How to become a licensed motor vehicle dealer in Florida
Before motor vehicle dealerships can conduct business in Florida, proprietors must obtain their dealership license. According to Florida Statute 320.27, any individual that buys, deals, or sells three or more motor vehicles within a 12-month period must maintain an active dealership license with the State of Florida Department of Highway Safety and Motor Vehicles.
Before acquiring a Florida motor vehicle dealer license, applicants must complete the pre-license requirements.
1) Establish dealership’s location, display space, and office space.
According to Florida Administrative Code 15C-7.003, newly established Florida motor vehicle dealerships must meet the following standards for their location, display space, and office space.
- The dealership location must be inspected by a Division of Motorist Services Compliance Examiner.
- The dealership must be located within a permanent structure. If the office is in a trailer, the trailer must be anchored or tied to the ground.
- The dealership office cannot be located in an individuals private residence.
- The office must have a minimum seven-foot ceiling and minimum 100-square-feet of indoor space (excluding hallways, restrooms, or closets).
- The office must be distinctly separate from any other business taking place within the same structure.
- The dealership must have a clear display space as part of the business’s location.
- There must be a sufficient amount of display space to showcase all offered vehicles (indoor space is acceptable).
- The display space must be exclusively under the control of the motor vehicle dealer and have no space set aside for general parking or a public right-of-way.
- The display space must be next to the dealership office or be in a position that is easily accessible to dealership customers.
- Display spaces must have immediate access to a public street or highway.
- Display spaces between differing dealerships must have a distinct barrier no less than three feet tall that clearly shows they are two different businesses.
Motor vehicle dealership owners must locate their nearest compliance examiner from the Motorist Services Regional Offices to inspect the location and confirm it complies with the standards of the Florida Administrative Code.
2) Apply for Federal Employer Identification Number.
Motor vehicle dealership license candidates must obtain a Federal Employer Identification Number (FEIN) from the Internal Revenue System. Applications are available online and can be completed through three steps.
- Applicants must determine their eligibility.
- The business location must be located within a U.S. territory.
- The applicant must have a valid Taxpayer Identification Number.
- The applicant is limited to only one responsible party per day (a responsible party is an individual who has control over the entity).
- Applicants must complete the online application.
- The online application can only be completed within one session and will expire after 15 minutes of inactivity.
- The application must be submitted.
- The FEIN will be provided to the applicant upon completion.
3) Apply for Florida stat sales tax number.
Motor vehicle dealerships in Florida pay business taxes to the Florida Department of Revenue. Proprietors can apply online or download a DR-1 form where the applicant will list their identification numbers, reason for applying, business ownership, background and business activities, and sales and use tax.
4) Complete and pass pre-licensing dealer training class.
Applicants must pass a dealer training course approved by the Florida Department of Highway Safety and Motor Vehicles (FLHSMV). Florida Statute 320.27 requires the curriculum include lessons on:
- statutory dealer requirements
- bookkeeping and recordkeeping
- sales and use tax collection
- vehicle titling and registration
- unfair and deceptive practices laws
- buy-here, pay-here finance laws
- other lessons the school believes to be good practice
To pass the curriculum, students must attend at least 90% of the total hours required by the school and receive a passing grade on the final examination.
5) Document electronic fingerprints for all dealership officers.
With the approval of a service provider within the Florida Department of Law Enforcement, every officer working for or with the dealership must have their fingerprints processed for criminal background checks.
Once these five steps have been completed, proprietors will submit the following documents as a part of their Florida motor vehicle dealer license application packet.
1) Completed Motor Vehicle Dealership Application
Proprietors looking to establish a motor vehicle dealership must complete a license application and submit it to the Florida Highway Safety and Motor Vehicles. A $300 application fee must also be submitted to the regional office responsible for the dealership.
2) Garage Liability Insurance
Proof of garage liability insurance must be attached to the application. The state requires a minimum of $25,000 combined single-limit liability coverage for property damage and bodily injury protection and a minimum of $10,000 personal injury protection. All certificates must include the number of dealer license plates the insurance company has authorized for the dealership.
3) Florida Auto Dealer Surety Bond
Dealers must post a $25,000 independent (used vehicles) or franchise (new vehicles) surety bond to guarantee the licensee will adhere to all licensing rules and regulations outlined on the bond form. The surety bond required for Florida motor vehicle dealers ensures protects both consumers and the state from fraudulent dealers. If the auto dealer does not comply with the licensing regulations and a claim is filed, consumers can be reimbursed for resulting financial losses.
Florida motor vehicle dealer bonds must be issued with the same business name and address used for state licensing paperwork. The independent (used vehicle) bond expires annually on April 30, and the franchise (new vehicle) bond expires annually on December 31.
The legally executed bond form issued by the surety insurance company should be attached with the license application.
4) Fictitious Company Name Registration
Proprietors must file a registration form with the Florida Division of Corporations to claim a title for their motor vehicle dealership. This registration allows a business to operate under a name different from its legal name and give the public the ability to search online to find which individual operates under the business name. A fictitious name for the business is valid for five years and expires on December 31 of its last year. A $50 registration fee, $30 certified copy fee, and $10 certificate of status fee must be paid at the time of submission. Failure to obtain a fictitious name will result in a misdemeanor of the second degree.
5) Training Course Completion Certificate
A copy of the certificate showing the applicant passed the required Florida Highway Safety and Motor Vehicles curriculum must be included in the application.
6) Lease Agreement
Proprietors must provide a copy of their lease agreement for the dealership site. As mentioned above, the location must be inspected by a Division of Motorist Services Compliance Examiner. The office recommends dealers do not sign the lease agreement until the state has approved the site. The company’s name and address (or legal description of the location, if address is not available) should be included in the agreement.
7) Electronic Fingerprint Documentation
The electronic fingerprints for each individual appearing on the license completed by a Florida Department of Law Enforcement service provider must be submitted for a criminal background check. The receipt provided to individuals upon completion should be submitted with the application.
How do I renew my Florida motor vehicle dealer license?
Florida auto dealer licenses expire annually – April 30 for independent (used vehicle) dealers and December 31 and for franchise (new vehicle) dealers. To renew, dealers must submit a renewal application along with a $75 fee. An additional $100 fee is required if the dealership fails to complete their renewal filing on time. Applicants can also pay $150 for a biennial license. Documentation showing active surety bond, garage liability insurance, and fictitious name certification must also be included in renewal applications.
Need a new or renewal Florida dealer surety bond?
April marks the annual renewal season for motor vehicle dealers licenses in Florida. Visit SuretyBonds.com or call 1 (800) 308-4358 to request your new or used Florida motor vehicle dealer bond today!