Virginia Motor Vehicle Dealer License Guide

The Virginia Motor Vehicle Dealer License is a legal authorization granted by the Virginia Department of Motor Vehicles (DMV) to individuals or entities engaged in buying, selling, or dealing motor vehicles in the state. If you sell more than 4 cars within a calendar year, then you will need to register as an auto dealer. An auto dealer license is required to operate a dealership and conduct vehicle transactions legally within Virginia and ensures compliance with state laws and regulations related to the automotive industry.

Two Types of Dealers

There are two types of dealers in the state of Virginia: franchise and independent dealers.

Franchise dealers are dealers that have the following characteristics:

  • Have franchise agreements with licensed manufacturers or distributors to sell new motor vehicles
  • Sell used motor vehicles under the trademark or distributor

Independent dealers are dealers that sell exclusively used motor vehicles. 

The difference between independent dealers and franchise dealers when it comes to used vehicles is that independent dealers sell any brand of used vehicles, while franchise dealers will only sell used vehicles of the brand they have a franchise agreement with. For example, franchise dealers that have a franchise agreement with Toyota, they will only sell used vehicles that are also Toyotas. 

Step 1: Register your business

The first step is to register your business. Obtaining a motor vehicle dealer license requires your dealership to be a legally recognized entity. In the state of Virginia, dealerships are typically four business types: sole proprietorship, partnership, limited liability company (LLC), and corporation. Below we will go into more detail about each business type.

Sole proprietorship

A sole proprietorship is when you are the sole owner of your business. There is, therefore, no distinction between your personal assets and the business’s. In Virginia, you can establish a sole proprietorship without registering your business to any type of legal entity. However, there are a few circumstances where you must file legal documents with the Virginia state government. 

The first scenario is if you need to file a fictitious name for your business. A fictitious name is a name that’s different from your business’s legal name. Typically, a sole proprietorship’s legal name would you the owner’s name. However, there may be times when a fictitious name may be helpful for your business’s brand. You can file your fictitious name online or by mail. To file online, make an account with the Virginia State Corporation Commission’s (SCC) Clerk’s Information System (CIS). After you make an account, you can begin the filing process. You can pay your filing fee of $10 via credit card or another electronic form of payment. To file by mail, download and complete the Certificate of Assumed or Fictitious Name - Individual. Mail the form to the following address:

State Corporation Commission
Clerk’s Office
P.O. Box 1197
Richmond, VA 23218

You can also choose to deliver the form to the following address:

Courier Delivery Address
1300 E. Main St, 1st floor
Richmond, VA 23219

Mail or bring a $10 check payable to State Corporation Commission. 

The second scenario for need to file documents is if you wish have employees. If you have employees other than yourself, you must obtain an EIN. EIN stands for Employee Identification Number and is a 9-digit number issued by the IRS to report employee wages. Apply for an EIN on the offical IRS webpage


A partnership is a type of business structure in which two or more individuals or entities come together to form and operate a business. In a partnership, the partners share the responsibilities, profits, losses, and liabilities of the business. There are two types of partnerships: limited partnerships and general partnerships.

A limited partnership (LP) is a business structure that consists of two types of partners: general partners and limited partners. General partners manage the business and have unlimited personal liability for its debts. Limited partners are passive investors who contribute capital and have limited liability, only risking the amount they invest. Limited partnerships offer a flexible management structure and pass-through taxation, making them suitable for ventures where some partners want active involvement and others prefer a more hands-off, protected investment role. To become a LP, you must file the Certificate of Limited Partnership and pay $100. You can either file online or download and complete the physical form. You can mail the form to:

State Corporation Commission Clerk’s Office
P.O. Box 1197
Richmond, VA 23218

You can also choose to deliver the completed form to the following address:

Courier Delivery Address
1300 E. Main St, 1st floor
Richmond, VA 23219

A general partnership is a business structure where two or more individuals or entities join together to run a business. All partners share equal responsibility for managing the business, and they have unlimited personal liability for the company's debts and obligations. General partnerships often have pass-through taxation, where the profits and losses are passed through to the individual partners' personal tax returns. This type of partnership is suitable for small businesses or professional practices where the partners want to share responsibilities and have a direct say in the business's operations. To become a general partnership, the process is similar to that of a LP. You can either file online or mail the physical Statement of Partnership Authority same address above for limited partnerships.

