Idaho used car dealer license, bond and insurance: what you need for a quote

If you are opening or renewing a used car lot in Idaho and need a quote, plan the dealer bond and the liability insurance together. The Idaho Transportation Department will not issue or renew a dealer license without both, and the names, address and dates on each document need to match your application. Burch Insurance Group can quote the garage or dealer liability policy, help you line up the bond and talk through coverage for your inventory.

Who licenses used car dealers in Idaho?

Dealer licenses are issued by the Idaho Transportation Department through DMV Dealer Services. ITD says a dealer license is needed when a person sells five or more titled vehicles or vessels in a calendar year, along with certain other activities.

New owners of a used-only or wholesale-only dealership must complete an 8 hour pre-licensing class and pass an exam for applications made on or after September 1, 2022. Owners renewing a used-only or wholesale-only license need 4 hours of education each year. ITD lists approved education providers on its vehicle dealer page.

The application has to be fully completed, list all owners and officers and be notarized, and ITD asks you to allow 30 days for processing. Each owner also submits a personal history form. ITD also lists a seller's permit from the Idaho State Tax Commission and a federal employer identification number among the documents.

What does the Idaho dealer location need?

ITD requires an enclosed commercial structure in an area zoned for the business, with zoning approval. Your business name must not be deceptively similar to an existing dealership, and an assumed business name must be filed with the Idaho Secretary of State. After approval, a Motor Vehicle Investigator inspects the location.

Check zoning with the city or county before you sign a lease. A building that fails the location rules can hold up the license and the insurance, because both are tied to the address.

How big is the Idaho dealer bond?

Idaho Code section 49-1608 sets the bond by dealer type:

• $20,000 for most dealers, including a retail used car lot
• $40,000 for a wholesale dealer of used vehicles
• $10,000 for a dealer selling only motorcycles, ATVs, utility type vehicles, truck campers or snow machines

ITD says the bond must come from a corporate surety licensed in Idaho, or be posted as cash or a certificate of deposit. The bond amount is not what you pay for it. The surety sets the price based on its own underwriting, and a surety that pays a valid claim can seek repayment from the dealer.

Retail dealers also pay $300 into the Idaho Consumer Asset Recovery Fund (ICAR), a dealer-funded reserve for consumers who suffer certain losses from dealer violations. Wholesale-only dealers are exempt. ITD says dealers who have operated at least three consecutive years without lapses or claims may choose to operate without the performance bond, as long as no claims or judgments were paid through the ICAR fund. Confirm your eligibility with ITD before you let a bond lapse.

What insurance does Idaho require for a dealer license?

Idaho Code section 49-1608A requires every dealer to continuously carry liability insurance for bodily injury, death or property damage arising from vehicles it owns or controls and uses in the business. The minimums are:

• $25,000 for bodily injury or death of one person in an accident
• $50,000 for bodily injury or death of two or more people in an accident
• $15,000 for damage to the property of others in an accident

A certificate of liability insurance has to stay on file with the department. ITD says the certificate must show "any auto" coverage or state that it complies with section 49-1608A. Those are minimums. Many dealers carry higher limits because a serious test drive accident can exceed them quickly.

What else should a small Idaho lot insure?

The required liability policy does not cover damage to your own cars. Talk through:

• Physical damage coverage for owned inventory, based on the most you expect to have on the lot at one time
• Hail, theft and vandalism on an open lot, and where cars sit overnight
• Garagekeepers coverage if you hold or repair customers' vehicles
• Lender requirements if you use floor plan financing
• Who drives dealer vehicles, how test drives are handled and whether you use dealer plates or transport cars between auctions

Questions Idaho dealers ask us

Can I get the insurance before the license is approved? Yes. ITD needs the certificate on file as part of the application, so the policy is usually bound before the license is issued. Ask us to match the effective date to your target opening.

Is the $20,000 bond the same as my liability insurance? No. Under Idaho Code section 49-1608, the bond is conditioned on the dealer not committing fraud or violating Idaho's dealer laws. The liability policy pays claims for injuries and property damage. You need both.

I only wholesale. What changes? The bond rises to $40,000 and you skip the ICAR payment. You still need the liability insurance.

Do I need a local agent? No. Burch Insurance Group is licensed in Idaho and works with dealers in Boise, Nampa, Idaho Falls, Coeur d'Alene and elsewhere by phone and online.

What BIG needs to start

Tell us you are applying for or renewing an Idaho dealer license and send the business name, lot address, ownership details, target opening date, expected inventory value and a short description of how you operate. Our used car dealer insurance quote checklist covers the details in full.

Request a dealer insurance quote, or call 612-712-6407.