Utah's licensing process for vehicle dealers is very easy to follow and this short post will highlight the steps and answer some of the questions about the details of each step.
In particular, you'll learn:
- The importance of carrying your business name through entire application process
- What the difference is between the surety bond requirement and the insurance you need for your dealer plates
- The location requirements so you can pass inspection
The 7 Steps To Have Your Utah Vehicle Dealer License
Before you start this process, you'll have to have your business registered with the Utah Department of Commerce and you'll need your location so you can set it up.
Step 1 - Complete The Vehicle Dealer Application
This is straightforward but there are a few issues we commonly see that cause applications to get denied:
- Make sure your business name is the same as it's registered with the Utah Department of Commerce (This will be a theme for all official documents)
- Ensure to use the legal names for every owner and officer or member
- Make sure each owner signs the application (simple enough but can be harder if ownership is not in the same city or state)
Click here to access the application and other required forms.
Here is the application fee structure for each type of license:
| Application Fee Purpose | Fee Amount |
|---|---|
| New and used vehicle dealers | $127 |
| Special equipment dealers | $127 |
| New and used motorcycle/off road/ small trailer dealers | $51 |
| Dealer plates | $12 per plate - limit of 5 during application |
| Fingerprint card | $30 per person |
Step 2 - Complete The Fingerprint Card And Photos
All owners, members, and/or officers must complete a criminal background check. This includes having physical fingerprint cards completed at a local police station or the Bureau of Criminal Identification.
If an owner has a felony in their past, it's good to fully explain the situation. Anything that shows up on the background report is grounds to deny the application.
Along with the background check you must submit a passport style photo of each owner, manager, and/or officer. The image must be from just below shoulder level and no smaller than a passport size and no larger than 5x7. Include a label identifying each individual.
Step 3 - Complete The 8 Hour Training Seminar
Each owner, member, and/or officer of the business must attend an 8 hour training seminar focused on new dealer compliance.
These are in-person or online seminars covering:
- Up-to-date Federal and state laws for operating a dealership in Utah
- Walk throughs of basic transaction to understand the process and all the forms used
- Plus a detailed breakdown of the forms and why each is required
Make sure you shop around the approved companies that offer this seminar. The prices range pretty wildly and some claim you can take the seminar online.
Some of the businesses recommended by the Vehicle Enforcement Division include:
Step 4 - Secure Your Sales Tax Number
You must register your business with the Utah State Tax Commission and obtain your sales tax number.
This lets your dealership collect sales tax for vehicles and any other merchandise you sell through the dealership.
This becomes important for the next requirement, the vehicle dealer surety bond.
Step 5 - Purchase Your Vehicle Dealer Surety Bond
All vehicle dealers are required to purchase a surety bond before you can submit and have your license issued.
This Utah auto dealer bond is a legal contract the Utah Motor Vehicle Enforcement Division makes you purchase as a personal guarantee that your dealership will:
- Follow all the laws and regulations for operating a dealership in Utah
- Conduct business with your customers using fair and ethical practices
- And pay the correct sales tax for all vehicle and merchandise sold through the dealership
This surety bond is the only tool the state has to hold the businesses they are issuing licenses to accountable to not committing fraud against their customers.
You can learn all of the details of this bond on our [Utah auto dealer bond page](/pillar page), but here are few examples of fraud:
- Stealing money from customer deposits
- Issuing fake vehicle titles or not issuing a title
- Purposefully failing to pay sales taxes to the state
The purpose of the surety bond is to eliminate fraud but also to offer recourse for customers that are victims of fraudulent dealerships. That's why you and every other vehicle dealer is required to purchase one.
Your surety bond must use the official form provided by the Vehicle Enforcement Division and the name on the form must exactly match the name of your business (or DBAs) as registered in the Department of Commerce.
Here are the required bond amounts set by the Utah Motor Vehicle Enforcement Division:
| License Classification | Bond Amount |
|---|---|
| Vehicle dealer licenses | $75,000 |
| Special equipment dealer license | $25,000 |
| Motorcycle, off-road vehicle dealer license | $10,000 |
| Small trailer dealer license | $10,000 |
| Vehicle crusher license | $10,000 |
| Vehicle body shop license | $20,000 |
Step 6 - Meet Dealership Location Requirements
Your dealership must be set up correctly before you submit your application. This includes the following key requirements:
The Dealership Office
Your location needs a physical office that meets local zoning requirements. Typically this means the office must:
- Meet a minimum square footage
- Have functioning restrooms
- Be heated
- Not be a trailer on wheels
Make sure to check the local zoning codes for your specific location.
This office is where all the dealership financial records are stored. And it can't be shared with any other business.
The Dealership Sign
The dealership sign must have the company name on it exactly as it appears on the application.This includes an DBAs. They too, just match exactly as listed on the application which must also match how the business name and any DBAs are registered with the Utah Department of Commerce.
The sign must be legible from the street or entrance in-front of your dealership and it has to be permanently fixed to the ground.
Vehicle Display Area
Your dealership must have enough open space to display at least 3 vehicles. This area must be clearly marked off and only used for displaying vehicles.
Step 7 - Complete Any Dependent Requirements
Franchised Dealers
If you're a franchise dealer, you must include a copy of your franchise agreement.
Dealer Plates
You're allowed to apply for up to 5 dealer plates. If you choose to get dealer plans you must have insurance for these vehicles.
Utah Vehicle Enforcement Division makes it clear that if you don't obtain dealer plates during the application process, and you request them after you've obtained your license, it can take 4 to 6 weeks to get those plates.
Salesperson Licenses
All salespersons require a license. As the owner or member, you are issued an owner license which allows you to sell without having to obtain an official sales person license. So this only applies to employees you hire.
Salesperson licenses require:
- An application with a photo of the applicant in the passport style
- A criminal background check and fee of $31 for this check
- A fee or $31 for the license
Request Pricing For Your Auto Dealer Surety Bond When You're Ready
That is the licensing process. As I've mentioned, it's very straightforward and Utah's process is easier than many states.
When you're ready to obtain pricing for your auto dealer surety bond, w're ready to help you make the process easy, fast, and ensure you pay the lowest price possible.
Make sure you read why pricing can vary so much on our Utah auto dealer bond page.
And when you're ready you can submit a price quote request using our online form or call a bond specialist at 1-800-608-9950.
