Selling used cars in Maryland, whether you’re starting a new dealership or expanding an existing one, requires navigating specific legal pathways to ensure compliance and legitimacy. This guide, provided by cardiagnosticnearme.com, your trusted automotive repair experts, will walk you through the critical steps of obtaining and maintaining your used vehicle dealer license from the Maryland Motor Vehicle Administration (MVA). Understanding these procedures is crucial for anyone looking to professionally Sell Used Cars in Maryland.
Starting Your Used Car Dealership: Obtaining a New License
The first step to legally sell used cars in Maryland is securing a used vehicle dealer license. The MVA provides a comprehensive Used Vehicle Dealer Licensing Packet which contains all necessary forms and detailed instructions. This packet is your starting point and can be downloaded directly from the MVA website. It’s essential to prepare a complete application, as incomplete submissions will not be processed.
To apply for your initial license, you must mail the following documents to the MVA’s Business Licensing and Compliance division:
- Application for Vehicle Dealer’s License: This form is the core of your application. Ensure it is fully completed, signed, and dated by all dealership principals, including officers, partners, or owners. Crucially, include your Federal Employer Identification Number (FEIN) and the Social Security Numbers of all listed individuals.
- Zoning Approval Form: Compliance with local zoning laws is mandatory. This form requires the signature of a zoning official from the jurisdiction where your dealership will operate, confirming the property is appropriately zoned for a used vehicle dealership.
- Surety Bond of Vehicle or Trailer Dealer: This serves as your insurance coverage proof. The form must accurately reflect the full dealership name, including any “trading as” names, and must be signed by all officers, partners, and/or owners exactly as they appear on the application. The bonding company must affix its Seal of Surety and have a representative sign the form.
- Power of Attorney: This form will be provided by your surety bond company and needs to be included in your application packet.
- Criminal Background Check: To ensure consumer protection, Maryland requires criminal background checks for all officers, partners, owners (licensees), and anyone with a financial interest in the dealership. If any of these individuals reside outside Maryland or have lived in Maryland for less than a year, a criminal background check from their current/former state of residence is also required. Background checks from private companies are acceptable only if the company is licensed by the Maryland State Police as a Private Investigation Agency.
- Trader’s License (copy): Obtain this license from the Circuit Court in the jurisdiction where your dealership is located. This is a fundamental business license required to sell used cars.
- Business Registration Letter: Verify your dealership’s legal standing to operate in Maryland by obtaining a Business Registration Letter from the Maryland State Department of Assessments and Taxation (SDAT). Registration with SDAT is mandatory for all dealer applicants, even those based out-of-state. Register both corporate and trading names. A printout from the SDAT website is acceptable proof.
- Automotive Repair Facility Contract: Certify that you have access to a repair facility within 5 miles of each dealership location using this form. This ensures that vehicles sold are properly serviced and maintained.
- Insurance Information Form: Confirm your vehicle liability insurance coverage for the vehicles you will be selling and, if applicable, Workman’s Compensation insurance for your employees.
Alt: Used Vehicle Dealer Licensing Packet form example, highlighting application forms required to sell used cars in Maryland.
Depending on your specific situation, you might also need to include:
- Letter of Good Standing: If your dealership is already licensed in another state and you are opening a Maryland location, obtain this letter from the Maryland Department of Assessments and Taxation to confirm your business is operating legally and compliantly.
- Use and Occupancy Permit: Required if you plan to use a trailer as an office or if mandated by local zoning regulations.
- Dealer Orientation Request: The MVA strongly encourages new dealers to participate in an orientation session to understand regulations and best practices.
Before licensing approval, an MVA investigator will conduct a site inspection of your business location to ensure compliance with the Maryland Code of Regulations (COMAR). Schedule your inspection by contacting the MVA Investigation Division. The investigator will provide a Business Site Inspection Receipt upon completion, which must be submitted with your application.
Once your application is approved, the Business Licensing and Compliance division will contact you regarding payment, license issuance, your complimentary salesman’s license, dealer tags for test drives, and other essential operational items for your used car dealership.
Expanding Your Used Car Business: Licensing Additional Locations
For established dealerships looking to sell used cars at additional locations, a separate authorization from the MVA is required. Similar to the initial license, you’ll need to download the Used Vehicle Dealer Licensing Packet for the necessary forms and instructions. Submit the following information to the Business Licensing and Compliance division:
- Application for Wholesale Vehicle Dealer’s License: Complete and submit this form, ensuring it’s signed and dated by all dealership and corporate officers.
- Zoning Approval Form: Secure zoning approval for the new location from the relevant jurisdiction, confirming it’s zoned for a used vehicle dealership.
- Proof of Workers Compensation coverage or exemption: Provide proof of Workers’ Compensation insurance or documentation of exemption. Contact the Workers’ Compensation Office for exemption details and forms if applicable.
- Trader’s License (copy): Obtain a Trader’s License for the new location from the Circuit Court in that jurisdiction.
- Automotive Repair Facility Contract: Certify access to a repair facility within 5 miles of the new sales location.
- Insurance Information Form: Confirm vehicle liability and, if needed, Workman’s Compensation insurance coverage for the expanded operations.
Alt: Exterior view of a used car dealership lot, showcasing vehicles for sale and dealership signage, relevant to expanding used car sales operations.
Depending on your circumstances, additional forms may include:
- Rider to the Surety Bond of Vehicle or Trailer Dealer: A rider to your existing surety bond or a new bond may be needed if the bond amount or other details have changed due to the expansion.
