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.

6 Steps to Getting an Arizona Dealer License

1. ‍Select a License Category

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

• New Motor Vehicle Dealer: Required for Individuals or entities selling new vehicles. An authorization letter from the manufacturer must be presented to the ADOT to apply for this license.
• Used Motor Vehicle Dealer: This license is specifically for selling used motor vehicles and grants access to exclusive dealer auctions in the USA.
• Wholesale Motor Vehicle Dealer: Allows for the sale of motor vehicles exclusively to licensed traders.
• Public Consignment Auction Dealer: Enables licensees to hold open vehicle auctions for the general public.
• Wholesale Motor Vehicle Auction Dealer: This license is for auctioning vehicles only to registered dealers.
• Broker License: This license is for individuals acting as intermediaries between car dealerships or manufacturers and the general public, earning a fee.
• Automotive Recycler: Enables licensees to purchase motor vehicles to recycle, dismantle, or sell them in parts.
• Manufacturer License: Vehicle manufacturers must also get a license, but they are not allowed to sell cars straight to the general public.
• Trailer Manufacturer: Grants trailer manufacturers authorization to operate.

2. Secure a Business Location

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.

3. Register Your Business

Before applying for a dealer license, you must register your business with the State of Arizona.

• If you are a sole proprietor or a partnership, you will need to register your business with the Arizona Secretary of State.
• If your business will be run as a corporation or LLC (Limited Liability Company), then you will need to register it with the Arizona Corporation Commission.
• All businesses, except manufacturers, must get a Transaction Privilege Tax License issued by the Arizona Department of Revenue. 
• Corporations and LLCs must provide a Federal Employer Identification Number (FEIN) issued by the IRS.

4. Complete a Criminal Background Check

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.

5. Obtain an Auto Dealer Bond

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:

• New Motor Vehicle Dealer, Used Motor Vehicle Dealer and Public Consignment Auction Dealer - $100,000
• Broker, Wholesale Auto Auction Dealer, Wholesale Motor Vehicle Dealer - $25,000
• Automotive Recycler - $20,000

The bond’s premium, which depends on your credit score and financial standings, ranges from 0.75 to 5 percent of the covered amount.

6. Apply for Your Arizona Dealer’s License

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:

• Filing fee for all license types: $15
• Dealer license: $100
• Criminal records check: $22 per individual
• Secondary business sites’ licenses: $50 each
• License plate: $30

This is not intended as legal advice. If you have questions about dealer licensing requirements, please seek the assistance of legal counsel.

Partner With ACV Auctions Upon Receiving Your Dealer License

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.

‍

Sources:

"How to Get an Arizona Dealer License." EZ Surety Bonds, 20 Sept. 2023, www.ezsuretybonds.com/blog/how-to-get-an-arizona-dealer-license. Accessed 19 Sept. 2023.

"The Complete Arizona Dealer License Guide." Lance Surety Bond Associates,, 20 Sept. 2023, www.suretybonds.org/blog/get-arizona-dealer-license. Accessed 19 Sept. 2023.

‍