Rhode Island Code of Regulations
Title 280 - Department of Revenue
Chapter 30 - Division of Motor Vehicles
Subchapter 20 - Dealer Licensing and Registration
Part 1 - Dealers, Manufacturers, and Rental Licenses
Section 280-RICR-30-20-1.6 - Requirements for Dealers

1. The business of dealing in motor vehicles is of prime and vital importance to the car buying public. The purchaser of a motor vehicle has the right to expect that it be equipped with proper brakes, lights and other safety appliances as required by law. Consequently, the sale of motor vehicles must not be carried on as a sideline by any other type of business.

1. Every dealer must establish a suitable place in which to conduct the business of dealing in motor vehicles. The business must be housed in one (1) building, on the premises, which contains at least two thousand four hundred (2,400) square feet of enclosed and heated floor space to provide a suitable office and space where motor vehicles may be properly repaired and serviced. At the Board's discretion, service facilities may be maintained in a separate building. Any applicant requesting a license to deal in motor vehicles who presently maintains or intends to apply for a competitive body shop license must provide at least two thousand four hundred (2,400) square feet of enclosed and heated floor space in addition to any other license requirements. A minimum requirement for lot display must be two thousand four hundred (2,400) square feet. This place of business must be used exclusively by the dealer for the purpose of displaying, repairing, buying and selling vehicles. Dealers, solely in the business of buying and selling motor scooters, motorcycles and mopeds, will be licensed to sell these vehicles only. The place of business for such dealers must be housed in a building that measures at least one thousand two hundred (1,200) square feet of enclosed and heated space, to provide suitable office and space where cycles may be properly repaired and serviced. Such dealer's license must be stamped "for mopeds, motorcycles, or motor scooters only". Dealer plates issued to such dealers may only be used on mopeds, motorcycles, or motor scooters, and may not be used on other motor vehicles.

1. Every dealer must provide the Department at the time of application for a dealer's license with proof of ownership (copy of deed) of the place of business, or with a copy of a formal signed lease for the place of business, including the square feet and outside display area, that is at least one (1) year in duration.

1. When a change in location is contemplated, notification shall be made to the Department on whatever forms the Department requires and must be approved by this Department prior to the relocation. If the new location has not been previously approved by the Department, the same procedure shall be followed as if it were a new application.

1. Every applicant for a dealer's license who desires to operate in any city or town which has a zoning law or zoning regulations must submit proof, in writing, that the property on which he intends to conduct his motor vehicle dealership is properly zoned for the business of dealing in motor vehicles. If a town or city requires a license to sell motor vehicles, this office must receive a copy of that license in lieu of the zoning approval notice.

1. Every dealer must maintain a service and repair shop with sufficient tools to perform routine repairs and maintenance of motor vehicles.

1. Every dealer must conspicuously display the dealer's license at the location for which it was issued.

1. Every dealer must display a sign or window lettering on the front of the premises where the building is located showing the actual name under which the business is licensed. The words and lettering of the sign must be of a size sufficiently large enough to be readily discerned. The total size of the sign must be a minimum of twenty-four (24) square feet, or the maximum size under local zoning ordinances if such ordinances restrict signs to less than twenty-four (24) square feet.

1. Prior to the issuance of a dealer's license, all applicants must have a telephone installed at the licensed address including main, branch and annex locations.

1. A separate license must be obtained for each annex or branch location. The Department may waive certain requirements for dealers when an annex lies within the radius of two (2) driven miles from the main place of business specified on the dealer's license and is to be used for the sale of used vehicles.

1. A dealer may only sell those brands of new vehicles as a "franchised dealer" that are listed on the license application(s) submitted by the dealer and approved by the Department. If a dealer wishes to sell additional brands of new vehicles, he must apply for permission to do so from the Department in accordance with R.I. Gen. Laws § 31-5.1-4.2.

