What this checklist covers
The State Dealer Licensing Compliance Checklist is a 15-point scorecard for dealer license, sales permits, surety bond, display lot requirements, records, title processing, temp tags, and state-specific renewals. Each criterion is scored from 1 to 5 on what the auditor sees on the day, and every gap goes into an action plan with an owner and a close date.
AutoSmart tip: State dealer licensing compliance varies significantly between states — what is required in Texas differs from California, Florida, or New York. Operating without a valid dealer license, with a lapsed surety bond, or in violation of display lot requirements exposes the dealership to license suspension, fines, and potential criminal liability. Review your state’s specific requirements annually, as state DMV regulations change without the level of publicity that federal rule changes receive.
The checks
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Dealer license and sales permits
- Is the dealership's state motor vehicle dealer license current, valid, and covering all vehicle types and transaction types (new, used, wholesale) conducted at the licensed location?
- Is the dealer license displayed at the licensed location as required by state law — typically in a conspicuous location accessible to customers?
- Are any additional sales permits, motor vehicle dealer endorsements, or specialty vehicle authorisations required by the state confirmed as current and on file?
- Is the licensed location address current — with any change of address, addition of a satellite lot, or opening of an additional location reported to the state DMV within the required timeframe?
Surety bond and display lot requirements
- Is the dealership's motor vehicle dealer surety bond current, in the required amount for the state, and held with a licensed surety company?
- Is the surety bond amount reviewed when the state adjusts requirements — with the bond amount increased to meet any updated state minimum?
- Does the display lot meet state requirements — including minimum number of display spaces, required signage, required hours of operation, and any fencing or physical requirements specified by state DMV?
- Is the display lot's zoning confirmed as permitting motor vehicle dealer activity — with zoning documentation available if requested by the state DMV during a compliance inspection?
Title processing and temp tags
- Is title processing completed within the state's required timeframe — with no titles held beyond the allowed period before being transferred to the buyer's name?
- Is temp tag (temporary registration permit) issuance controlled — with permits issued only for legitimate vehicle sales, recorded in a temp tag log, and not issued in excess of the state's permitted quantity or expiry period?
- Is a title log or equivalent tracking system maintained, confirming the status of every title in process — identifying any titles approaching the state's maximum processing timeframe?
Records and state-specific renewals
- Are deal records retained for the period required by state law — typically 3–5 years — in a format that allows production for a state DMV audit?
- Are license, bond, and permit renewal dates tracked in a compliance calendar — with renewals initiated sufficiently in advance to prevent any lapse in the dealer's authorised operating status?
- Is the dealership's qualifying officer or designated dealer representative (required in some states) currently licensed and their license status monitored for renewal?
- Is a named person responsible for state dealer licensing compliance — with authority to initiate renewals, respond to state DMV inquiries, and escalate compliance issues to the Dealer Principal?
How to run it
How the scoring works
Before the visit, fill in the dealer or centre, the auditor, the date and the audit cycle. Then score each of the 15 checks from 1 to 5 on what you see on the day, not on what the site aims for, and add them up out of 75.
- 1Not in place
- 2Attempted
- 3Defined
- 4Managed
- 5Fully sustained
- Green60–75 · 80–100%Compliant. Keep the standard.
- Amber38–59 · 50–79%Improvement needed: a structured action plan within 30 days.
- Red0–37 · Below 50%Priority intervention, escalated to regional management.
Then close every gap
Each gap goes into the action plan tracker and moves through four stages until the auditor closes it.
- 1PendingOwner and close date set
- 2In progressWork under way, evidence gathered
- 3CompletedEvidence submitted for review
- 4ApprovedVerified and closed by the auditor
