Licensing of auto dealers in Massachusetts is regulated at state level but conducted on the municipal level. You’ll have to contact your city clerk’s office (or the Boston Police if you’re in Boston: this application is available online) to check their exact requirements, including which type of license you’ll need, but here is a general outline of the steps required. For more information about Massachusetts licensing, check out the Registry of Motor Vehicles Dealer FAQ.
Determine Which Type of License You Need:
- Class I: New and/or used vehicle dealer
- Class II: Used vehicle dealer only
- Class lll: Salvage parts/Junk
Obtain a Permanent Business Location
This location must include a separate business office on the premises. It must also maintain a record book for used cars approved by the Registry of Motor Vehicles, and post a sign displaying the type of business.
Compile the Required Documents
You’ll need to provide the following documents with your application:
- Zoning Application Form
- Articles of Organization
- Franchise Agreement(s) (if applying for a Class I dealer license)
- Purchase and Sale Agreement
- Lease Agreement (if applicable)
- Worker's Compensation Insurance Affidavit
- Affidavit (if applying for a Class II wholesale license)
Obtain Your Auto Dealer Bond
Getting bonded is an important part of the licensing requirement. Your license bond assures the government and your customers that you will abide by the rules and regulations.
Bond Amount Required: $25,000
Submit Your Dealer License Application
You should obtain your application from the relevant municipal authority, often the city clerk’s office. This is also where you should submit your completed application and all supporting documentation.
Fees: The fees will be set by the municipality. The main application fee shouldn’t exceed $200.