How to become a licensed motor vehicle dealer in Missouri
Motor vehicle dealers must be licensed if they plan to start a Missouri automobile dealership. Those who qualify as an auto dealership sell eight or more vehicles in one year or more than five trailers, powersports vehicles, or boats. Candidates must complete the following 10 steps before they are eligible for a license and can submit a completed application to the Dealer Licensing Section of the Missouri Department of Revenue.
- Determine the auto dealer license type.
- Complete a dealer education program.
- Note: This step is only required for first-time applicants of a used vehicle dealer license.
- Register the dealership with the Missouri Secretary of State.
- Obtain a permanent business location.
- Complete a criminal background check.
- Obtain a franchise agreement, if applicable.
- Acquire garage liability insurance.
- Post a Missouri auto dealer bond or irrevocable letter of credit as needed.
- Get a business location inspection and certification.
- Compile the related documents and submit the application.
1. Determine the auto dealer license type
The Motor Vehicle Bureau at the State Department of Revenue of Missouri issues car dealer licenses for businesses to be able to legally sell new or used vehicles. The most common auto dealer licenses sought are:
- Motor Vehicle Dealer: All dealers who sell new vehicles; this may include recreational vehicle (RV) and powersport dealers, but dealers have to obtain special plates for these makes.
- Franchise New Motor Vehicle Dealer: New auto dealers who are under a franchise agreement to sell a specific make of vehicle.
- Wholesale Motor Vehicle Dealer: Auto dealers who sell vehicles wholesale to other businesses.
- Used Motor Vehicle Dealer: Dealers who sell any makes of used vehicles.
**See the full list of auto dealer license types on page 8 of the Missouri Dealer and Business Operating Manual.
2. Complete a dealer education program
If you are applying for a used vehicle dealer license for the first time, Senate Bill 747 of Missouri states applicants must complete a state-approved dealer education program. Proof of attendance by the applicant must be provided within the licensure application packet. Dealers can register for the program here. Wholesale dealers are not required to complete the dealer education program.
The following dealer types are exempt from the requirement:
- Used motor vehicle dealers licensed prior to August 28, 2006;
- New motor vehicle franchise dealers;
- New franchise powersport dealers;
- Wholesale dealers; and
- Wholesale and retail auto auctions.
A Dealer Educational Seminar will include the dealer licensing requirements of Sections 301.550 to 301.573 RSMo. If you are required to attend a Dealer Educational Seminar, you must attend an approved seminar within 12 months of applying for a dealer license. A certificate of completion will be given by the seminar provider under the dealership name at the end of the session. This certificate of completion must be attached to the application packet for licensure and number plates(s) (Form 4682) when submitted.
3. Register the dealership with the Missouri Secretary of State
It is required under Missouri law that dealers who conduct auto dealing activities register their business and business name with the Secretary of State’s Business Services Division. Dealers can register their business name with the Missouri Secretary of State by visiting the website here or calling (573) 751-3827. A copy of this registration is not required to be submitted with your dealer application.
The registered business should match the name listed on the surety bond or the title transaction will be rejected by the State.
**NOTE: Business name registration with the Missouri Secretary of State costs $7.
4. Obtain a permanent business location
All Missouri auto dealers must have a place of business used for the sole purpose of selling vehicles under their specific business type. The business location must meet the following requirements:
- Be a permanently enclosed building
- Contain space to store all records
- Have a working telephone landline that the public can call
- Have a display area, which cannot be a public street, to display multiple motor vehicles and remain visible from the nearest street
- Be open at least 20 hours per week between the hours of 6 am to 10 pm and have the hours of operation posted at the front entrance to the building
- Missouri laws prohibit most auto dealers to operate on Sundays. The exception is motorcycle dealers, which are allowed to be open on Sundays; however, if these businesses also sell cars and trucks, they must remain closed to abide by state law.
- Include proper signage that:
- Contains the name of the business as it’s publicly known
- Has letters at least six inches in height
- Is able to endure most weather conditions
**NOTE: Vehicle auction dealers must display two additional 2 x 6 ft. signs that read “Attention Buyers: Vehicles sold at this auction may not have had a safety inspection.”
