In the state of New York, there are several licenses you can obtain to be a part of the state’s auto industry. Find out more about the various licenses you can obtain through the Department of Motor Vehicles to operate an auto business in New York.
Franchised and Used Auto Dealers
There are many similarities in the way franchised and used auto dealers are licensed, but there are some important differences as well. Franchised car dealers have franchise agreements with auto manufacturers and sell primarily new vehicles. Franchised dealers can also sell used cars under their license. Used auto dealers can sell only used vehicles; their license does not permit them to sell new vehicles. Like used car dealers, new dealers must purchase a surety bond as part of the licensing process. They need a $50,000 surety bond, which can be submitted on the same form as a used car dealers’ bond.
New car dealers also submit their application on the same form as used car dealers. On the application, auto dealers must specify if they plan to sell cars retail or wholesale. Wholesale dealers cannot sell cars retail, but retail car dealers can sell cars wholesale.
A previous post on the Insider addressed the Used Car Lemon Law in New York that protects consumers who unknowingly purchase lemons. The state also has a New Car Lemon Law to protect new car buyers or lessees. The New Car Lemon Law is similar in many ways to the Used Car Lemon Law; for example, consumers are entitled to a full refund if the car cannot be repaired in a reasonable number of attempts or if it is not usable due to repairs for a certain number of days. New cars that have been repaired four or more times, or that have been out of service due to repairs for 30 days or more, are considered lemons and their owners are entitled to a refund or replacement.
Both new and used auto dealers must pay the same fees when applying for their license. These amounts must be made payable to the Commissioner of Motor Vehicles:
- $487.50 application and business fee
- $260 MV-50 (retail certificates of sale) fee
New and used car dealers are both required to purchase a surety bond when becoming licensed. As mentioned, franchised dealers need a $50,000 surety bond. Per new legislation taking effect April 8, 2017, used car dealers’ surety bond amounts will be as follows:
- 50 or fewer cars sold in the previous calendar year—$20,000 surety bond
- 51 or more cars sold in the previous calendar year—$100,000 surety bond
First-time used car dealer applicants will purchase the $20,000 surety bond. Prior to the passage of Assembly Bill 8166, used auto dealers needed a $10,000 surety bond if they sold 200 or fewer cars, and those who sold 201 or more cars needed a $25,000 bond. Want to learn more about the increase? Read about the law itself, other New York used car dealer laws, or their licensing process in previous blog posts. The New York DMV has also put together a checklist of dealer requirements.
Other Auto Industry Professions
Several other vehicle industry professionals apply on the same form as auto dealers, but do not pay the same fees or need to purchase a surety bond. These professions include the following:
- Boat dealer
- ATV dealer
- Yacht broker
Boat dealers buy, sell or trade only boats; ATV dealers buy, sell or trade only ATVs. Transporters are given plates that allow the limited operation of some vehicles for delivery, repair or improvements. If an applicant is applying for transporter plates, they must include a written statement detailing why transporter plates are necessary. Yacht brokers are agents for either the buyer or seller of a boat.
Any vehicle dealers that sell only vehicles over 10,000 pounds, trailers, motorcycles or snowmobiles are also exempt from the surety bond requirement. Those applying to these auto industry professions should contact Vehicle Safety Services at (518) 474-0919 for the correct fees.
Vehicle Inspection Station
Vehicle inspection stations perform car inspections as required by New York law. Their application requires them to specify what kind of station they will operate:
- Public inspection station—performs inspections for the general public
- Dealer inspection station—applicant must have dealer registration; performs inspections only on dealership and employee-owned vehicles
- Fleet inspection station—business with more than 25 vehicles registered to its name; can perform inspections only on business and employee-owned vehicles
Applicants have the option to register to inspect motorcycles and conduct diesel emissions testing, and must also specify the types of vehicles their station is equipped to inspect. They must include a $125 check for application and business fees with their application, and thoroughly review the checklist attached to it to ensure they have included all necessary information.
Auto Repair Shop
Auto repair shops are, of course, a vital part of New York’s auto industry. Repair shops can be one of four types, to be specified on the application:
- Repair shop
- Body repair shop (over 50% of repairs done are body repairs)
- Mobile repair shop
- Drive-in appraisal
Applicants must indicate if a repair shop will dispose of vehicular scrap like transmissions, engines, noses, frames and bodies. They must provide the names and contact information of scrap processors they will work with.
Zoning approval, in the form of a certificate of occupancy, a local license or a letter from a local authority, is required for repair and body repair shops and must be included with the application. Applicants can provide proof that a repair shop is currently or was operating at the location of the new repair shop in place of the zoning approval. A $160 fee must be submitted along with the application.
There are many ways you can get involved in the auto industry in New York, and this list touches on only a few. Contact the DMV for more information on which type of business is the best choice for you. When you need a surety bond in New York, get in touch with the experts at SuretyBonds.com.