ACV facts & figures
Have you recently decided to jump into the auto sales game? If so, you probably have questions about dealership plates and tags.
Dealer license plates provide many benefits for vehicle dealers, but they come with a lot of red tape. And that red tape can vary from state to state. Still, dealership plate definitions and laws share certain general elements.
What Are Dealer Tags and Plates?
Dealer tags are temporary license plates that only a licensed vehicle dealer can buy. These tags generally allow auto dealers to use, transport, and demonstrate unregistered vehicles on public roads. Dealership tags are also called D-tags, dealer plates, and paper tags.
Several states offer different types of dealership plates, including:
- Metal dealer plates
- Paper dealer plates
In general, dealer plates are considered temporary. Paper tags may expire a couple of days to a couple of months after issue. Metal dealer plates may last longer and are often transferrable, depending on your state.
What Are the Benefits of Dealer Tags?
Dealer tag benefits vary across states and by the type of tag. But certain benefits are fairly common.
- Inspection exemption: Some dealer tags allow vehicles to skip state inspections.
- Little to no fees: Some dealer tags do not carry a fee. Others cost a small amount.
- Portability: Some dealer tags can be easily transferred from one vehicle to another.
- Registration exemption: Some dealer tags get registered to a dealer or an agent, not an individual car.1 This means the tags often do not tie back to a specific vehicle identification number (VIN).
Each state has its own dealer plate laws. Potential auto dealers can learn about these laws from their state department of motor vehicles.
Who Can Use Dealer Plates?
In general, only licensed dealerships and their employees can use dealer license plates.2 This includes new, used, and wholesale dealers. But each state has its own take on what it means to "use" a dealership tag. Common uses of dealer plates include:
- Allowing a potential buyer to test-drive an unregistered vehicle
- Allowing a customer to drive an unregistered loaner vehicle while theirs is being repaired
- Testing a dealer-owned vehicle on public roads
- Transferring a dealer-owned vehicle from one location to another
In some situations, it may not be a dealer or their employee operating the vehicle. But many states still consider these cases to be dealer use as long as the car is for sale. This means dealer plates can basically go on any vehicle in a dealer's inventory.
What are the Limitations on Dealer Plates?
Many states put limits on dealer plate usage, even for dealers and their employees. Common dealer plate limitations include:
- Paper tags generally expire in a couple of days to a couple of months.
- Dealer plates cannot go on rental or lease cars.
- Dealers can only have a certain number of dealer tags. Some states allow additional plates under specific circumstances.
- Dealers must report lost or stolen dealer plates.
These limits help states prevent dealer plate fraud, which can be a real problem. Because some dealer tags can move easily from car to car, they are a target of theft. Thieves may use stolen dealer tags to drive unsafe vehicles. Stolen dealer plates may also help some criminals avoid car registration fees and sales tax.
What does this mean for you? Your obligation when you become a car dealer is to report lost or stolen dealer plates. If you don't, law enforcement may investigate your dealership. You could even lose your dealer's license.
How Do You Buy Dealer Tags?
You may be wondering how you buy these plates? Can you buy a dealer plate from someone on the internet? Probably not. Only licensed motor vehicle dealers can get dealer tags. And in some cases, the tags don't need to be purchased.
But first things first. Many states require auto dealers to get a valid dealer's license to buy these special plates.
Licensed dealers in some states can print dealer tags through an online system. For example, Texas dealers can use the webDealer | eTAG system.3 Online systems may require any of the following to print a dealer license plate:
- Dealership name
- Dealership license information
- Dealership agent name
- Vehicle information (for vehicle-specific tags)
Each state has its own process for getting dealer tags, while some states like Massachusetts don’t issue them at all. You can learn about your state's process from its department of motor vehicles (DMV).
How Can I Use Dealer Plates for Auction Cars?
When you buy auction cars online, you often have to transport your purchases to your dealership, legally. Enter dealer plates.
In general, licensed dealers can put dealer tags on cars purchased at an online car auction. When used correctly, these tags allow buyers to drive auction-purchased vehicles back to their dealerships.
In some states, dealers may be able to print these tags ahead of time. They may also be able to send the necessary tags to the auction or transport company.
Dealer Plates are Your Friends
Whether you’re transporting auction cars, giving test drives, or renting out a vehicle, dealer plates can help! They play an important role in stocking, maintaining, and moving inventory on the lot. It’s important to know your state laws regarding dealer plates, so you can use them with confidence when the time comes.
We look forward to helping you source inventory at ACV Auctions! Start finding competitive used vehicles by registering with us.
- Dealer101. Who can use California Dealer Plates (Special Plates)? Retrieved June 2022 from https://dealer101.com/lessons/use-of-dealer-plates/
- FindLaw. Is It Legal to Drive With Dealer Plates? Retrieved June 2022 from https://www.findlaw.com/legalblogs/law-and-life/is-it-legal-to-drive-with-dealer-plates/
- Texas Department of Motor Vehicles. webDEALER | eTAG 101. Retrieved June 2022 from https://www.txdmv.gov/dealers/webdealer/webdealer-101