Getting your Arizona Motor Vehicle Dealer License can be a long and drawn out task. With the help of this post, hopefully the application process can be less stressful.
Which Arizona Motor Vehicle Dealer License Do You Need?
There are seven kinds of licenses for motor vehicle dealers in Arizona. The kinds are: the new motor vehicle dealer license, the used motor vehicle dealer license, the auto broker license, the wholesale motor vehicle dealer license, the public consignment auction dealer license, the wholesale auto auction dealer license, and the automotive recycler license.
A New Motor Vehicle Dealer is a dealer that buys, sells, exchanges or negotiates the sale of new or used vehicles. These vehicles can be acquired from a wholesale dealer, the franchise the dealer is associated with or a trade-in obtained from a customer. New Motor Vehicle Dealers are always affiliated with a franchise or corporation. This franchise or corporation generally provides the new cars for the dealer. So, if the applicant was applying for a license to a Toyota dealership, the applicant would have to get the New Motor Vehicle Dealer license.
A Wholesale Motor Vehicle Auction Dealer is someone who auction cars. However, they exclusively auction cars to licensed motor vehicle dealers. The Wholesale Motor Vehicle Auction Dealer never owns, sells or buys the motor vehicles in the auction or in the normal course of business.
A Wholesale Motor Vehicle Dealer is a person who sells used motor vehicles exclusively to licensed motor vehicle dealers. In Arizona, wholesale motor vehicle dealers can only sell four cars to the public. If they sell more, they must register for a different license that allows sale to the public.
An Auto broker is someone who professionally helps purchase new motor vehicles. It is illegal for an auto broker to be an employee or sales agent of a new or used motor vehicle dealership. They also cannot be an auto auctioneer or employee of a motor vehicle dealer manufacturer.
A Used Motor Vehicle Dealer is independent of a new motor vehicle dealer. The Used motor vehicle dealer is separate from the wholesale motor vehicle dealer and the public consignment auction dealer. They buy, sell, auction or exchange four or more used cars a year.
A Public Consignment Auction is someone who does live auctions on a contractual basis at a public consignment auction dealer’s place of business or other permitted location.
Finally, the Automotive Recycler is someone who buys motor vehicles for the purpose of dismantling, selling or recycling parts. This license is only needed for those who dismantle six or more cars per year.
Get Your Arizona Motor Vehicle Dealer Surety Bond
The Arizona Motor Vehicle Dealer Surety Bond is an essential part of the Arizona Motor Vehicle Dealer License application process. The Arizona Department of Transportation requires that licensees submit the Arizona Motor Vehicle Dealer Surety Bond in order to be granted a license. No person or business can be granted a license without having posted this bond with the Department of Transportation. This bond must be kept valid and on file with the Department in order for the license to stay valid.
A separate bond must be filed with the Department of Transportation for each additional county the licensee wishes to open a business in. It must then be signed by the individual applying and all partners or a corporate officer. The bond amount will differ depending on the type of license the applicant applies for. Automotive Recycler licensees must obtain a surety bond that amounts to $20,000. Auto broker, Wholesale Auto Auction Dealer and Wholesale Motor Vehicle Dealer applicants must post a surety bond that amounts to $25,000. New Motor Vehicle Dealer, Used Motor Vehicle Dealer and Public Consignment Auction Dealer applicants need to post a surety bond in the amount of $100,000.
The Arizona Motor Vehicle Dealer Surety Bond helps ensure that customers and the state are protected from your company. It protects the public and state from financial harm or deceit that your company may do it. It sets up a system where if a claim is placed on the bond and it is valid, your company has to pay the surety company back for the loss. This ensures that motor vehicle dealers will act responsibly and run their business in a way that does not put them, the state or the public at risk.
Get Fingerprinted and Submit to a Background Check
Arizona Motor Vehicle Dealer applicants must submit fingerprints and allow a criminal background check to be run on them. Fingerprint cards can be done by local police, county sheriffs or government agencies for a fee. The list of locations in Arizona that will do a fingerprint card for you can be found here. Partners who own more than 20% of the company must also have a background check run. Having a a prior conviction or criminal record does not lead to automatic license denial. However, it will automatically deny those who have been convicted an auto related felony or fraud within the last 10 years. This background check looks at personal history to help determine that licensees, partners or corporations will run responsible and ethical businesses. While this check can be strict, there is an option for legal appeals if you are denied a license due to the required background check.
Submit the Necessary Fees and Forms for Licensing
There are a number of additional fees and forms applicants need to complete and submit before licensing. The motor vehicle dealer application form is fairly straightforward. You can find the other necessary forms and more information about the application HERE. The fees needed for this application are a $15 filing fee for the application, $22 criminal background check fee which must be paid for each individual that gets one, $100 provisional license fee, $100 license fee, and $50 fee per branch if there is more than one.
Once you have done these steps, you are ready to submit the Arizona Motor Vehicle Dealer License Application to the Department of Transportation!