For any method you choose, you must provide a payment of $25.


A Limited Liability Company (LLC) is a business structure that provides its owners, known as members, with limited liability protection. This means that the personal assets of the members are typically separate from the company's debts and obligations. LLCs offer the advantage of pass-through taxation, where profits and losses are reported on the individual members' tax returns, avoiding double taxation. The setup and maintenance of an LLC are relatively straightforward, and it offers flexibility in management, allowing members to manage the business themselves or appoint managers. Due to its liability protection and tax benefits, an LLC is a popular choice for entrepreneurs, small businesses, and startups seeking a simple yet advantageous business structure. 

As an LLC, you are required to file the Articles of Organization. To do so online, follow the step-by-step instructions below:

  1. Make an account with the Clerk’s Information System (CIS) website
  2. Click “Online Services.”
  3. Under “Business Entities,” click the section called “New Businesses.” 
  4. Select “Virginia Entity,” then “Limited Liability Company” for business type. Then, click “Articles of Organization” from the drop-down menu.
  5. Continue, and then click “Yes” or “No” for the question: “Do you have a name reserved?” Depending on which answer you choose, your next few questions will vary. Continue along with those questions. 
  6. At the end of the application, your information will have been uploaded onto an Articles of Organization document.
  7. Click “Add to Shopping Cart” and then “Checkout.”
  8. You will be shown a confirmation screen once all payments and information have been entered. 

To file a physical copy, download and complete the Articles of Organization form. You can either mail this form to the following address: P.O. Box 1197, Richmond, VA 23218-1197. Or deliver to 1300 East Main Street, Tyler Buildiing, 1st Floor, Richmond, VA 23219.

The filing fee for an LLC is $100. 


A corporation is a legal entity separate from its owners, known as shareholders, created by filing articles of incorporation. It offers limited liability protection to shareholders, meaning their personal assets are typically shielded from the company's debts and liabilities. Corporations have a centralized management structure with a board of directors overseeing major decisions and officers handling day-to-day operations, making them an attractive choice for businesses seeking liability protection and scalability.

There are two types of corporations in Virginia: stock corporations and nonstock corporations. In Virginia, a stock corporation is a type of business entity where ownership is represented by shares of stock. Shareholders of a stock corporation have ownership rights and can buy or sell shares, and the corporation can raise capital by issuing additional shares to investors. In Virginia, a nonstock corporation is a type of nonprofit organization that does not have shareholders or issue stock. Nonstock corporations are typically formed for charitable, educational, religious, or social purposes and are governed by a board of directors or trustees.

You must file Articles of Incorporation for both types of corporations. You can file for these on the official CIS website. You can also download and submit physical copies of Articles of Incorporation of a Virginia Stock Corporation and Articles of Incorporation of a Virginia Nonstock Corporation. Mail these forms to P.O. Box 1197, Richmond, VA 23218-1197 or deliver them to 1300 East Main Street, 1st Floor, Richmond, VA 23219. 

Step 2: Establish a permanent dealership location that follows all zoning regulations

The next step is to establish a permanent location for your business that follows all zoning regulations of your local government. You must make sure your established place of business follows the below conditions: 

  1. Satisfies all zoning regulations of your local jurisdiction. You can find these on the official websites of your county government. For example, Fairfax County publishes their most current zoning ordinances on their website
  2. Has sales, service, and office space of at least 250 square feet that are exclusively used by the dealership
  3. Located in a non-residential building
  4. Keeps all dealer records on the premises of the business location and preserved in original form, in film, or on a computerized record-keeping system for five years 
  5. Has a desk, chairs, filing space, telephone, working utilities (electricity, heating, etc.), and internet connection
  6. Displays hours of operation which are required to be between 9am and 5pm
  7. Displays a permanent sign that is visible from the front of the office and contains the dealership’s trade name in letters that are at least six inches tall
  8. Have a display lot that can park at least 10 vehicles

Step 3: Complete pre-licensing education for dealer-operators

The Virginia Motor Vehicle Dealer Board (MVDB) requires dealerships to have at least one qualified dealer-operator on the premises. 

