Motor vehicle dealer's license to sell at
retail in Iowa
A $75,000 surety bond must be filed with the Iowa DOT. This can be obtained through your insurance agent or an Iowa licensed bonding company.
Place of business
Establish a place of business separate from any other business that includes:
- An office with a telephone answered and listed in your dealership name where you maintain regular business hours and the public can contact you. Regular business hours are a minimum of 32 hours, Monday through Friday where the office is staffed during these hours. Dealers selling motorcycles exclusively are not required to maintain regular business hours.
- A repair facility with minimum space to repair and recondition one or more motor vehicles with adequate access, equipment and tools for repairing and reconditioning motor vehicles sold by the dealer. The interior walls and ceiling shall separate the repair shop from any area occupied for salesroom, display area or offices by floor-to-ceiling walls and solid, full-length doors. Minimum space for repair to motorcycles and motorized bicycles shall be unobstructed rectangular area measuring no less than 10 feet by 15 feet. Minimum space for repair of other motor vehicles shall be an unobstructed rectangular area measuring no less than14 feet by 24 feet.
A display facility
- A new motor vehicle dealer: A suitable space in a building, at the principal place of business, reserved for display purposes where motor vehicles may be viewed by prospective buyers. Minimum space for display of motorcycles and motorized bicycles shall be 10 feet by 15 feet. Minimum space for display of other vehicles shall be 18 feet by 30 feet.
- Used motor vehicle dealers and new motor vehicle dealers selling new trucks or new motor homes exclusively: A suitable space in a building, at the principal place of business, meeting the requirements for a new motor vehicle dealer or an outside area, at the principal place of business with an all-weather surface which shall be reserved for the display of motorcycles and motorized bicycles shall be 10 feet by 15 feet, exclusive of parking area. Minimum space for display of other vehicles shall be 18 feet by 30 feet, exclusive of parking area. (All weather surface does not include grass or exposed soil.)
Zoning: Written evidence, issued by the office responsible for the enforcement of zoning ordinances in the city, town or county where the place of business is located that states the place of business is in compliance with all applicable zoning provisions.
Corporation: It is your responsibility to ensure the corporation complies with all applicable state requirements for incorporation.
Franchise: If you are dealing in new makes of motor vehicles, you must be enfranchised by the manufacturer or distributor of each make and able to provide a copy of the franchise.
On-site inspection: You will need to contact the Bureau of Investigation & Identity Protection (BIIP) to schedule an appointment for an On-Site Inspection of your facilities. Ensure you are completely compliant with “place of business” requirements, prior to contacting BIIP.
Financial responsibility: It is your responsibility to ensure the dealership is in compliance and has in force financial liability coverage. Financial liability coverage shall be in the limits of not less than $100,000 because of bodily injury to or death of one person, $300,000 because of bodily injury or death of two or more persons in any one accident, and $50,000 because of injury to or destruction of property of others in any one accident.
Used motor vehicle dealer required licensure training: All used motor vehicle dealer license applicants are required to attend an 8 hour prelicensing course prior to licensing. At least one individual associated with the used motor vehicle dealer as an owner, principal, corporate officer, director or member or partner of a limited liability company or limited liability partnership must complete the required education course. The certification is required of all used motor vehicle dealers with the following exceptions.
- Motor vehicle rental companies having a national franchise
- National motor vehicle auction companies
- Wholesale dealer-only auction companies
- Used car dealerships owned by a franchised motor vehicle dealer
- Banks, credit unions and savings and loan associations
Information relating to class schedules, locations and fees can be obtained via the Web at www.iowaiada.com.
Restricted dealer license:
Issued only for the following.
- Selling only those motor vehicles solely through an option to purchase in lease agreements.
- Selling only those vehicles repossessed or acquired by lien, title retention instruments or security contracts.
- Fleet vehicle sale.
- Auction only.
- Insurers selling vehicles of a type subject to registration, solely for the purpose of disposing of vehicles acquired as a result of a damage settlement or recovered stolen vehicles acquired as a result of a loss settlement.
Restricted dealers must have a business location in Iowa. A restricted dealer license does not require a “place of business” as defined in IA Code Chapter 322. Dealer plates are not available.
Extension lot licenses are not issued to restricted dealers.
Leasing: A leasing license is required if you are leasing cars for longer than 60 days. A separate application must be completed and can be obtained from this office.
Vehicle recycler: A vehicle recycler's license is required of a dealer who engages in the business of vehicle salvage, vehicle rebuilder or selling used parts. This does not apply to new car dealers.