How to get a dealer license in North Carolina

It is unlawful for a new or used motor vehicle dealer to engage in business in North Carolina without first getting a license (G.S. 20-287). You are a dealer if, for money or other value, you buy, sell, lease at retail, or exchange five or more motor vehicles within any 12 consecutive months, regardless of who owns them, or offer, display, or permit the display for sale of five or more in that time (G.S. 20-286(11)). People selling vehicles they bought and actually used for themselves or their family, in good faith, are excluded.

• Dealer License (used motor vehicle dealer): Selling used motor vehicles from an established salesroom. Requires the 12-hour pre-licensing course and a $50,000 bond.
• Dealer License (new motor vehicle dealer): Selling new, or new and used, motor vehicles. You must show a franchise agreement with the manufacturer or distributor.
• Wholesale Dealer License: Selling or distributing used motor vehicles to motor vehicle dealers. Requires a 96-square-foot established office and a bond.
• Sales Representative License: Each person who sells for a dealer, including a dealer who acts as a salesperson.
• Manufacturer, Distributor, and Factory Branch Licenses: Companies that make, assemble, or import new motor vehicles for distribution, plus distributors and factory branches. Each has its own yearly license fee.

Surety bond. A corporate surety bond or cash bond (or fixed value equivalent) of $50,000 for the first established salesroom and $25,000 for each additional one (G.S. 20-288(e)). Use form ISU-409 with the surety's power of attorney. Dealers who sell only trailers with an empty weight of 4,000 pounds or less can file the bond exemption certification (ISU-406). Manufactured home dealers bonded under G.S. 143-143.12 are also exempt.

Insurance. You need a garage liability policy (Garage Liability Coverage Form with Automobile Dealer Supplementary Schedule) or a comprehensive liability policy that covers your dealer plates. The certificate must show how many dealer plates are covered and list NCSHP Dealer Section, 3129 Mail Service Center, Raleigh NC 27697 as certificate holder (ISU-415). Dealer plates may be used only on vehicles covered by liability insurance that meets state financial responsibility law (G.S. 20-79(d)).

Place of business. Retail dealers need an established salesroom with at least 96 square feet of floor space in a permanent enclosed building and a sign showing the trade name in block letters at least 3 inches high on a contrasting background. It must be a place where you carry on the business in good faith, where the public can reach you at reasonable times, and where you keep required records. The salesroom includes the area next to it or within 500 feet, and tents or temporary stands do not count (G.S. 20-286(6)). State rules say a building on wheels is not permanent and the salesroom must be separate from living quarters (19A NCAC 03D .0216). You need written zoning approval, a physical street address (a PO box only in the same city), and an inspection and approval by an NCSHP Investigative Services Unit officer before the license is issued. Wholesalers need a 96-square-foot established office where records are kept.

Background check. North Carolina does not fingerprint dealer applicants; the law bars the Division from requiring fingerprints for a criminal history check (G.S. 20-288(b)). The application asks whether owners, partners, members, or officers were convicted within 5 years of an offense under G.S. 14-71.2, 20-106.1, 14-160.4, or 20-112, have other convictions related to the license duties or that are violent or sexual, or had a dealer license denied, suspended, or revoked. The Division weighs factors such as the seriousness and date of the crime and the applicant's rehabilitation and employment records, and may deny a license on the grounds in G.S. 20-294.

Pre-license education. Required (12 hours). Approved courses and details.

1. Register your corporation or LLC with the NC Secretary of State (out-of-state companies need a Certificate of Authority), and file any assumed business name with the county Register of Deeds.
2. Complete a 12-hour pre-licensing course approved by the Division within 12 months before you apply.
3. Find a location with a 96-square-foot established salesroom and a trade-name sign with 3-inch letters, and get a written zoning approval letter.
4. Request a site inspection through the NCSHP Investigative Services Unit portal (Request A Service, then Other) and upload your zoning letter. The site must be approved before you apply.
5. Buy a $50,000 surety bond on form ISU-409 with the surety's power of attorney, and get garage liability insurance that covers your dealer plates.
6. Complete form ISU-400 (notarized), form ISU-405 for dealer plates, and form ISU-426 (notarized) for each sales representative, including yourself if you will sell.
7. Mail the original forms and fees, payable to the NC Division of Motor Vehicles, to the NCSHP Dealer Section, 3129 Mail Service Center, Raleigh, NC 27697-3129, or go to the Raleigh or Huntersville office.

Official forms:

• Application for New Dealer License or Changes to Existing License (ISU-400)
• Application for Dealer Plates (ISU-405)
• Motor Vehicle Dealer Surety Bond (ISU-409)
• Application for Sales Representative License (ISU-426)
• Minimum Dealer License Requirements (ISU-415)
• Renewal Application for Dealer License and Plates (ISU-403)
• New Dealer Packet

North Carolina does not require a car lot or a minimum display area. A retail dealer needs a 96-square-foot established salesroom with a sign, and a wholesaler, which sells used vehicles to dealers, needs a 96-square-foot established office where records are kept.

North Carolina's dealer licensing documents do not address auction access. Dealer-only auctions are for licensed dealers, and AuctionACCESS (auctionaccess.com) restricts membership to licensed vehicle dealers and their authorized representatives.

Licenses are issued for two years with staggered expiration dates (G.S. 20-288(c)). Renew with form ISU-403, paying the yearly license fee times 2 years plus plate fees on ISU-405. Used dealers must show one 6-hour continuing education course for each year of the license period. If you file before expiration, the license stays valid up to 60 days after expiration while the renewal is reviewed (G.S. 20-295(b)). A $15 late fee per plate starts the first day of the month after expiration, and if you do not renew within one month after expiration you must file a new dealer application. Dealer plates must be replaced every four years.

This is general information, not legal advice. Rules and fees change, so confirm the details with the North Carolina State Highway Patrol, Investigative Services Unit, Dealer Section 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 North Carolina.