To become a franchise dealer-operator, you must:

  1. Take the Franchise Dealer-Operator Qualification Test. You can study using practice quizzes, salesperson study guides, and dealer-operator study guides.
  2. Complete the Dealer-Operator/Salesperson Qualification Test Application. Bring the completed application to the DMV Customer Service Center you will be taking the test at.
  3. Go to any DMV Customer Service Center in Virginia to take the exam. There will be a $50 exam fee. If you do not pass, you can retake the exam the same day or another day. You will pay another $50 to retake the exam.
  4. If you pass, you must fill out the Salesperson License Application, and have it signed by the dealership representative and/or application for your dealership. Submit this application with the rest of your license application.

To become an independent dealer-operator, you must:

  1. Register of the 2-day Independent Dealer-Operator Course. Find locations and fees on the Training Course Listing webpage. The course covers the primary responsibilities of this job as well as basic of motor vehicle laws and regulations.
  2. Prepare for the Independent Dealer-Operator exam through salesperson study guides, dealer-operator study guides, and practice quizzes.
  3. Bring your completed Dealer-Operator/Salesperson License Qualification Test Application to exam day.
  4. Take the Independent Dealer-Operator exam at any DMV center. If you do not pass, the process would be the same the franchise dealer-operator exam.

After you pass, fill out the Salesperson License Application, and have it signed by the dealership representative and/or application for your dealership. Submit this application with the rest of your license materials.

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Step 4: Obtain a Virginia auto dealer bond

As part of the licensing process, you must obtain a $50,000 auto dealer bond as well as liability insurance. 

The Virginia Auto Dealer Bond is a requirement for motor vehicle dealers. It serves to ensure that auto dealers fulfill their legal obligations to the state and their professional duties to their clients. This surety bond provides financial protection for customers of the auto dealers. For instance, if a dealer sells a car without a valid title, the consumer can make a claim against the dealer's auto dealer bond. 

If your dealership wishes to be a part of the Virginia Motor Vehicle Transaction Recovery Fund, you must submit a dealer bond of $100,000 instead. Joining the recovery fund is a helpful tool to build trust with potential customers. 

The Virginia Motor Vehicle Transaction Recovery Fund exists to provide compensation to individuals who have experienced loss or damage while purchasing or leasing a motor vehicle. This reimbursement is available for those affected by unlawful actions committed by licensed or registered motor vehicle dealers or salespersons. The fund serves as a safety net for consumers, ensuring that they can seek recourse and financial restitution in cases of fraudulent or illegal behavior within the automotive industry in Virginia.

You must obtain your surety bond at a maximum of 30 days before you submit your license application. The bond also must be maintained for the first 3 years of your dealership. 

Step 5: Purchase liability insurance

Liability insurance for auto dealers is a type of insurance that provides coverage for the legal and financial liabilities faced by auto dealerships. It protects dealerships from claims and lawsuits arising from accidents, injuries, or property damage that may occur on their premises or as a result of their operations. This insurance also helps cover legal defense costs and settlements if the dealership is found liable for damages. Liability insurance is essential for auto dealers to safeguard their assets, reputation, and financial well-being in case of unforeseen events or accidents related to their business activities. Every dealer plate your business owns must be insured. There is no required minimum amount of insurance, so you must come up with a reasonable amount with your insurance company. We recommend using Next Insurance (not affiliated) for your general liability insurance needs. 

Step 6: Complete all required licensing forms

The next step is to complete and consolidate all required licensing forms:

Bond application - No need to complete this application. If you get a bond from us, we’ll file this for you.

Dealer plate application - This application must be completed in order to obtain dealer license plates. You are allowed to have four plates per salesperson and are required to have at least two plates. 

