Compared to many states, the process for getting your New Mexico auto dealer license is not complicated. In fact, New Mexico has fewer requirements compared to most states. While the process is very linear, there may be a few new concepts to cover if this is your first time getting licensed as a dealer.
This article will help explain the application steps to help make getting your application submitted easy.
Skip around to a relevant section:
- New Mexico license classifications
- Detailing the types of vehicles you will sell
- Outlining the ownership of the dealership
- Purchasing the auto dealer surety bond
- Taking location images and meeting location requirements
- Submitting application for initial review
The 5 Step Checklist To Get Your New Mexico Auto Dealer License
At a high level the process is not more complicated than completing the application. It's making sure you have the necessary paperwork and insurance policies so you can have your application approved during the first review.
In New Mexico the state recognizes you as an auto dealer when you sell more than four vehicles in a continuous 12 month period.
Step 1 - Dealer License Classifications
The first part of the dealer application is choosing your license classification and providing the individual or business type
Each license classification requires its own application process. This means each license is independent.
The following are the recognized classifications in New Mexico.
- Manufacturer - a business that produces/manufactures new motor vehicles
- Distributor - an individual or business entity that works with a manufacturer to increase the footprint of vehicles sold across a given territory
- Wholesaler - an individual or business entity that sells new and/or used vehicles direct to retail auto dealers (wholesales do not sell vehicles to retail consumers)
- Retail Dealer - an individual or business entity that sells vehicles direct to retail consumers
The Retail Dealer classification breaks down into:
- New vehicle dealer
- Used vehicle dealer
- Motorcycle dealer
New Mexico licenses Vehicle Dismantlers. While not a dealer, getting licensed as a vehicle dismantler requires a surety bond. This is described below.
Determine The Types of Vehicles You'll Sell
You will have to outline the type of vehicles sold and provide the necessary paperwork.
- New vehicles will require a copy of the franchise agreement with the manufacturer
- Used vehicles requires passing a pre-licensing education course
Choosing the type of vehicles you'll sell must match with the license type. This is important because if you choose to sell used vehicles and motorcycles, you'll have to submit two applications and purchase two different dealer surety bonds.
Used Dealer's Pre-Licensing Course
The pre-licensing course covers topics such as:
- Used dealership responsibilities
- Best practices for running a successful dealership
- Understanding New Mexico's operational statues and regulations
- Knowing the appropriate paperwork and handling of vehicle sales
There are pre-licensing courses you can take to help study for the exam. Check with the New Mexico Independent Auto Dealer Association for further self-study course information.
Step 2 - Outline The Ownership of the Business
The legal names and contact information for all owners of the business must be provided. The percentage of ownership must be stated as well. It's important that the percentage of ownership equals 100%.
The individual who is actually applying must provide their personal information as well, even if they are not part of the business ownership.
The Applicant Affidavit
The individual who is applying must sign an affidavit (a legally binding promise of accurate information) about the ownership information.
This statement details whether the applicant or ownership ever:
- Been denied, had a license revoked, or suspended for any of the license classifications in New Mexico or any other state?
- Been arrested, charged with, convicted, or plead guilty to any felony or misdemeanor/crime within the past 10 years?
- Been subject to disciplinary actions of any state with regards to dealership activities?
- Held any other type of occupational license and been subject to denial or any disciplinary action?
- Had or currently has a financial interest in any other dealership in New Mexico or another state?
Step 3 - Surety Bond Requirement
New Mexican requires all dealers, no matter their classification, to purchase a surety bond before you can submit your application for initial review. This surety bond must be attached to the application or uploaded if applying electronically.
If this is your first time getting licensed as a dealer the surety bond requirement is probably new to you.
- Follow all rules, regulations, and laws for running a dealership in New Mexico
- Conduct business with your customers following fair and ethical business practices
- Pay all sales taxes for vehicles and merchandise sold through the dealership
Every year there will be a handful of dealers who make the decision to purposefully harm their customers to make more money or fail to pay sales taxes.
