How to Get an Indiana Dealer License

Research from the University of Michigan Transportation Research Institute done in 2017 shows that Americans own more cars and drive more miles than they have in over a decade. That’s great news for anyone thinking of opening an Indiana auto dealership because it means demand is especially strong right now. However, entering this booming industry takes more than an enticing vehicle inventory and a flair for sales. You also need to obtain an Indiana motor vehicle dealer license if you expect to sell at least 12 vehicles within a 12-month period. Failure to get a license could subject you to fines, jail time, and being permanently barred from auto sales, so this needs to be your top priority. Satisfy all the state requirements to get your business off the ground by following the steps outlined below:

Step 1 – Check the Most Recent Requirements

The Indiana Secretary of State Auto Dealer Services Division grants motor vehicle licenses and updates the necessary requirements. The information in this post represents the most recent requirements, but it may have been changed since publication. Start the licensure process by checking with the state agency about any rule changes you need to be aware of.

Step 2 – Determine Your License Requirements

Indiana has eight license types that apply to different types of auto sellers:

  • Dealer
  • Manufacturer
  • Converter Manufacturer
  • Distributor
  • Auto Auction
  • Mobility Dealer
  • Watercraft Dealer
  • Transfer Dealer

In addition to determining what license types apply to your business, you need to declare what kind of vehicles you intend to sell:

  • Cars
  • Motorcycles
  • Trucks
  • Trailers
  • Mobile Homes
  • Recreational Vehicles
  • All-Terrain Vehicles (ATVs)
  • Boats
  • Other

The licensure process is essentially the same no matter what type of license you intend to pursue. For example, all dealers need the same type of Indiana auto dealer bond. Regardless, you need to know exactly what kind of dealership you intend to run before pursuing a license.

Step 3 – Submit to a Criminal Background Check

In order to keep unscrupulous dealers out of the industry, Indiana requires anyone pursuing an auto dealer license to submit to an FBI background check. Candidates must schedule an appointment to have their fingerprints scanned at one of the approved facilities located throughout the state.

Step 4 – Get a Registered Retail Merchant Certificate

Any business selling goods (like vehicles) or tangible services in Indiana has to get a registered retail merchant certificate allowing the business to collect sales taxes. The certificate is free to obtain and automatically renews every two years as long as your taxes are paid.

Step 5 – Obtain an Indiana Motor Vehicle Dealer Bond

Bonds hold auto dealers accountable if they don’t follow state laws governing auto sales. Indiana requires dealers to have a $25,000 bond before being granted a license and requires them to renew the bond on an annual basis to keep the license. Fortunately, the actual cost of the bond is a small percentage of the $25,000 total. Viking Bond Service can help you get the bond you need in just 1-2 days while connecting you with the most competitive rates available. To help you understand why bonds are important for both businesses and the consumers they serve, read this article all about Indiana motor vehicle dealer bond.

Step 6 – Provide a Certificate of Insurance

Auto dealers, like most businesses, must have minimum levels of liability insurance to protect anyone who steps foot on their property. The current requirements are as follows:

  • $100,000 for bodily injury to one person.
  • $300,000 per accident
  • $50,000 for property damage.

Step 7 – Meet the Location Requirements

Dealers need to prove they have a permanent place of business before obtaining a license. It cannot be a home, tent, or temporary location. It must also be at least 1,300 sq-ft, have space for at least 10 vehicles, and incorporate adequate lighting and parking, among other requirements. You must provide the state with photos proving your business is already established and meets all the requirements.

Step 8 – Complete the Full Application

Once the previous steps are complete, you’re ready to get started on the full Indiana auto dealer license application. You will be asked to provide information about yourself and your business, along with documentation proving you’ve obtained an Indiana motor vehicle bond, passed a background check, and met all the other applicable requirements. Finally, you have to pay $30 to have your application processed.

Lay the Foundation For Your New Business

It takes a lot to get a car dealership up and running. You need to find the right location, hire mechanics and sales staff, and start connecting with local drivers. Before you do any of that, however, you need to earn a license because your businesses aren’t legal without one. Viking Bond Service is here to help throughout the process. You are welcome to apply for an Indiana auto dealer bond quote at any time without obligating yourself to anything. Until you’re ready to get started, arm yourself with more knowledge. This helpful resource outlines everything business owners need to know about bonds.