Minnesota Dealer License Guide 2025: How to Get Licensed for Car Flipping
Unlock your MN dealer license in 2025 with our expert guide: Master bonding, zoning, applications, and quirky rules—perfect for new, used, and flipping dealers.
How to Start Your Minnesota Dealer License Journey
Before you apply for a Minnesota dealer license, there are several key requirements you need to understand and prepare for. This guide walks you through the initial steps of the process.
Minnesota Dealer License Types for Car Flipping & More
The Minnesota Department of Public Safety's Driver and Vehicle Services (DVS) division issues several types of dealer licenses:
- New Vehicle Dealer License: For selling new vehicles directly from manufacturers, requires a franchise agreement.
- Used Vehicle Dealer License: For selling used vehicles only, ideal for flipping cars.
- Wholesale Dealer License: For dealers who sell exclusively to other dealers, no display area required.
- Broker License: For arranging or negotiating vehicle purchases without taking ownership.
- Lessor License: For businesses that lease vehicles to consumers.
- Auction License: For businesses that conduct vehicle auctions.
Basic Requirements for All Dealer Types
- Business Location: A properly zoned commercial location for your dealership.
- Surety Bond: $50,000 bond from an approved surety company.
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Insurance: Liability coverage with minimum limits of:
- $30,000 per person bodily injury
- $60,000 per accident bodily injury
- $10,000 property damage
- Business Registration: Proper business entity registration with the Minnesota Secretary of State.
- Sales Tax Number: Valid Minnesota sales tax number from the Department of Revenue.
- Fees: $100 initial application fee + $150 annual license fee = $250 total (Minn. Stat. 168.27, Subd. 11(h)), $10 for DSB dealers (Subd. 22).
Location Requirements
One of the most challenging aspects covered in our location guide is finding properly zoned commercial space that meets all DVS requirements.
Pro Tip: Many aspiring dealers face challenges with location requirements. DealerLicenseMN offers zoned locations specifically approved for dealer use. View our available locations.
The Application Process
Once you've prepared all the prerequisites, you'll need to navigate the actual application process. Here's a step-by-step breakdown:
Step 1: Gather Required Documentation
Prepare the following documents for your application:
- Completed Dealer License Application (Form PS2400).
- Surety bond certificate ($50,000).
- Proof of liability insurance ($30,000/$60,000/$10,000 limits).
- Business entity documentation (e.g., Articles of Incorporation, Partnership Agreement).
- Federal Employer Identification Number (FEIN).
- Minnesota tax ID number and sales tax permit.
- Zoning verification letter from your local municipality.
- Lease agreement or property deed for your dealership location.
- Photos of your dealership location showing office, sign, and display area (if applicable).
- Commercial Location Checklist (Form PS2410).
- Certification of Compliance with Minnesota Worker's Compensation Law (Form PS2420).
- Demonstration and In-Transit Plate/Sticker Application (Form PS2405).
- Franchise Agreement (Form PS2404, for new car dealers only).
- Certificate of completion for the dealer certification course (required for new vehicle dealers only, optional but recommended for others).
About the Dealer Certification Course
New vehicle dealers must complete a state-approved 8-hour certification course per Minn. Stat. 168.27, Subd. 2a. This course covers state and federal laws regarding vehicle sales, record-keeping practices, title and registration procedures, and consumer protection regulations. While not required for other license types, we recommend it for all dealers.
Step 2: Submit Your Application
Submit your completed application with all supporting documents to:
Driver and Vehicle Services Division
Minnesota Department of Public Safety
445 Minnesota Street, Suite 186
St. Paul, MN 55101-5186
Note: You'll receive a 90-day temporary license upon submission of your complete application per Minn. Stat. 168.27, Subd. 11(b). This allows you to operate while your application is being processed.
Step 3: Site Inspection
After submitting your application, a DVS inspector will visit your dealership location to ensure it meets all requirements. They'll verify:
- Proper zoning.
- Office space functionality with books, records, and personnel.
- Display area (for new and used vehicle dealers, if applicable).
- Permanent signage identifying the business.
- Working telephone with a listed number.
Step 4: License Issuance
If your application is approved and your site inspection passes, you'll receive your dealer license. The license is valid for one year from the month of issuance and must be renewed annually before the 15th of the preceding month.
Important: Missing the renewal deadline requires submitting a completely new application and paying all fees again. Mark your calendar 45 days before expiration to ensure timely renewal.
Pro Tip: Once licensed, you'll want to explore Minnesota auto auctions and establish your dealership location.
Need Help? The application process can be complex and time-consuming. Our team at DealerLicenseMN specializes in guiding clients through every step of the process, ensuring accurate documentation and timely submission.
Weird Rules & Regulations You Should Know
Minnesota's dealer licensing laws contain some surprising and lesser-known requirements that can catch new dealers off guard. Here are some "bet you didn't know" rules that every dealer should be aware of:
The 3-Year Record Retention Rule
Dealers must maintain records of every vehicle transaction for three full years at their established place of business. These records must be organized and available for inspection by DPS representatives or peace officers during business hours. Electronic records are acceptable if readily accessible at your physical location.
No Sunday Sales
It's illegal to sell vehicles or even offer them for sale on Sundays in Minnesota. This old "blue law" is still enforced as a petty misdemeanor.
Listed Phone Number Required
Your dealership must have a phone number listed in a directory under the business name. Mobile or VOIP numbers must be publicly traceable.
Dedicated Display Area
Your vehicle display area can't be a general parking lot shared with other businesses. It must be specifically designated for your dealership's use.
No Unlicensed Flipping
Selling even one vehicle "for resale" without a dealer license can trigger enforcement, even though the law defines a dealer as someone selling 5+ vehicles per year.
Permanent Signage Required
Your dealership sign must be permanent—not a temporary banner or portable sign. It must appear established and fixed in place.
No Home-Based Dealerships
Residential locations are generally not allowed for dealerships. The DVS expects a commercial office separate from living quarters.
Wholesale Dealers: No Public Sales
Wholesale dealer licenses strictly limit you to selling to other licensed dealers—no retail sales to consumers allowed.
Records Open to Inspection
Your sales records must be available for inspection by any peace officer—not just DVS inspectors—without a warrant during business hours.
No License Subleasing
You can't let someone else operate under your dealer license or sublease your location to another dealer without DVS approval.
Zoning Verification Burden
The DVS won't check if your location is properly zoned—you must provide a letter from your local municipality proving it's legal for vehicle sales.
Temporary Plates Have Strict Rules
If you issue temporary license plates, you must follow precise DVS guidelines. Violations can lead to suspension of your plate privileges.
Pro Tip: Many of these lesser-known rules cause problems for new dealers. Our team at DealerLicenseMN can help you navigate these requirements and ensure your dealership stays compliant with all regulations.
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