How Do I Get an Auto Dealer License in Alabama? 

The Department of Revenue – Motor Vehicle Division (ALDOR) oversees auto dealer licensure and compliance with Alabama Code Title 40, Chapter 12, Article 8. Follow these 10 steps to apply for your Alabama dealer license.

Step 1: Determine your license type

Your application will vary depending on your motor vehicle dealer license type:

• Used dealer: Selling used vehicles to the public
• New dealer: Selling new vehicles to the public
• Rebuilder: Making extensive vehicle repairs that may require a new VIN
• Wholesaler: Buying vehicles at wholesale to sell to dealers
• Master dealer: Can conduct business in any of these categories

Step 2: Establish a place of business

You don’t have to be an Alabama resident to apply for an auto dealer license. However, you do need a physical place of business in the state. Establish a permanent address for your dealership.

Step 3: Register your business

Define your business’s legal structure. Then, register your business with the Secretary of State and get your Alabama sales tax number.

If you choose a structure other than a sole proprietorship, you also need a Federal Employer Identification Number (FEIN).

Step 4: Purchase a surety bond

Next, purchase a $50,000 auto dealer bond. This is a financial guarantee that you’ll uphold state regulations.

Apply online for your free Alabama motor vehicle dealer bond quote today. With SuretyBonds.com, rates start at just $349. 

Step 5: Get liability insurance 

Purchase a blanket liability insurance policy for all vehicles owned that meets the following minimum coverage limits:

• $25,000 bodily injury/person/accident
• $50,000 combined bodily injury/accident
• $25,000 property damage/accident or a combined single limit of $75,000/accident

Step 6: Complete the license application

Complete the application for your specific license type on the Alabama MyDMV online portal. Pay the $125 fee. 

Step 7: Submit supporting documents

After completing the application, you’ll receive a transmittal sheet in the online portal. The sheet will outline the following supporting documents needed:

• Proof of surety bond and insurance
• Proof of permanent business location and business IDs
• Proof of business registration
• Photos of the business location (including the building, proper signage, hours of operation, and vehicle lot)
• Proof of power for the business location
• Zoning letter (if the building is in a residential area)

Mail the documents to the address below:

Motor Vehicle Licensing

P.O. Box 327643

Montgomery, AL 36132-7643

The ALDOR may take 3-5 business days to process your application. Once approved, you will receive an email with your official, printable license. 

Step 8: Become a designated agent 

All dealers, except wholesalers, must become designated agents. Complete the designated agent application in your MyDMV portal and attend a training class.

Step 9: Get a business privilege license

In Alabama, dealerships also need a business privilege license issued by the local county Probate Judge or License Commissioner. License fees vary by county.

Step 10: Apply for dealer plates

Finally, purchase dealer plates for all vehicles in your lot. Apply online in your MyDMV account. 

The ALDOR limits dealers to a certain number of combined dealer and motorcycle plates depending on your license type:

• New motor vehicle dealer: 35 plates
• Used motor vehicle dealers: 5 plates
• High-volume dealers: If you processed 300 or more title transfers in the past year, you can purchase an additional 25 plates

How to Renew Your Vehicle Dealer License

Alabama motor vehicle dealer licenses expire annually on September 30th. Complete the renewal application in your MyDMV portal and pay the $125 fee. Upload proof of up-to-date surety bond and insurance policies.

Alabama auto dealer bonds also expire annually. If you work with SuretyBonds.com, we’ll send you reminders and a renewal invoice before your bond expires. To renew your bond, all you need to do is pay the premium.