Starting an auto dealership in New Mexico can be a great choice since there is a constant demand for vehicles from all over the state. However, before you can begin selling used vehicles, you must obtain a car dealer license. Here is a guide to help you get your dealer license.

How to Get Your Dealer License in New Mexico

1. Determine the Type of Car Dealer License You Need

You can acquire various types of car dealer licenses in New Mexico, but the most common is a Retail Dealer License. A Retail dealer sells cars to the general public. Other dealer licenses available in New Mexico include: Wholesaler Only, Manufacturer, Distributor and Dismantler.

2. Secure a Dealership Location 

To establish your car dealership in New Mexico, you'll need to acquire a physical location, pass a Fire Marshal inspection, and comply with zoning requirements. 

There are a few additional steps involved in securing a location and verifying the type of business:

• Select a unique name for your dealership that reflects your brand.
• Establish a location for your dealership and fill out the Place of Business Affidavit. 
• When you submit your application, you'll need to include a copy of your lease or property deed. The property lease must be for at least 6 months. 
• Install a business sign that displays your dealership name and hours of operation. The letters must be at least 6 inches tall and should be clearly visible from the street. 
• When you submit your application, you will need to include pictures or a diagram of your property, building, lot, office (both inside and outside), office equipment, business sign, diagram of the entire building layout, office layout, and a picture of the entire business operation.
• After you have secured a location, you will need to pass a Fire Marshal inspection and complete a Zoning Inspection Certificate.

3. Obtain a Business License and Tax ID Number for Your Car Dealership 

If you're running any business in New Mexico, including a car dealership, you're required to register for a state tax ID number, which is referred to as a Combined Reporting System (CRS) number. To obtain your CRS number, reach out to the New Mexico Taxation & Revenue Department.

4.Get an Auto Surety Dealer Bond 

Make sure you have secured a $50,000 dealer surety bond. Don't worry—the cost of the bond is not $50,000 but is instead based on your credit score. If you have good credit, expect to pay about $450 to $500 per year. However, if you have a few flaws on your credit report, the bond's cost can increase significantly. 

Remember, your dealer surety bond must remain in effect for the duration of your active New Mexico Dealer License. Don't forget to secure your dealer surety bond before submitting your New Mexico Dealer License Application

5. Take a Used Dealer Training Class & Complete Other Documents

Before your dealer license application can be approved, New Mexico mandates that you complete an 8-hour pre-used dealer training class. The Pre-License Education class is administered by the New Mexico Independent Auto Dealers Association. You must complete the entire 8-hour course and submit your proof of training alongside your dealer license application.

In addition to taking the Used Dealer Training Class, you need to make sure you have completed the Application Information and Affidavit. 

6. Submit Your Dealer License Application 

To obtain your dealer's license, you must first fill out the Application for Dealer's License. Once you complete the application, send it to the MVD along with your bond, supporting documentation, and $50 fee. The bond and supporting documentation serve as evidence of your financial stability and compliance with all state regulations.

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

Join ACV Auctions When You Get Your New Mexico Dealer License

Once you obtain a dealer's license in New Mexico, ACV Auctions can assist you in stocking your dealership with quality used inventory from across the state. We are the leading online car auction for dealers in New Mexico and nationwide. Our inventory is available from cities like Albuquerque, Santa Fe, Las Cruces, and Roswell. Even if you need to purchase used car inventory from outside the state, we can help you source it. Sign up for a free ACV membership after obtaining your New Mexico dealer's license to access in-depth reporting and a database of desirable, high-quality vehicles for your business. 

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Sources:

1. JW Surety Bonds. “New Mexico Auto Dealer License Guide | JW Surety Bonds.” JW Surety Bonds, 11 May 2021, www.jwsuretybonds.com/states/new-mexico/auto-dealer-license

2. New Mexico Dealer License - Get Your Auto Dealer License In NM.” New Mexico Dealer, 2021, newmexicodealer.com/new-mexico-dealers-license.html.

3. Bryant Surety Bonds. “New Mexico Dealer License Guide | Bryant Surety Bonds.” Bryant Surety Bonds, 26 Aug. 2021, www.bryantsuretybonds.com/blog/new-mexico-dealer-license-guide.