How to get a dealer license in Minnesota

DVS says you must have a Minnesota dealer license if you engage in the business of leasing, selling or arranging the sale of vehicles, have leased or sold more than five vehicles (wholesale or retail) in a 12-month period, sell used parts or scrap metal from vehicles, or conduct consignment sales. Minn. Stat. 168.27, subd. 8 exempts isolated or occasional sales, meaning the sale, purchase or lease of not more than five vehicles in 12 months, not counting pioneer or classic vehicles.

• New motor vehicle dealer: Franchised dealers that sell new vehicles covered by their franchise. They may also sell, lease, wholesale and broker used vehicles.
• Motor vehicle wholesaler: Businesses that sell vehicles only to licensed dealers for resale. New vehicles may be sold only to dealers licensed for that make.
• Motor vehicle broker: Businesses that arrange sales or leases between buyers and dealers for a fee. Brokers cannot sell vehicles themselves or display vehicles for sale.
• Motor vehicle lessor: Businesses that lease or rent vehicles. They may sell their returned lease vehicles without a used dealer license.
• Motor vehicle auctioneer: Businesses that sell used vehicles belonging to others at auction.
• Limited used vehicle license: 501(c)(3) charities that raise funds by accepting donated vehicles and selling them through a licensed auctioneer or to licensed dealers. No dealer plates.
• Vehicle salvage pool: Businesses that store and display damaged or junked vehicles for sale as agents of insurance companies.
• Used vehicle parts dealer: Businesses that buy vehicles to dismantle and sell used parts and scrap. They may not sell vehicles.
• Scrap metal processor: Businesses that buy vehicles to process and sell the metal for remelting.
• Dealer of motorized bicycles, boat and snowmobile trailers (DSB): Dealers that sell only mopeds and motorized bicycles and boat, snowmobile and small horse trailers. The license is $10 and the bond is $5,000.
• Drive-away/in-transit: Minnesota businesses that transport vehicles owned by others by driving or towing them.

Surety bond. $50,000 for all dealer types except DSB dealers (motorized bicycles and boat, snowmobile and small horse trailers), who need $5,000. File the original bond on form PS2446, and send a bond rider for any name or address change. DVS can cancel a license if the bond lapses (Minn. Stat. 168.27, subds. 12a and 24).

Insurance. Liability insurance is required on all vehicles held for sale or resale, with minimum limits of $30,000 per person, $60,000 per accident and $10,000 property damage, $25,000 per person and $50,000 per accident of uninsured and underinsured motorist coverage, and $20,000 medical and $20,000 non-medical personal injury protection. Send the declaration page with the application. You must also certify compliance with Minnesota's workers' compensation law on form PS2420, and DVS can cancel a license if the required insurance lapses.

Place of business. You need a commercial building on a permanent foundation, connected to local sewer and water or meeting local sanitation codes, adapted for commercial use and zoned commercial. You must own it or lease it for at least one year. It needs office space where records are kept, personnel or an answering service during business hours, posted business hours, floor-to-ceiling walls with a lockable door, a separate outside entrance and its own address. A strip mall or garage can qualify if it has a separate entrance and address. You need a display area, indoors or outdoors, for at least 5 vehicles for your exclusive use, and a sign in contrasting letters readable from the nearest road. Records must be open for inspection at least 4 consecutive hours once a week. A separate license is needed for each county where you have a lot.

Background check. All new and renewing dealers must meet the background check requirement for every owner, officer, board member, governor and 5% or greater shareholder. The Bureau of Criminal Apprehension (BCA) runs a state and FBI fingerprint check: mail fingerprints from a local agency with the consent form (PS2402) and $35, or visit the BCA by appointment and pay $45 ($10 fingerprinting plus $35). A check is valid for one year and is not repeated for on-time renewals. A license must be denied for convictions such as consumer fraud, odometer tampering, receiving or selling stolen vehicles, failure to pay income or sales taxes, or felony fraud offenses, or a dealer license revocation in the past ten years.

Pre-license education. Minnesota does not require a pre-license course for this license.

1. Find a commercially zoned location you own or lease for at least one year, with a commercial building, office space, posted hours, a sign and a display area for at least 5 vehicles.
2. Have your local zoning official complete the Zoning Verification (PS2421), and complete the Commercial Location Checklist (PS2410) and Verification of Property Lease (PS2407) or proof of ownership.
3. Buy a $50,000 surety bond on form PS2446 and liability insurance covering all vehicles held for sale.
4. Have each owner, officer and 5% or greater shareholder complete the BCA fingerprint background check with the consent form (PS2402).
5. Complete the Motor Vehicle Dealer License Application (PS2401). Each person named on it signs before a notary.
6. Mail the application with the workers' compensation certification (PS2420), the dealer plate application (PS2405), copies of each owner's driver's license, your insurance declaration page and the fees to DVS, 445 Minnesota Street, Suite 186, St. Paul, MN 55101.
7. Get your 90-day temporary license, then pass the DVS dealer inspector's site visit to receive the full 12-month license.

Official forms:

• Motor Vehicle Dealer License Application (PS2401)
• Motor Vehicle Dealer License Surety Bond (PS2446)
• Minnesota Vehicle Dealer License Zoning Verification (PS2421)
• Verification of Property Lease (PS2407)
• Minnesota Vehicle Dealer License Commercial Location Checklist (PS2410)
• Demonstration and In-Transit Plate/Sticker Application (PS2405)
• Certification of Compliance with Minnesota's Workers' Compensation Law (PS2420)
• Dealer Background Check Consent (PS2402)
• Dealer Inspection Checklist for Used Dealer

Not for retail sales. A used dealer needs a display area for at least 5 vehicles, but a motor vehicle wholesaler needs only commercial office space owned or leased for at least one year, and wholesalers may sell only to licensed dealers.

Dealer-only auctions sell to licensed dealers, so you need a Minnesota dealer license, such as a used dealer or wholesaler license, to buy there. AuctionACCESS (auctionaccess.com), which handles dealer registration for over 400 auction marketplaces, limits membership to licensed vehicle dealers and their authorized representatives.

Every year. Licenses run 12 months from the month of issue, with staggered expiration dates. Renewal can start on the 15th day of the month before expiration, online through DVS E-Services for business or with a paper renewal application signed by an owner, officer or 5% shareholder. The renewal fee is $150 and the late fee is $100. If the license has been expired for more than 60 days, you must re-apply, get a new 90-day temporary license and complete a new background check.

This is general information, not legal advice. Rules and fees change, so confirm the details with the Minnesota Department of Public Safety, Driver and Vehicle Services (DVS), Dealer Licensing Unit before you apply. Last verified October 20, 2026.

Planning the business side too? Read how to start a car dealership. Used cars you offer for sale need an FTC Buyers Guide in the window. Selling your own car instead? See how to sell a car in Minnesota.