How to Obtain a Car Dealer License: A Step-by-Step Guide
If you're interested in selling motor vehicles legally, it's likely that your state will require you to become licensed. Although each state will have their own unique requirements to get your auto dealer license, you can get a general idea of the steps you'll need to take to get your license in most states below.
If you'd like to determine your state's licensing requirements, take a look at our comprehensive guide further down which offers state specific guides for getting your dealer license (you can also download the free e-book version of our dealer license guide).
Whether you need a wholesale car dealer license or a used car dealer license, our guides will outline the exact steps you must take to get licensed.
Auto Dealer License Process: Step-By-Step Guide
Step #1: Choose Your Car Dealership Type
Each state has their own unique requirements in order to get an auto dealer license, and they will vary depending on your exact location/the license type you need. Some of the most common auto dealer license types are:
- New vehicle dealer license
- Used vehicle dealer license
- Wholesale vehicle dealer license
As mentioned above, requirements for getting a license can be drastically different across each state. For example, some states may require a separate used car dealer license, new auto dealer license, wholesale car dealer license or auto broker license depending on the type of vehicles you want to sell, how many you plan on selling and whether you want to conduct business as a dealer or broker. However, there are other states that may only require one license.
You have two options when it comes to determining the exact auto dealer license requirements you need to meet:
- Option #1: Research/contact your state's DMV or licensing department, and determine the licensing requirements you must meet. This method is often time consuming, as many states make it difficult to find the necessary licensing information online.
- Option #2: As an alternative to researching your state's requirements on your own, you can find out the exact requirements you must meet to become licensed by selecting your state below.
Step #2: Determine and Meet All Necessary Requirements
Once you have determined the requirements for your state and license type, you need to take the proper steps to satisfy them. Some of the common requirements you'll have to meet can include:
- Attend pre-licensing dealer training
- Meet zoning requirements
- Obtaining a permanent business location
- Obtaining liability insurance
- Submitting a criminal record check
- Arranging a place of business inspection
As stated above, the requirements you must meet will vary depending on your state, and the exact license you need. Select your state below to find the exact requirements you must meet to obtain your dealer license.
Step #3: Obtain Your Auto Dealer Bond
The cost of an 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.
- 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).
This is the one requirement that most states have in place, and you'll likely need your bond in order to submit your license application. An auto dealer bond protects your clients by ensuring you'll follow the regulations set by your state. You'll want to ensure you get your bond from an auto dealer bond expert to avoid any headaches or delays.
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Step #4: Submit Your Auto Dealer License Application
Your state's DMV or licensing division will provide you the necessary applications and paperwork that you'll need to fill out. Simply complete the application and other related paperwork, and send it in to the DMV along with your auto dealer bond. Be sure to double check all of your information before submitting it, as errors will likely increase turn around time for your licensing approval.
Step #5: Receive Your Car Dealer License
Once you submit all the required information, your state will review your application, and if approved, will send your license directly to you. This process may take a few weeks depending on your state.