Missouri used car dealer license, bond and insurance: what you need to open

If you need insurance for a used car lot in Missouri, you need two documents before the Missouri Department of Revenue (DOR) will license you: a $50,000 dealer bond and a copy of a current dealer garage policy. Burch Insurance Group can quote the garage policy, help you line up the bond and match coverage to how your lot will run. DOR's Dealer Licensing Section issues the license. A quote or a bond does not, by itself, let you start selling.

What does Missouri require before I can open a used car lot?

Under RSMo 301.560 and DOR's Form 4682 application, a used motor vehicle dealer applicant submits:

• A completed Form 4682 and Form 5748, the inspection and certification form
• The original $50,000 surety bond or irrevocable letter of credit
• A copy of a current dealer garage liability policy
• A current photo of the business showing the building, lot and sign
• Criminal record checks for each owner, partner or principal officer
• Proof of a DOR-approved dealer educational seminar completed within the last twelve months, if you are a first-time used dealer applicant
• Fees for the license and each dealer plate requested

What does my business location need?

Missouri requires a bona fide established place of business. The statute and DOR's dealer operating manual describe:

• A permanent enclosed building, owned or leased and actually occupied as a place of business, with a street address (a post office box alone is not accepted)
• A working phone number and email address
• An exterior sign with letters at least six inches high (banners do not count as permanent signs)
• A display lot that is not a public street and is visible from the nearest street (an enclosed garage does not qualify)
• An inspection by the Missouri State Highway Patrol or an authorized designee before you submit the application, with certification each year for the first three years and every other year after that

Before you sign a lease in St. Louis, Kansas City, Springfield or a smaller town, check local zoning as well. The location has to keep meeting these rules for the whole license period, and DOR expects to hear within 10 days if it stops meeting them.

How does the $50,000 Missouri dealer bond work?

Missouri requires a bond or irrevocable letter of credit in the penal sum of $50,000 on a DOR-approved form. DOR's manual says it must run through December 31 of the license year or be non-expiring. The $50,000 is the bond amount, not what you pay. The price and approval depend on the surety's underwriting.

A bond and a garage policy do different jobs. The bond supports your obligations under its terms. It does not insure you against lawsuits or protect your inventory from hail, theft or fire, and a surety can seek repayment from you for a valid claim it pays.

What insurance does DOR want to see?

The statute requires a copy of a current dealer garage policy showing the policy number and the names of the insurer and the insured. DOR's manual adds the effective and expiration dates and the addresses. That section of the law does not list minimum limits, so set limits based on your operation, your lender and your landlord.

For a small Missouri used dealer, the coverage conversation usually includes:

• Garage or dealer liability for your premises and operations, including test drives
• Physical damage coverage for owned inventory, since one Missouri hail storm can hit every car on an open lot at once
• Garagekeepers coverage if you hold or repair customers' vehicles
• Any floor plan lender's requirements

Tell us who drives dealer vehicles, whether you transport cars, whether you do repairs and where cars sit overnight.

When does a Missouri dealer license renew?

DOR's manual says all dealer licenses and plates expire December 31 of the expiration year, with no grace period. It lists a $25 late penalty for renewals received on or after November 3 but before December 31, and $50 after December 31. Keep your bond and garage policy dates lined up with the license so you are not scrambling for documents at year end.

Questions Missouri dealers ask us

Do I need the garage policy before the license is issued? Yes. DOR asks for a copy of a current dealer garage policy with the application, so the policy is usually in place before you apply. Tell us your target opening date.

Is $50,000 what I pay for the bond? No. That is the bond amount. Your cost depends on the surety's review.

Do I need the dealer seminar? First-time used dealer applicants generally do. DOR lists exemptions, including applicants who already hold a license for a separate dealership.

Does my garage policy cover hail damage to my cars? Not unless you add physical damage coverage for inventory. Liability alone does not pay to fix your own cars.

What BIG needs to start

Send your legal business name, proposed location, ownership details, target opening date, expected number of cars and highest inventory value, and a short description of how you will operate. If some details are still being settled, tell us which ones.

Our used-car dealer insurance quote checklist has more detail, and our Minnesota dealer page shows how the same process works in another state.

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