Iowa Used Vehicle Dealer License Requirements – 2025 Overview
Iowa requires a motor vehicle dealer license if you sell more than a small number of vehicles in a 12‑month period. This page focuses on common requirements for used motor vehicle dealers regulated by the Iowa DOT.
Important: This is a general summary. Always confirm forms, fees, and rules on the official state website before you apply.
1. Who licenses used vehicle dealers in Iowa?
In Iowa, motor vehicle dealers are licensed by the Iowa Department of Transportation (Iowa DOT), Office of Vehicle & Motor Carrier Services.
- Regulator: Iowa Department of Transportation – Motor Vehicle Division
- Official dealer licensing hub: https://iowadot.gov/registration-plates/dealerships/dealer-licenses-requirements
2. Common dealer license types
Examples of Iowa dealer license types include:
- Used motor vehicle dealer – sells used vehicles to the public.
- New motor vehicle dealer – sells new vehicles under franchise agreements.
- Wholesale dealer – sells only to other licensed dealers.
3. Education, background checks, and key personal requirements
- Iowa requires most used motor vehicle dealer applicants to complete an 8‑hour pre‑licensing education course approved by the Iowa DOT.
- Applicants must submit to a background check and disclose criminal and regulatory history.
- At least one owner/partner must complete the education course; proof of completion is filed with the application.
4. Business location, office, and sign
Iowa’s definition of an established place of business generally includes:
- A fixed business location with a physical address and normal business hours.
- A display area large enough for the required number of vehicles.
- For many license types, a repair facility relationship or access may be required.
- A permanent business sign in the dealership name, visible from the nearest roadway.
- Compliance with local zoning and land‑use rules; zoning documentation is typically required.
5. Business entity, bond, and insurance
5.1 Business entity and tax IDs
- Form your business entity (sole proprietor, LLC, corporation, etc.) and register with the Iowa Secretary of State if required.
- Obtain a federal FEIN and Iowa sales tax permit.
5.2 $75,000 dealer bond
- Iowa dealer license applicants must file a $75,000 surety bond with the Iowa DOT on the required form.
5.3 Insurance
- Maintain minimum liability insurance levels as specified in Iowa Code and DOT guidance.
6. High-level application steps
- Complete the Iowa dealer pre‑licensing education course (if required for your license type).
- Form your business entity and obtain tax IDs.
- Secure a compliant dealership location, sign, and any required repair facility arrangements.
- Obtain your $75,000 surety bond and liability insurance.
- Complete the Iowa Application for Motor Vehicle or Towable Recreational Vehicle Dealer License and gather supporting documents.
- Submit the application, bond, insurance certificate, photos, and fees to the Iowa DOT.
7. After you are licensed: ongoing compliance
- Renew your Iowa dealer license before it expires; dealer privileges end if renewal is not processed on time.
- Keep your bond, insurance, and business information current with the Iowa DOT.
- Maintain records of all vehicle sales, titles, and odometer disclosures for the required retention period.