Dealer license application - The license application requires you to provide the following information:

  1. Bond amount 
  2. Type of application (initial, renewal, or changes)
  3. Type of dealer license 
  4. Business specific information (address, hours of operation, etc.)
  5. Business type
  6. Personal information of owner(s), member(s), partner(s), and/or officer(s) of business
  7. Copy of franchise agreement (franchise dealers only)
  8. Criminal background check

Zoning compliance certification: To obtain your zoning compliance certification, you must apply for a zoning permit on the official website of your local government. For example, in the city of Richmond, you can apply for your certificate of zoning compliance on their Online Permit Portal. Obtain this certificate within 30 days of submitting your license application. 

Salesperson license application/Request for criminal background check: The completion of this application licenses each salesperson in your business as well as consents a criminal history check for them. Fill one out for each salesperson in your dealership. 

Copy of Buyer’s Order: A purchase order, also known as a buyer's order, is a formal document issued by a dealer to a lender. It contains essential information related to the transaction, including the Vehicle Identification Number (VIN), current mileage, sticker price, taxes, fees, and the total bottom line pricing. This document serves as an official record of the agreement between the dealer and the lender, ensuring transparency and clarity in the purchase or financing process.

Step 7: Pay all required fees and submit your application

The next step is to submit all your completed forms and applications. Along with these documents, you must mail checks to the Virginia Department of Motor Vehicles. The necessary fees include the following: 

  • Dealer certificate: $270
  • Each additional license type: $50
  • Motor Vehicle Transaction Recovery Fund: $350 annually for first 3 years
  • First 2 dealer plates: $60
  • Each addition dealer plates: $26
  • Each salesperson license: $50

Make your checks payable to Virginia Motor Vehhicle Dealer Board and mail them along with your required licensing documents any DMV customer service center or to the main DMV office:

Virginia Department of Motor Vehicles
P.O. Box 27412
Richmond, VA 23269

Step 8: Schedule an appointment for a Field Representative visit

After submitting your application, your license will be processed and mailed to your assigned Field Representative. Your Field Representative will then contact you to set up an appointment to visit your dealership. Below we’ve listed important requirements you should make sure your dealership follows before your representative arrives at your business.

Applicant requirements:

  • Have a $50,000 surety bond 
  • Have a qualified dealer-operator and licensed salesperson

Location requirements:

  • Have a sign with lettering that is at least 6 inches tall
  • If you have processing fees (i.e. surchargers or convenience fees for credit cards), have a sign that is 8 ½ by 11 inches
  • Post a listing of all salesperson’s names visible to all customers
  • Have a hours of operation sign near the entrance of the business
  • Cannot be a residential building
  • Own or lease the building you’re operating in
  • Have your certificate of zoning 
  • Have a permanently enclosed office space that is at least 250 square feet and exclusively used for the dealership

Operations requirements:

  • Print a buyer’s order that shows the dealership name, address, and telephone number
  • Be open at least 20 hours a week with 10 of those hours between the hours between 9am and 5pm, Monday through Friday
  • Keep dealer records available for inspection during business hours

Dealership employee requirements:

  • Each dealership salesperson must be licensed and employed by the dealership

If you dealership passes the inspection, the Field Representative will deliver all license documents to the Motor Vehicle Dealer Board, and you will be open for business!

How to Renew your Virginia Motor Vehicle Dealer License

Your license expires after one year of its issuance. For example, if your license was issued on November 1, 2022, then your license expires on November 1, 2023. You must renew your license 30 days before the expiration date. 

To do so, you will use the same license application you filled out to apply for the initial license. Instead, you will check the “RENEWAL APPLICATION.” This application as well as other necessary documents will be mailed to you in a consolidated renewal packet. If you have not received the packet within 30 days of your expiration date, you should contact the Virginia Motor Vehicle Dealer Board (MVDB). The MVDB’s email address is and their fax number is 804-367-1053. When contacting the MVDB via any method, provide the following information:

  1. Certificate License Number
  2. Your Name
  3. Dealership name
  4. Valid email address and contact phone number

If you are late to renewing your license, there will be a late renewal fee of 50% of your dealer and salesperson license fees. Renewal applications received more than 30 days after your expiration date will be reviewed as initial applications. This means it will be like re-applying for your license. You will need to go through the exact same process a second time.