Utah Auto Dealer License and Bond

How a claim on the bond works

A claim is paid only after a waiting period. A surety or principal may not pay any claimant until six months have passed from the date the first written claim on the bond was filed. If valid claims together exceed the bond amount, the proceeds are distributed pro rata among the valid claimants. To preserve a claim, the claimant files it in writing with the administrator within one year after the cause of action arose, and any lawsuit must begin within two years after the claim was filed. A claimant is awarded attorney fees in cases successfully prosecuted or settled against the surety or principal if the bond has not been depleted.

If you lose possession of the required bond, your license is automatically suspended, and you cannot use your licenses or plates until the required bond is on file with the administrator and your license is reinstated. Operating without a bond in effect is also a ground for suspension or revocation. Under Section 41-3-701, violating the chapter is a class B misdemeanor, and acting as a dealer without a license is a class A misdemeanor.

Fees

License fees are determined by the commission, not fixed in the code. On the MVED page, a new or used motor vehicle dealer license is $127, and a new or used motorcycle, OHV, or small trailer dealer license is $51. Each owner, partner, or corporate officer pays $30 for a BCI fingerprint check. What you pay is a share of the bond amount, set by the surety from your credit and finances.

Your principal place of business and extra locations

The administrator cannot issue a dealer license to an applicant who does not have a principal place of business. Your location needs a permanent sign of at least 24 square feet. A dealer must obtain a supplemental license for each additional place of business. To get a supplemental license for an additional place of business, you must be bonded under Section 41-3-205. For a used motor vehicle dealer, a supplemental license for a permanent additional place of business also requires that the dealer independently satisfy the bond requirements for that location.

Steps

1. Confirm you need a license. If you sell, display, or offer three or more motor vehicles or off-highway vehicles in any 12-month period, you must be licensed by MVED.
2. File the application. Complete and sign Form TC-301, the Bonded Motor Vehicle Business Application.
3. Get your bond. Have your surety fill out Form TC-450 for your license type's amount, and sign it in front of a notary.
4. Get a sales tax number. Secure a sales tax number for the dealership from the Utah State Tax Commission.
5. Submit fingerprints. Each owner, partner, or corporate officer submits fingerprints for a background check.
6. Pass the site inspection. After you submit the packet, MVED allows five to ten working days for a site inspection, then issues your license within three to five working days once the site passes.

Sources

• Utah Code Title 41, Chapter 3 (§ 41-3-205), Utah Legislature
• Utah MVED, Dealer License overview
• Utah MVED home
• Form TC-450, Bond of Motor Vehicle Dealer, Crusher or Body Shop

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