- Power of Attorney: Required only if submitting a rider or new Surety Bond.
- Criminal background check: A new background check is necessary if the existing one is over five years old.
- Business registration letter: If the new location operates under a different trading name, provide proof of registration for that name with the Maryland Department of Assessments and Taxation (SDAT).
- Use and Occupancy Permit: Required if using a trailer as an office at the new location and mandated by local zoning.
Just like with a new license, an MVA investigator will inspect the new location before approval. Contact the MVA Investigation Division to schedule this site inspection. Upon successful inspection, you’ll receive a Business Site Inspection Receipt to include with your application. Once approved, the Business Licensing and Compliance division will guide you through payment and obtaining the necessary licenses and tags for your additional location.
Renewing Your Used Car Dealer License and Dealer Tags
To continuously sell used cars legally, license renewal is essential. The Business Licensing and Compliance division will mail a renewal packet roughly 60 days before your license expiration date. If you don’t receive it, proactively contact the division.
Submit the completed Business License Renewal form, applicable fees, and the following documents at least 15 working days before your license expires. Failure to renew on time may lead the MVA to assume your dealership is ceasing operations.
- Business License Renewal form
- Copies of flag releases: Any outstanding flags will be detailed in your renewal packet and require resolution.
- Surety Bond rider: Required only if there have been changes to your Surety Bond.
- Power of Attorney: Needed only when submitting a rider or a new Surety Bond.
- Explanation of MVA administrative actions: Provide a written statement if there are any pending or past administrative actions against your dealership.
- Notice of criminal convictions: Disclose any criminal convictions of owners, officers, or individuals with financial interests in the dealership in a written statement.
Upon approval, the Business Licensing and Compliance division will mail your renewed dealer’s license and interchangeable (dealer) tag renewal forms. Interchangeable tag renewal forms (form #VR-1B) can be collected in person at the division counter if renewal is fully processed and without administrative issues.
Updating Your License: Business Changes and Corrections
Maryland law mandates reporting any changes affecting your dealership license to the MVA within 30 days of the change. This includes changes to your business name, address, or dealership officers.
If changes occur during your renewal period, you can indicate them on the Business License Renewal form. Otherwise, contact the Business Licensing and Compliance division by phone or mail to report changes.
The division will send a packet of forms and instructions specific to the type of change you need to make. Required documents vary depending on the nature of the change. Once your change request is approved, you will receive a new dealer’s license, salesman license, and/or corrected registration cards for your dealer tags.
For correcting inaccuracies on your used vehicle dealer license, salesman license, or dealer tag registration cards, promptly contact the Business Licensing and Compliance division by phone or mail. They will provide the necessary forms and instructions for correction requests. Upon approval, corrected documents will be mailed to you. Note that some corrections, like a phone number update, may not require document reprinting.
Obtaining Duplicate Licenses and MVA Forms
In case you need a duplicate dealer’s license, contact the Business Licensing and Compliance division by mail or in person to request an Application for Duplicate Vehicle Dealer’s and/or Salesperson’s License. Written requests on company letterhead with the appropriate fee are accepted for duplicate dealer licenses. Once approved, the duplicate license will be mailed to you.
To order MVA forms necessary for dealership operations, contact the MVA’s Warehouse. Advance ordering is recommended. Submit your request via email or fax on company letterhead, including:
- Company address
- Phone number
- Contact person
- Dealer license number
- Form number(s) requested
- Form title(s)
- Quantity requested
- Pickup or delivery preference
For pickups, specify your preferred date and time. Deliveries are made via UPS and cannot be sent to P.O. boxes. The MVA Warehouse will notify you of any form availability issues and fulfill your order when forms are in stock, without requiring resubmission.
Closing Your Used Car Dealership
If you decide to cease operations and no longer sell used cars, inform the Business Licensing and Compliance division. They will advise you on the materials that must be returned to the MVA, as these are considered State properties. Typically, you must return:
- Used Vehicle Dealer License (wall license)
- Vehicle Sales License – Owner (gratis salesman license)
- Interchangeable tags: Return all tags to an MVA branch office and submit the return receipts to the Business Licensing and Compliance division.
- Unused Temporary Registration Permits: Account for and return all unused permits. Submit a statement detailing any missing items.
- Unused MVA Odometer Disclosure forms: Account for and return all unused forms. Submit a statement detailing any missing items.
- Unused Dealer’s Bill of Sale and/or Reassignment for New and Used Vehicles: Account for and return all unused forms. Submit a statement detailing any missing items.
- Paid Salesman Licenses: Return all salesman licenses issued by the MVA if you employed salesmen.
Alt: Image representing dealership closure, possibly showing keys being returned or a closed sign, symbolizing the end of used car selling operations.
Contact Information
For any queries or to initiate any of the processes mentioned, reach out to the MVA Business Licensing and Compliance division:
MVABusiness Licensing and Compliance division
6601 Ritchie Highway, N.E.
Glen Burnie, MD 21062
Email: [email protected]
MVA Warehouse (for form orders)
150 Blades Lane, Suite H
Glen Burnie, MD 21061
Hours: Monday – Friday (8am to 4pm)
Email: [email protected]
For telephone inquiries:
MVA Customer Service Center: 1-410-768-7000
TTY/Hearing Impaired: 1-301-729-4563
By following these guidelines, you can confidently navigate the process of legally selling used cars in Maryland, ensuring a smooth and compliant operation for your dealership.