1. No dealer shall be permitted to accept any motor vehicle transactions negotiated by a salesperson or agent during the course of his or her employment as a salesperson or agent for any other dealer. Dealers shall not permit individuals not actually in their employ and not actually selling vehicles for that dealer, to use the dealer's headquarters, premises, dealer plates, or sales documents when selling motor vehicles. Payroll records must be available to the Department on request. Any person buying motor vehicle(s) for any licensed dealership must use that dealer's company check to purchase such vehicle(s). The owner, a partner or a corporate officer of such dealership must also be authorized to sign the same company checks. Dealers must provide the names of salespersons to the Department immediately upon starting employment, even if the salesperson has been hired on a probationary/trial basis.

1. A motor vehicle dealer licensed by the Department may, in connection with the sale of a motor vehicle, impose a fee for the service of registering and titling said vehicle with the division of motor vehicles. Said fee shall be separately itemized on the bill of sale, shall be designated as "Title Preparation Fee" and shall not exceed twenty dollars ($20.00). A motor vehicle dealer who, in connection with the sale of a motor vehicle, imposes a "Title Preparation Fee", shall provide to the purchaser a written statement which fully discloses the services to be rendered pursuant to the payment of the "Title Preparation Fee". Said services shall include:

2. No dealer shall impose any other fees of similar meaning and/or for related services, such as, but not limited to: freight, handling, overhead expenses, vehicle preparation, etc., in an attempt to circumvent this rule.

1. A motor vehicle dealer licensed by the Department may impose a fee on vehicle transactions in excess of ten thousand dollars ($10,000.00) for the preparation of various paperwork associated with the sale, financing, leasing, insurance, liens, warranties, federal and state disclosures and other procedures associated with the sale, leasing and financing of vehicles obtained or provided by the dealership. The fee may not exceed four hundred dollars ($400.00). Any motor vehicle dealer who charges a documentary preparation fee in excess of four hundred dollars ($400.00) or who charges any documentary preparation fee in connection with the sale of a motor vehicle for less than ten thousand dollars ($10,000.00) shall be subject to the imposition of a fine and/or the suspension or revocation of their license.

1. In order that the purchasers of motor vehicles shall be adequately protected, all applications for a license must be accompanied by a financial statement prepared by a Certified Public Accountant (CPA) which must demonstrate a sufficient amount of cash and other tangible assets over and above all liabilities that would justify the issuance of such license. The Department may request a line of credit. The Department has the authority to request for inspection any and all documents pertaining to the business. A bond in the amount of fifty thousand dollars ($50,000) for all motor vehicle dealers, and fifty thousand dollars ($50,000) for moped and motorcycle dealers, payable to the Department, issued by a surety company authorized to do business in Rhode Island, must be filed. Said bond shall be filed yearly along with the dealer's license renewal forms and shall be in effect until December 31 of that year. This bond requirement will become effective March 31, 2009 for all existing dealers and applicants for dealers' licenses.

1. The business of dealing in motor vehicles must be a full-time operation and such establishments must be kept open for business during normal business hours unless a sudden emergency makes it necessary to close, at which time the Department must be notified within two business days of closing.

1. All motor vehicles must be owned by the dealer, and all sales transactions must be made from the dealer's licensed place of business. Dealers shall not sell vehicles on a consignment basis. No dealer shall display a vehicle other than at his place of business. The Department shall have the authority to make exceptions.

1. No dealer of used vehicles, as defined by R.I. Gen. Laws § 31-1-19(b), shall sell at retail a used motor vehicle unless a new inspection of the vehicle conforming to the standards set pursuant to R.I. Gen. Laws Chapters 31- 38 and 31-47.1 has been conducted and the vehicle has a new certificate of inspection affixed to the windshield at the time of sale. A new inspection consists of an inspection conducted at a point no more than ninety (90) calendar days prior to the date of sale of a vehicle, or an inspection conducted no more than five hundred (500) vehicle odometer miles prior to the date of sale, whichever shall occur first. All vehicles offered for sale on a dealer's premises must have valid state inspection stickers affixed to the vehicles' windshields.