auto dealer license

How to Get an Auto Dealer License

This auto dealer license guide is for informational purposes only. does not regulate or manage licensing for auto dealers. Contact your obligee for the latest official requirements.

Each state requires auto dealers to meet licensing and bonding requirements to buy and sell cars. Your specific auto dealer license will depend on the size of dealership you plan to operate and the types of vehicles you plan to sell. 

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Common types of auto dealer licenses include:

  • Wholesale Dealer License: Required to sell cars to retailers 
  • Franchiser Dealer License: Required to sell cars to consumers. Your state may require separate used and new car dealer licenses
  • Miscellaneous Dealer License: Dealers who sell motorcycles, boats, snowmobiles and other off-highway vehicles have special licensing requirements

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How Much Does a Car Dealer License Cost? 

There are usually three primary car dealer licensing fees: 

  • Initial application fee: One-time fee submitted with application and documentation. This usually ranges from $175 to $700. 
  • License plate fees: Generally $50 to $100 per plate the dealership needs. 
  • Renewal fee: Charged at the end of each term to keep the license active. Most renewal fees range from $40 to $400. 

You can expect to pay roughly $225–$800 for your initial car dealer license fees. Exact pricing varies by state and license type. 

How to Get an Auto Dealer License in 9 Steps 

1. Research local licensing requirements 

Each state has unique dealer licensing requirements. Contact your local licensing agency for their specific requirements, processes and forms. 

Visit our License Guide Library for more detailed information on becoming an auto dealer in specific states. 

2. Determine your business structure 

Decide how you will legally structure your dealership. This may impact the registration forms for your dealer license. Common structures for car dealerships include the following: 

  • Sole Proprietorships 
  • Partnerships 
  • Limited Liability Corporations
  • Franchises
  • Corporations

3. Complete your state’s licensing application 

Fill out the required sections of your application and other documentation. Then, submit your license application either online or via mail based on your licensing authority’s instructions. 

4. File a surety bond 

Auto dealer bond amounts vary by location. However, you can expect your bond amount to be between $25,000 and $100,000. Your surety bond will likely cost 1–4% of your required amount. For example, highly qualified applicants will often pay $100–$400 for a $10,000 auto dealer bond. 

Visit our Auto Dealer Bond Guide to find specific bond information for your state.

5. Purchase business insurance

Dealerships typically need general liability insurance policies for vehicles, garage and bodily injury. Find a local agent in your area to get quotes and coverage to meet the state’s license requirements. 

6. Provide proof of your physical business location

Verify your location for the licensing authority with a copy of the deed or leasing agreement. If required, submit photos of your business. You may need to meet requirements regarding specifics about the size and type of building, signage, furnishings and more. 

7. Submit fingerprints for a background check

Complete a background check to prove you have a clear criminal record. This is usually done by uploading fingerprints through your local Department of Motor Vehicles system. 

8. Complete pre-licensing training

Many states will require you to provide proof of completion of an online education course and/or exam to ensure you are qualified to operate the business. 

9. Pay registration fees

You must pay the licensing authority all fees before your application will be approved. This includes the initial application fee and license plate fees mentioned above. After initial licensing, you will be required to pay your renewal fee at the end of each term.

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How Do I Renew My Auto Dealer License? 

Renew your auto dealer license before the end of its term to guarantee it stays valid. This could occur once a year or every two years, based on the conditions of your license. Work with your local DMV or other licensing agency to complete the renewal process. 

Get Your Dealer License Bond Today helps you get bonded easier and faster than any other surety company! Visit our auto dealer bond guide today to find your bond and begin the bonding process.

More Resources 

Last Updated: April 24, 2024

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