Requirements to Starting Your Dealership
This section explains the 11 requirements that need to be completed in order to get your license. If you have not already started, you will want to start “The Paper Chase” processes as soon as possible. It may take time to get approved for a bond, complete construction on a dealership, or zoning approved.
Here is the list of requirements and steps to getting your dealer license:
- Education - You’re already on this step by taking this course! The requirements are that at least one active owner from a prospective used-only or wholesale-only dealership must attend an 8-hour pre-licensing class and pass a closed-book written examination prior to applying for your dealer license.
- Dealership name - Prior to applying as a dealer or obtaining a dealer bond, you should call the Dealer Team at (208) 334-8681 to make sure that the proposed name of the dealership is not deceptively similar to an existing dealership´s name.
- If your dealership has a D.B.A., file that name with the Secretary of State's office.
- If the dealership is owned by a corporation, limited-liability company, or a limited-liability partnership, you must submit verification from the Secretary of State at (208) 334-2300.
- Vehicle Dealer Performance Bond - Upon initial application, Idaho Code requires all dealers to file a performance bond with the Department. The bond shall be in the amount of:
All bonds must be issued by a corporate surety licensed to do business within the state of Idaho. A bond may also be posted in the form of cash or a certificate of deposit, which remains on deposit until five years after the dealership has gone out of business. The bond must reflect the exact ownership, D.B.A.s, and dealership location that is listed on the application for dealer license.
- $20,000 for all retail dealers,
- $40,000 for all wholesale-only dealers, and
- $10,000 for motorcycle, all-terrain vehicle, utility type vehicle, truck campers, and snow machine dealers.
- ICAR Fund - In addition to maintaining a vehicle dealer performance bond, all retail vehicle dealers will be required to pay $300 toward the Idaho Consumer Asset Recovery Fund (ICAR) as a condition for initial license issuance or license renewal. Wholesale-only dealers are exempt from paying into ICAR.
- Building and Zoning - Your building must be an enclosed commercial structure built to meet applicable building codes and zoning. Submit a letter of zoning approval or a zoning official´s signature on the dealer application. Zoning approval is also required for off-site sales, changes of location, and supplemental lots.
- Application for Idaho Vehicle Dealer License - The application for dealer´s license must be completed in FULL. It will take about 30 days to process the application. Here are the other specific requirements:
- All owners/corporate officers must be listed.
- A personal history for each owner, partner, corporate officer, or director must be completed, but inactive corporate officers are not required to obtain identification cards.
- The name of the dealership and location must be accurate and match the information on the bond that is submitted with the application.
- All owners, partners, officers, or directors must sign the application in the appropriate area and their signatures must be notarized. Please allow 30 days for processing.
- Seller Permit Number - A copy of the seller's permit number issued in the name of the dealership by the Idaho Tax Commission must be submitted with any retail dealer application. Contact the Idaho Tax Commission.
- Employer Identification Number - Submit your EIN with your application, which is issued by the Federal Government.
- Liability Insurance - Submit your liability insurance certificate. The certificate needs to be issued with “any auto” or it needs to state that it complies with Idaho Code 49-1608A. The minimum coverage amount is:
Dealership Location Inspection - After the application is approved, the Motor Vehicle Investigator for your district will be contacted by the Dealer Licensing Team and the investigator will call you for an appointment to inspect your dealership location. The Investigator will verify the location, display area, office, sign, and give instructions on how to complete documents for titling purposes.
Dealer Owner and Salesperson Application - Complete (ITD-3171) for all owners and salespeople. A copy of this form will serve as a 60-day temporary license but is not valid until it has been submitted to ITD with fees.
- $25,000 bodily injury to one person,
- $50,000 bodily injury to two persons, and
- $15,000 property damage or destruction.
Principal Place of Business Requirements
This is the location where the dealer and his salespeople conduct the dealer´s business. Other locations belonging to the same dealership and operating under the same name are called “supplemental lots.” Supplemental lots must be located in the same or an adjacent county of the principal location.
The following are main features of the inspection of your Principal Place of Business:
- Declared hours: Dealers must declare the business hours that the principal place of business will be open and staffed by a licensed salesperson.
- Dealership sign: An exterior sign must be permanently affixed to the land or building, have letters that are clearly visible and readable from the main road, and meet local zoning requirements. The recommended size for an exterior sign is at least 24 square feet (3´ x 8´, 4´ x 6´, etc.) with 4-inch-square minimum lettering. The sign should include the trade name of the dealership, street address, and dealer number. For a wholesale dealer, and for ease of reading by prospective customers, the sign may be painted on the office window next to the entrance door.
- Dealership office: Must be a clearly defined area including a locking office to keep books; a desk; filing cabinet; and a phone for the business. The telephone number must be listed in the general directory. The telephone must be answered in the name of the dealership and may be forwarded to another location or an answering machine.
- Display area: The display area must be large enough to display five or more vehicles/vessels of the type the retail dealer is licensed to sell. The “improved display area” should be adjacent to the dealership office, owned or leased by the dealer, and separated from other business property by visual boundaries or signing. If two separate dealerships are located adjacent to one another, there shall be a physical divider made to separate the display areas. (Ropes, chains, barriers, etc., shall meet the definition of physical dividers.) This requirement is not for a wholesale-only dealership.
- Restrictions of dealership use: The principal place of business must be devoted mainly to the business for which the vehicle dealer is licensed. In addition, the office cannot be a room or rooms in a hotel, rooming house, apartment building, or a part of any single- or multiple-unit dwelling house unless the entire ground floor is principally occupied for commercial purposes and the office of the dealership is located on the ground floor.