5. Complete a criminal background check
Applicants are required, prior to applying, to schedule and undergo a criminal background check. Applicants can complete the online form on the Missouri State Highway Patrol’s Missouri Automated Criminal History website (MACHS criminal history search). Applicants must include a printout of the results with their application.
There will be a fee of $13 charged for each name that is checked, so it is important to have payment on hand when completing the form online. Applicants can read more about specifications before and after the background check on page 18 of the Missouri Dealer and Business Operating Manual.
6. Obtain a franchise agreement, if applicable
Franchise dealers must obtain a written statement from the franchisor stating that they have permission to sell new vehicles. A “Manufacturer’s Certification of a Dealer” is deemed acceptable for franchise authorization only if the franchise agreement is on file with the Dealer Licensing Section. A manufacturer’s certification of a dealer is similar to possessing a title; however, if you purchased a new vehicle from a new-car dealer, you will have an MSO instead of a title.
A manufacturer’s letter of intent will not qualify as proof of franchise. A dealer wanting to sell new vehicles who does not have a franchise agreement will have to apply for a title in the dealership’s name.
This step is not necessary for first-time dealers who are applying with a dealership type such as used, wholesale, or general.
This document will require the following information:
- Full name
- Address of the franchisee
- Effective date of the franchise agreement
- Expiration date
- Make(s) of the vehicle(s) authorized to sell
In the event that the franchise agreement is canceled, the document must provide notification to the Department at least 30 days before the cancellation date.
7. Acquire garage liability insurance
Missouri Statute Section 397.201 states that motor vehicle dealers must have a motor vehicle liability insurance policy in place to ensure that their company party is primarily responsible for damage. It is required that all vehicles with dealer plates are covered. In broader terms, this insurance covers bodily injuries endured by non-employees in the course of daily operations, including during test drives of customer-owned vehicles.
You can add additional coverage to a garage liability policy to extend insurance to customers’ vehicles while they are in your custody, care, and control. Damage to or loss of a customer’s vehicle is covered if said event to the car was caused by:
- An employee’s negligence or error
- Faulty parts
- Severe weather (e.g., hailstorms, tornadoes, hurricanes)
- Natural disaster (e.g., floods, earthquakes, fires)
- Theft or vandalism
The cost of garage liability insurance depends on certain choices made by the business owner:
- The specific coverages included in the policy
- The deductible chosen when the policy is purchased
- The coverage limits (i.e., the maximum amount the insurance company will pay on a single claim)
In most cases, the annual premium for garage liability insurance will be in the range of $300 to $2,000.
8. Post a surety bond or irrevocable letter of credit
Missouri House Bill 1963 declares a motor vehicle dealer surety bond requirement for auto dealers in the process of licensure. Under the updated legislation effective August 28, 2020, dealers must post a $50,000 surety bond (page 85 in the Missouri Dealer and Business Operating Manual) or irrevocable letter of credit (page 86) before obtaining a written agreement. This agreement must cite a delayed delivery for a vehicle’s certificate of ownership. Bond amounts are credit based and vary per applicant. Dealers may pay up to $100,000 bond if they operate as an auction dealers or lease and rent fleet companies or are selling vehicles without a title.
Give us a call at 1 (800) 308-4358 or fill out our online form to get your motor vehicle dealer bond today!
With a surety bond, the obligee has a guarantee that the person obtaining the bond will abide by the rules in place. Therefore, a surety bond insures the financial protection of the obligee and customers; the public will receive reimbursement for financial harm if the auto motor dealer does not or cannot comply with the licensing regulations, and all required taxes and fees will be paid to the State of Missouri.
An irrevocable letter of credit is like a surety bond, for both are financial guarantees. However, a bank or other financial institution is in the role of backing an irrevocable letter of credit instead of the surety company. When applying for an irrevocable letter of credit, banks often require applicants (dealers) to have 100% of the credit amount in their account, guaranteeing repayment via the dealer’s account if a claim is made. For those looking to invest that money in their business rather than have the $50,000 remain in their bank for insurance, a bond is the recommended option.
