Getting a used car dealer license in Iowa

In Iowa, used-car dealers are licensed by Iowa DOT Motor Vehicle Division, Dealer Programs.

Before your first retail sale you’ll need a $75,000 surety bond, a pre-licensing course and a business location that meets the state’s rules. The state also inspects the location.

This page gathers what a new independent lot needs, each fact linked to the official source it came from.

Sources checked · details re-checked against official sources

At a glance

License
Motor vehicle dealer, used retail iowadot.gov (source, opens in a new tab)
Issued by
Iowa DOT Motor Vehicle Division, Dealer Programs iowadot.gov (source, opens in a new tab)
Surety bond
$75,000 surety bond. iowadot.gov (source, opens in a new tab) That’s the bond’s face amount, not what you pay: a surety company charges a yearly premium, usually a small percentage of it, set mainly by your credit.
Pre-licensing course
Eight-hour pre-license course through Iowa Independent Automobile Dealers Association; at least one qualifying owner/principal/officer/member/partner attends before applying. iowadot.gov (source, opens in a new tab)
Official fees
Dealer license $70. Dealer plates are optional; if you order them, a $70 registration fee plus $40 per plate. Each extension lot $20. iowadot.forms.govos.com (source, opens in a new tab)
Renewal
Renew before end of expiration month; CE required or renewal denied. iowadot.gov (source, opens in a new tab)
Site inspection
Yes: contact Bureau of Investigation & Identity Protection for on-site inspection when site is fully compliant. iowadot.gov (source, opens in a new tab)

Step by step

  1. Make sure you need a dealer license

    Iowa DOT's Motor Vehicle Division licenses used retail motor vehicle dealers. A restricted dealer license covers specific fleet, repossession, auction or lease-option activity without dealer plates, and leasing beyond 60 days needs a separate license. iowadot.gov › get-motor-vehicle-dealers-license (source, opens in a new tab)

  2. Take the eight-hour course

    At least one qualifying owner, principal, officer, member or partner completes the eight-hour pre-license course through the Iowa Independent Automobile Dealers Association before you apply. iowadot.gov › get-motor-vehicle-dealers-license (source, opens in a new tab) iowaiada.com › dealer-education (source, opens in a new tab)

  3. Fit a display area and a repair shop

    This is the hard part. You need a car display area of at least 18 by 30 feet, not counting parking, either indoors or outdoors on an all-weather surface (grass or bare soil doesn't count), and a repair area of at least 14 by 24 feet with equipment and tools, separated from sales, display and office by floor-to-ceiling walls and full-length solid doors. iowadot.gov › get-motor-vehicle-dealers-license (source, opens in a new tab)

  4. Set up the office and zoning

    Have a business phone and staff the business at least 32 hours Monday to Friday. Get written evidence of local zoning compliance, and make sure the entity is in good standing. iowadot.gov › get-motor-vehicle-dealers-license (source, opens in a new tab)

  5. Bond, insurance and application

    Get a $75,000 surety bond and liability insurance of at least $100,000 per person, $300,000 per accident and $50,000 property damage. Submit the dealer license application with the bond and the fee form (417009): $70 for the license, plus a $70 registration fee and $40 per plate if you want dealer plates. You don't pay that amount: a surety company charges you a premium, a fraction of it, set mainly by your credit. iowadot.gov › get-motor-vehicle-dealers-license (source, opens in a new tab) iowadot.forms.govos.com › FeesforDealerLicenseApplication (source, opens in a new tab)

  6. Book the inspection when you're ready

    Contact the Bureau of Investigation & Identity Protection for the on-site inspection, but only once the site is fully compliant. Booking it early is a common mistake. iowadot.gov › get-motor-vehicle-dealers-license (source, opens in a new tab)

  7. Keep it current

    Renew before the end of your expiration month. Continuing education is required, or renewal is denied. iowadot.gov › get-motor-vehicle-dealers-license (source, opens in a new tab) iowadot.gov › dealer-licenses-requirements (source, opens in a new tab)

The location

Display lot
Car display area at least 18 × 30 ft excluding parking, indoors or all-weather outdoor surface; grass/exposed soil excluded. Repair area at least 14 × 24 ft with equipment/tools. iowadot.gov (source, opens in a new tab)
Office
Business phone; staffed at least 32 hours Monday–Friday. Repair shop separated from sales/display/office by floor-to-ceiling walls and full-length solid doors. iowadot.gov (source, opens in a new tab)
Zoning and home-based lots
Written local zoning-compliance evidence. iowadot.gov (source, opens in a new tab)

Before you apply

Entity compliance and financial liability insurance at least $100,000/person, $300,000/accident, $50,000 property. iowadot.gov (source, opens in a new tab)

Forms

Motor Vehicle or Towable Recreational Vehicle Dealer License Application and bond linked on primary page; 417009 Fees for Dealer License Application. iowadot.gov (source, opens in a new tab)

Get the current versions from iowadot.gov; we don’t host copies.

Not the license you’re after?

Restricted dealer covers specific fleet, repossession, auction or lease-option activities, with no dealer plates; leasing beyond 60 days requires separate license. iowadot.gov (source, opens in a new tab)

What trips people up

Our read of the requirements above, not official guidance or statistics.

The hardest part: fitting both an 18 × 30 ft display area and separated 14 × 24 ft repair space into a starter location.

Easy mistakes:

Questions

How much does an Iowa dealer license cost?

$70 for the license; dealer plates add a $70 registration fee and $40 per plate. The premium on the $75,000 bond, insurance and a site with a repair shop cost far more. iowadot.forms.govos.com › FeesforDealerLicenseApplication (source, opens in a new tab) iowadot.gov › get-motor-vehicle-dealers-license (source, opens in a new tab)

Do I need a repair shop?

Yes: a repair area of at least 14 by 24 feet with tools, walled off from sales, display and the office. iowadot.gov › get-motor-vehicle-dealers-license (source, opens in a new tab)

Can my display lot be grass?

No. It must be indoors or on an all-weather surface. iowadot.gov › get-motor-vehicle-dealers-license (source, opens in a new tab)

Sources

Not affiliated with the Iowa DOT. Not legal advice. Requirements change; always confirm with the state.