If you’re looking to open a dealership in Iowa, you’ll need to follow the process in order to secure your license. There are several steps involved, and failing to complete any of them could delay your application and therefore your business operations. To help you with the process, we have compiled a checklist of everything you need to get your dealer application submitted and your sales rolling in. 

6 Steps to Getting Your Iowa Dealer License 

1. Identify Which Dealer License You Need

In Iowa, anyone who is selling more than six vehicles over a period of 12 months must get a dealer license. But the state makes it relatively simple because the application is the same regardless of the type of vehicle you will be selling. In other states, this isn’t always the case. Whether you’re selling used or new cars, motor homes, RVs, trucks, motorcycles, or low speed/motorized bikes in Iowa, they all can be processed using the same application form¹ .

However, if you plan to be a rebuilder, manufacturer, wholesaler, or mobile home retailer, you will need to follow a different process. 

2. Establish a Business Location 

Your business must have three main areas: an office, a repair facility, and a display area. Each of those has additional detailed requirements ². 

Your office must have:

• A landline phone with a listed number 
• Regular business schedule of at least 32 hours per week Monday to Friday 

Your repair facility must have: 

• Enough space to repair at least one vehicle at a time, including all necessary tools 
• Interior walls separating the space from the rest of the salesroom, separated off by interior walls 
• Minimum space for motorized bikes and motorcycles of at least 10 x 15 feet 
• Minimum space for other vehicles of at least 14 x 24 feet 

Your display area must have:

• A minimum of 18 x 30 feet of space for vehicle storage and 10 x 15 feet for motorcycles and motorbikes. 

3. Complete the Vehicle Dealer Education Course

Dealer license applicants are required to take an 8-hour course before completing and submitting an application. The course is offered through the Iowa Independent Automobile Dealers Association and must be completed by at least one owner, operator, or partner of the business. All used dealers need to complete the course. There are a few exceptions outlined by the Iowa Department of Transportation so check with them to see if you qualify for exemption. 

4. Secure Liability Insurance and a Dealer Bond 

You must obtain coverage of at least $100,000 for bodily injury or death to one person, $300,000 for two people, and $50,000 for property damage. You must also get a dealer bond for at least $75,000. The amount you pay won’t be the full value, but rather a fraction of this based on your personal financial details. 

5. Gather the Rest of Your Paperwork 

In addition to the application itself, and the above materials, you will need to submit: 

• A zoning letter from your town showing that your business location complies with all local regulations 
• Franchise agreement if you are selling new vehicles 
• Proof of passing an on-site inspection from the Bureau of Investigation & Identity Protection

6. Submit Your Dealer License Application and Fees

The fees due with your application are the following: 

• $70 for registration 
• $70 for the dealer license 
• $40 per dealer plate 

You can mail your dealer license application and all associated documentation to: 

Office of Vehicle and Motor Carrier Services 
Iowa Department of Transportation 
P.O. Box 9278 
Des Moines, IA 50306

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

Get Your Used Car Inventory in Iowa From ACV Auctions

Once you have your dealer license set up in Iowa, work with ACV Auctions to find the best used car inventory in Iowa and throughout the country. We have a state-of-the-art online auctioning platform featuring high-quality inventory that has been vetted and inspected by a member of our team. Each vehicle is accompanied by a detailed inspection report, so you can feel confident about the cars you bid on. Register with us today to get started. 
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Sources

1. Bryant Surety Bonds. (2023). “Iowa Auto Dealer License Guide” Bryant Surety Bonds. Retrieved November 11, 2023. https://www.bryantsuretybonds.com/blog/iowa-dealer-license-guide 
2. Iowa Department of Transportation. “Vehicle Dealer & Recycler License: Selling At Retail in Iowa.” Iowa Department of Transportation. Retrieved November 11, 2023. https://iowadot.gov/mvd/buyingselling/buyingselling/dealer