Rhode Island Auto Dealer License Guide

Dealer licenses in Rhode Island are issued by the Department of Revenue, Division of Motor Vehicles. There is only one type of dealer license, but new dealers must specify on their application whether they will sell only new vehicles, used vehicles, both new and used vehicles, or motorcycles and mopeds.

If you sell four vehicles or more in 1 year.

Your location must have:

• A building with at least 2,400 square feet of enclosed floor space exclusively used for the selling and repairing of vehicles
• At least 2,400 square feet of outdoor lot space
• A business sign of at least 24 square feet in size
• A working business telephone

After you obtain your dealer license, it must be posted in a publicly accessible spot within your building.

• First,your dealership's name must be approved by the Rhode Island Dealers' License & Hearing Board.
• After an investigator has reviewed your application, you must make an appointment with the secretary (phone: 401-462-5732) to finalize the approval.

• Franchise dealers must first comply with Rhode Island General Law § 31-5.1-4.2, which requires you to have a letter of intent from the manufacturer(s) or distributor(s) whose vehicles you wish to sell. If the DMV receives no protests during the allotted 30-day protest period, you may then file for the application.
• Used vehicle dealers in certain cities and towns must obtain a second hand license to sell used vehicles. The license must accompany your application. The list of cities that currently require the license can be found on the last page of the dealer application.

You will need a financial statement prepared by a certified public accountant (CPA), signed and notarized, and accompanied by an approved line of credit for fifty thousand dollars ($50,000) from a financial institution, in the dealer’s name.

The cost of a Rhode Island auto dealer bond is a small percentage of the total bond amount. The bond cost varies depending on your financial strength, e.g. personal credit. You can also take a look at our most frequently asked surety bond questions.

• Fill out our online application form to obtain a free bond quote for your auto dealer license. It takes 5 minutes and you will be able to lock your rate for the next 90 days (in case you want to purchase the bond).

Dealers in Rhode Island are required to obtain a surety bond before becoming licensed.

Bond Amount Required: $50,000

Your application must include:

• An Employee Report listing all current employees and their driver's license numbers
• BCI Authorization form for each owner, partner or corporate officer
• Approved $50,000 line of credit from a financial institution in the dealer's name
• Copy of a formal lease agreement issued to the dealership (for a one-year minimum) or a copy of the deed, if the property is owned by the dealership.  The copy must state the total area of the building and lot and be signed and notarized.

• Copy of city/town license, or a letter of zoning approval from the city or town approving the sales of motor vehicles at the proposed dealership address
• Four pictures of the outside of building from all angles, including the entire building and lot

Your application will be investigated and scheduled for a hearing before the Dealer’s Hearing Board. The license fee is payable only after approval of your application. If you are granted a license, the following documents must be received within 30 days in order to finalize the application and issue the license:

• A picture of your business sign which must display your dealership's name
• A $301.50 license fee (this can be a check or money order and must be made payable to "Dealers' License & Regulation Office")
• Your business’ telephone number
• Proof that you have dealer plate insurance coverage

Submit your application to:

State of Rhode Island

Division of Motor Vehicles

Dealers' License and Regulation Office

600 New London Avenue

Cranston, RI 02920-3024

Phone: 401-462-5733

Fax: 401-462-5789

Auto Dealer Insurance

There are several types of insurance coverages that are recommended for auto dealers, but the recommended coverage will vary based on your business and personal needs.

If you’d like to learn more about all of the insurance coverages available to you, please read our auto dealer insurance guide.