Examples of purposeful misconduct and fraud are:
- Requiring a customer to upgrade to special features that are not already part of the vehicle
- Lying about vehicle history or condition
- Falsifying odometer readings
- Failing to uphold obligations and promises made to retail customers
- Failing to uphold manufacturer warranties
These actions are what an auto dealer bond protects customers and the state of New Mexico against.
How Much Does an Auto Dealer Bond Cost?
The New Mexico Motor Vehicle Division requires the following bond amounts for dealers:
| Bond Type | Bond Amount |
|---|---|
| New (Franchise) Dealer Bond | $50,000 |
| Used Dealer Bond | $50,000 |
| Motorcycle Dealer Bond | $12,500 |
| Vehicle Dealer Bond | $50,000 |
The cost of a New Mexico auto dealer bond is based on a rate quoted from a surety. The surety is an insurance company that underwrites surety bonds.
The surety will use the following factor when assessing an applicant and determining a rate:
- The credit of the owner or all owners
- The business and industry experience
- Any past claims on bonds from previous licenses held (if there are any)
- The state of dealership complaints across New Mexico
How To Purchase an Auto Dealer Bond?
It's best to use a specialized surety agency, like Surety Bonds Direct, when you purchase a surety bond.
The reason a specialized surety agency can use their exclusive access to the best surety bond offerings. This can potentially save hundreds of dollars on the cost of the bond. You can put the money you save towards:
- Application fees
- Examination fees
- Purchasing liability insurance
A specialized surety agency works with multiple A-rated sureties to collect quotes and deliver the lowest possible quote and price to their customers.
Once you have your rate, purchasing the bond is as easy as filling out an online checkout form.
At Surety Bonds Direct, your account is handled by a dedicated bond specialist will help get your bond issued and manage the renewal of your bond.
If you need to get your bond now, click here and fill out our online quote form. You can call a bond specialist at 1-800-608-9950 to start the process over the phone.
Step 4: Dealership Images and Diagrams
The location of your dealership must either be owned or leased for a minimum of 6 months.
You must have:
- A business license for the local area
- The appropriate zoning documents from the local government agency.
You must provide the following diagrams, either hand drawn or computer generated.
- Detailed diagram of the property layout including the location of the main sign
- Diagram of the inside of the office space
You will also have to provide images of:
- Dealership property
- Vehicle display area
- Office building location from the outside
- Office building from the inside
- The necessary office equipment required to run a successful dealership
- The dealership sign
The name on the sign must match either the business name or the "doing-business-as" name registered with the New Mexico Secretary of State.
Make sure you're thorough when providing these diagrams and photographs. If the Division deems it necessary on the initial application review, they may require an on-site inspection.
The more detailed you are the less likely this will be required, speeding up the application process.
The Location Affidavit
Similar the the ownership affidavit, a location affidavit must attest to:
- The office building must have a permanent foundation
- The office is where all financial records are stored and available for inspection at the Division's notice
- The dealership is of sufficient size to allow for customer parking and display vehicles for sale
- The hours of operation are clearly displayed on the premisses
- The sign is readable and prominent using the correct business name
- The dealership or wholesaler business is not operating from a personal residence
- The property is used exclusively for the business of selling and/or buying vehicles
- The property is either owned or has an active lease of 6 months or more.
Step 5: Initial Review and Approval
There is a $50 fee to submit your application.
The Division makes applying really easy with an online portal inside your MyMVD account.
The Division will conduct an initial review ensuring:
- The ownership adds up to 100%
- The criminal and license history of the ownership checks out
- The surety bond is purchased with an effective date
- The location meats all the requirements
If they deem it necessary they will contact you with further information or require an on-site inspection.
Are You Ready To Purchase Your New Mexico Dealer Bond?
If you're ready to purchase your auto dealer bond, we are ready to help you save money and make the process easy to get through.
Remember, it only takes 1 to 2 business days maximum to have your bond in your hand. Plus we can future date the effective date, so there is no reason to delay getting the quote process started.
Click here and use our easy to fill out online quote form.
If you prefer to speak with a bond specialist, call 1-800-608-9950.
