How to Start a Used Car Dealership in North Dakota
- 1). Download an Application for Dealer's License from the North Dakota Department of Transportation Motor Vehicle Division website (see Resources).
- 2). Secure a location for your dealership. Before signing a lease or purchase agreement, determine whether your location is appropriate for selling used cars. First, ensure that the location meets the Division of Motor Vehicle requirements. The site, including the display lot and office, must cover at least 2,500 square feet.
Second, determine whether your location is zoned for the operation of a dealership. Zoning regulations vary from city to city; visit your local zoning official for confirmation. - 3). Choose a name and register your business with the North Dakota secretary of state. Procedures vary depending on the legal business structure you choose. The simplest form, sole proprietorship, requires only a trade name registration. More complicated forms, such as a corporation, require significant filings. Visit the North Dakota secretary of state's website to access the appropriate forms and instructions (see Resources).
- 4). Prepare your location according to Motor Vehicle Division standards. Ensure that the office is comfortably heated and lighted. Install standard office equipment, including desks and chairs. Install a filing cabinet to keep your business records onsite. Install a land-line telephone under your business name. Install a permanent business sign of at least 32 square feet. Your business name must be clearly visible on the sign from the street.
- 5). Obtain a federal Employer Identification Number (EIN). Visit the Internal Revenue Service website to do so online. You can skip this step if you do not plan to have employees.
- 6). Register your business for state sales and use taxes. Visit the North Dakota New Business Registration website to download an application (see Resources).
- 7). Obtain garage liability insurance. You can buy such a policy from insurance agencies across the state. Include a copy of the policy with your application.
- 8). Obtain a surety bond in the amount of $25,000. You can buy a bond from surety companies across the state. Include the bond with your application.
- 9). Complete the application and submit it, along with associated documents and fees, to the indicated address. Upon acceptance, an inspector from the Motor Vehicle Division will schedule an inspection of your business location. After you pass inspection, you will be issued license to sell used cars at your dealership.