Getting a used car dealer license in South Dakota

In South Dakota, used-car dealers are licensed by South Dakota DOR Motor Vehicle Division.

Before your first retail sale you’ll need a $25,000 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

At a glance

License
Vehicle Dealer/Used Car Dealer dor.sd.gov (source, opens in a new tab)
Issued by
South Dakota DOR Motor Vehicle Division dor.sd.gov (source, opens in a new tab)
Surety bond
$25,000. dor.sd.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
Agency offers one-to-one and requested training. dor.sd.gov (source, opens in a new tab)
Official fees
$300 initial used/vehicle dealer license. dor.sd.gov (source, opens in a new tab)
Renewal
Paper license five years but renewal/payment annually; $175 on-time renewal. Late renewal charged initial rate. dor.sd.gov (source, opens in a new tab)
Site inspection
Yes: dealer inspector certifies before issuance. dor.sd.gov (source, opens in a new tab)

Step by step

  1. Start with your local Dealer Agent

    South Dakota's Department of Revenue Motor Vehicle Division licenses vehicle and used car dealers, and the process starts with your local Dealer Agent. Boat, motorcycle, trailer and manufactured-home dealers have different requirements. The agency also offers one-to-one training on request. dor.sd.gov › dealer-vehicle-licenses (source, opens in a new tab) dor.sd.gov › dealer-requirements-license-plates (source, opens in a new tab)

  2. Set up the premises

    You need an improved area next to the office for at least five vehicles, and a heated, lighted, permanent office with your records on site, open at least 20 hours a week between 8 a.m. and 8 p.m., with hours and phone posted. If you share a building, the office must be separate. A permanent exterior sign with the business name must be legible from the road. dor.sd.gov › dealer-requirements-license-plates (source, opens in a new tab)

  3. Check zoning

    The site must comply with land-use, building and zoning rules. Rooms in a dwelling don't qualify unless the whole ground floor is mainly commercial. dor.sd.gov › dealer-requirements-license-plates (source, opens in a new tab) dor.sd.gov › dealer-vehicle-licenses (source, opens in a new tab)

  4. Get the bond and insurance

    You need a $25,000 bond and public liability insurance of at least $300,000. You don't pay that amount: a surety company charges you a premium, a fraction of it, set mainly by your credit. dor.sd.gov › dealer-requirements-license-plates (source, opens in a new tab)

  5. Apply

    Submit the dealer license application through your Dealer Agent or the online service, with dealer plates on form MV1401. The initial used dealer license is $300. dor.sd.gov › dealer-vehicle-licenses (source, opens in a new tab) dor.sd.gov › dealer-requirements-license-plates (source, opens in a new tab)

  6. Pass the inspection

    A dealer inspector certifies the site before the license is issued. dor.sd.gov › dealer-requirements-license-plates (source, opens in a new tab)

  7. Pay every year

    The paper license lasts five years, but you renew and pay every year: $175 on time. A late renewal is charged the initial rate. dor.sd.gov › dealer-vehicle-licenses (source, opens in a new tab) dor.sd.gov › dealer-requirements-license-plates (source, opens in a new tab)

The location

Display lot
Improved adjoining area for at least five vehicles. dor.sd.gov (source, opens in a new tab)
Office
Heated/lighted permanent office; 20 hours/week between 8am–8pm, posted hours/phone; records on site; separate office if building shared. dor.sd.gov (source, opens in a new tab)
Sign
Permanent exterior business-name sign legible from public right of way. dor.sd.gov (source, opens in a new tab)
Zoning and home-based lots
Land-use/building/zoning compliance; dwelling rooms excluded unless entire ground floor principally commercial. dor.sd.gov (source, opens in a new tab)

Before you apply

Public liability at least $300,000. dor.sd.gov (source, opens in a new tab)

Forms

Dealer License Application via Dealer Agent/online service; MV1401 dealer plates. dor.sd.gov (source, opens in a new tab)

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

Not the license you’re after?

Boat, motorcycle, trailer and manufactured-home categories have different requirements. dor.sd.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: meeting five-vehicle premises rules while remembering annual payments on a five-year certificate.

Easy mistakes:

Questions

How much does a South Dakota dealer license cost?

$300 initially, then $175 a year if you renew on time. The bond premium, the $300,000 liability insurance and the premises cost more. dor.sd.gov › dealer-vehicle-licenses (source, opens in a new tab) dor.sd.gov › dealer-requirements-license-plates (source, opens in a new tab)

My license says five years. Do I still renew?

Yes. You renew and pay every year even though the paper license covers five years. dor.sd.gov › dealer-vehicle-licenses (source, opens in a new tab) dor.sd.gov › dealer-requirements-license-plates (source, opens in a new tab)

Can I run a dealership from home in South Dakota?

Only if the whole ground floor is mainly commercial; ordinary rooms in a dwelling don't qualify. dor.sd.gov › dealer-requirements-license-plates (source, opens in a new tab)

Sources

Not affiliated with the South Dakota Department of Revenue. Not legal advice. Requirements change; always confirm with the state.