The dealer must be bonded for the entire licensure year/calendar year. A bond that is submitted must be in effect through December 31 of the licensure year or be issued as a “non-expiring” bond. If the bond or letter of credit on file becomes expired or canceled, new documents must be submitted to the Department on or before the date of expiration or cancellation. The bond or irrevocable letter of credit does not apply to auctions or manufacturers.
9. Get a business location inspection and certification
Before your application is approved, an authorized law enforcement officer or designee will need to complete an inspection of your building premises and certify it has met all the requirements for licensure by completing Section 13 of Form 4682. He or she will need to fill out Form 5748.
For the counties of Boone, Buchanan, Camden, Cape Girardeau, Clay, Cole, Franklin, Greene, Jackson, Jasper, Jefferson, Platte, St. Charles, or Taney, the applicant will need to arrange the appointment with a local or state police officer. For locations in St. Louis County or St. Louis City, you will need to have your lot inspected by the Department of Transportation and Public Works. For all other counties not listed, you should contact the Missouri Highway Patrol to schedule a time for inspection.
10. Compile the related documents and submit the application
To obtain motor vehicle dealer licensure, applicants must fill out the form available online with the Missouri Department of Revenue.
The application requires the following information or documents to be submitted:
- Birthdates, Social Security numbers, full names, and addresses of owners
- Classification of the type of operation and units sold
- Number of license plates requested
- Payment of appropriate fees
- Franchise trade name information and form signed
- Business Photograph – Dealers must submit a photograph of their business location, including the display lot, building(s), and sign
- Business Inspection and Certification Form signed
- Background Check – All dealer applicants must obtain a background check and submit it with their application. Dealers can obtain a background check here.
- Financial Responsibility – A signature or certificate of financial responsibility is required for all dealer applicants. This document ensures that the dealer will uphold liability insurance on all motor vehicles that the dealer owns in the display lot or is licensed under.
- Dealer Plates – Dealers may request the number of plates needed when submitting their application. The dealer plate guidelines are as follows:
- Up to three starting plates
- One additional plate for every 10 sales (different for RV dealers)
- 350-plate limit for manufacturers
- Salvage dealers can purchase one additional vehicle plate for every 50 vehicles sold between July 31 of the previous year and June 1 of the current year.
To complete the ODR_4682 application online, applicants must begin by creating a MyDmv login. If applicants chose to fill out a physical application form, they must submit the application and all required items to the Dealer Licensing Section, P.O. Box 43, Jefferson City, MO 65105-0043.
The list of the following fees can be made payable to the Missouri Department of Revenue by money order or check. Each separate license fee is mandatory each year. Applicants can learn more details about detailed fees on page 24 of the Missouri Dealer and Business Operating Manual. The base fees are as follows:
- License fee: $150
- First four dealer plates: $50
- Each additional plate: $10.50
Enclose a check or money order made payable to the Missouri Department of Revenue and mail to:
Motor Vehicle Bureau
Dealer Licensing Section
P.O. Box 43
Jefferson City, MO 65105-0043
The Missouri Department of Revenue may resubmit checks returned online for insufficient or uncollected payment funds.
How Does a Missouri Auto Dealer License Get Renewed?
The motor vehicle dealer license expires every year on December 31 and must be renewed before the expiration date to continue operations without interruption. It is important to note that there are no grace periods given for late renewals. Dealers can renew their license online through the Missouri Department of Revenue, Motor Vehicle Bureau, Business Licensing Portal.
The licensing period for auto dealers runs from January 1 to December 31. Thus, you have to renew your license every year. You have to submit your renewal application before October 30 to avoid a $25 penalty. If you send it after December 31, the penalty is $50.
For a full list of requirements, visit the Missouri Dealer and Business Operating Manual.
Need a Surety Bond?
If you’re a Missouri motor vehicle dealer in search of a surety bond, call 1 (800) 308-4358 to talk to a SuretyBonds.com surety expert or get a free, no-obligation quote.