealer licenses available in Arizona:
- New Motor Vehicle Dealer License: Lets dealers buy and sell new motor vehicles
- Used Motor Vehicle Dealer License: Lets dealers buy and sell used motor vehicles only
- Wholesale Motor Vehicle Dealer: Lets dealers sell motor vehicles to other licensed dealers
- Automotive Recycler: Lets dealers obtain motor vehicles to dismantle, dispose of, or sell their parts
- Broker: Lets the licensee assist in selling and buying motor vehicles in exchange for payment
- Public Consignment Auction Dealer: Lets dealers perform public vehicle consignment services
- Wholesale Motor Vehicle Auction Dealer: Lets dealers conduct vehicle auctions
Step 2: Set up your business location
The next step is to obtain your permanent place of business. This established business location must be a permanently enclosed building with enough space to display more than two motor vehicles. It must also have a sign that shows the business’ name and hours of operation.
When completing your license application, you will need to provide photographs of the business location to verify that it meets all requirements.
Step 3: Register your business
Auto dealers must register their business with the State of Arizona before applying for a dealer license. The government agency responsible for business registration depends on the entity type.
Partnerships and sole proprietors must register with the Arizona Secretary of State.
Corporations and limited liability companies (LLC) must register with the Arizona Corporation Commission.
All business types must register with the Arizona Department of Revenue to receive a Transaction Privilege Tax License.
Step 4: Complete a background check
The Motor Vehicle Division (MVD) requires every person with 20% or more ownership in the company to submit a criminal background check by completing the Authorization to Release Information – Statement of Personal History form, and by providing fingerprint cards.
There is a $22 fee for each background check. You can learn more about the process by visiting the Arizona Applicant Processing Services website.
Step 5: Get a surety bond
The Department of Transportation requires auto dealers to post an Arizona surety bond as part of the licensing process. The bonds help ensure that dealers comply with all regulations and provide financial protection to the state and consumers if they are damaged by the dealer’s license violations.
The required amount for Arizona auto dealer bonds varies based on license type:
- Wholesale Motor Vehicle Auction Dealers and Brokers: $25,000 bond
- New and Used Motor Vehicle Dealers: $100,000
- Wholesale Motor Vehicle Dealers: $125,000
You only need to pay a small portion of the bond amount as a premium, typically between 1% and 5%. Before the surety company issues the bond, they will evaluate your experience, creditworthiness, and financial history to determine your exact premium.
Step 6: Submit dealer license application
Once you’ve satisfied all the requirements, you can go ahead and submit the dealer license application. The application is available online through the AZ MVD Now portal.
When submitting your application, you will need to pay a $100 licensing fee and a $15 filing fee and provide the following supporting documents:
- Authorized Presence Documentation
- Authorization to Release Information/Statement of Personal History
- AZ MVD Now Dealership Administrator Application
- AZ MVD Now Organization Administrator Application
- Photos of business location
Arizona dealer license frequently asked questions
How do you renew an Arizona dealer license?
Arizona dealer licenses must be renewed annually. You can complete the renewal process online using the AZ DOT Now portal. There is a $100 fee to renew your Arizona dealer license.
How much does a dealer license cost in Arizona?
Arizona auto dealers must pay a $100 licensing fee and a $15 filing fee to receive a license. Dealers must also purchase a surety bond, whose price varies on an individual basis.
How many cars can you sell in Arizona without a dealers license?
Individuals and businesses can sell up to four motor vehicles in the State of Arizona per year without a dealer license. If you sell more than four vehicles, you must get a dealer license from the Arizona Department of Transportation.
How EZ Surety Bonds can help with an Arizona dealer license
You now know what it takes to get your Arizona dealer license. When you are ready to get the process started, EZ Surety Bonds can help you get your auto dealer bond quickly and conveniently. Apply online today or get in touch to learn more.