As you plan to open an auto dealership in Virginia, you may be confused about the very first step of the process: applying for a dealer license. Regardless of the state you’re in, applying for the license can be time-consuming and requires numerous details. Whether you’ve owned and operated a dealership in another state before, or this is your first time entering the business, we are here to help you. 

We’ve compiled a step-by-step guide to help you complete the application process with ease. By avoiding errors and staying organized, this list can ensure that you  receive your license on the first attempt and can quickly start operating your business. Make sure  to double-check with the DMV to ensure you are accessing the latest information. 

Steps for Getting Your Virginia Dealer License 

1. Identify which type of license you need

Licenses are differentiated based on whether you’re selling used or new vehicles. In Virginia, the two license types are¹: 

• Independent dealer-operators
• Franchise dealer-operators 

2. Obtain a Permanent Location for your Business

Before you can even submit an application to be an auto dealer in Virginia, you need to have a permanent business location that meets all requirements. When  choosing a location, ensure you meet the following criteria²: 

• All local zoning laws must be met. 
• The business cannot be in a residential location and has to have at least 250 square feet of space devoted exclusively to the dealership. 
• The office must have all essential furniture and utility items, including telephones, electricity, heating, internet, and an email address. 
• You must maintain and store the records required by the Code of Virginia’s section 46.2-1529. 
• There must be enough space to display ten or more vehicles. 
• You must have your business hours on display; it must be open at least 20 hours a week with at least ten of those hours falling between 9 a.m. to5 p.m. Monday through Friday. 
• A visible sign that shows the name of the dealership with words at least six inches tall. 
• A board-approved buyer’s order that indicates the name, address, and phone number for the dealership. 

3. Get Liability Insurance and an Auto Dealer Bond

For each dealer plate issued, you’ll need to provide proof of insurance. Furthermore, you need to obtain a $50,000 bond. The cost of this bond will be a proportion of the overall value and will vary depending on personal finance factors like credit score. 

4. Complete a Licensing Course and Pass the Test

If you are a new dealer, you need to complete a pre-licensing course and pass the associated test. You can get the course through Virginia Independent Automobile Dealers Association —it’s a two day course and it runs every month. The cost is $485. After the course, you need to complete the Dealer-Operator and Salesperson’s test which you can take through the DMV for $50. 

5. Get all of your Documents Together 

You will need to send the following documents with your application:

• Certificate of Zoning Compliance signed by the local official. 
• Criminal history check form. 
• Dealer plate application.
• Application for Certificate of Qualification/Salesperson’s license.  

6. Submit the Application and Pay the Fees

In Virginia, there are multiple types of fees you have to pay with your application: 

• Dealer certificate: $200
• Motor Vehicle Transaction Recovery Fund (annual fee): $250
• First two dealer plates: $60
• Additional dealer plates: $26 each 
• Salesperson’s license: $25 each 
• Criminal history background check: $10 each

Mail your application to: 

Virginia Department of Motor Vehicles
P.O. Box 27412
Richmond, VA 23269 

Or, you can bring your documents in person to a DMV service center.

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

Find Used Car Inventory in Virginia with ACV Auctions

Once your Virgnia dealer license application is approved, your priority will be getting the right vehicles on your lot to drive business. That’s where ACV Auctions can help you. We are an online dealer car auction that helps you fill your lot with the best used cars on the market in Virginia or across the country, free of surprises. Each vehicle is inspected by our team and we provide all the details you need to know so that you can be confident when you bid. Contact us to learn more and get started today. 

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Sources

1. JW Surety Bonds. “Virginia Auto Dealer License Guide.” Retrieved October 12, 2023. https://www.jwsuretybonds.com/states/virginia/auto-dealer-license 
2. EZ Surety Bonds. “Virginia Dealer License Guide.”  Retrieved October 12, 2023. https://www.ezsuretybonds.com/blog/virginia-dealers-license-guide