Do you want to start a car auction business in USA? If YES, here is how to get a car auction license without a lot in Texas, California, Florida, Michigan, Maryland.

If you are looking towards getting a car auction license, it means that you are set to start a business in the car dealership industry and it wouldn’t be out of place for you to get a full grasp of the industry you are aiming towards getting a license from.

Advantages of Getting a Car Auction License

The truth is that the advantages of getting a car auction license in the US is enormous and here are some of them;

  • A car auction license gives you the opportunity to go into private wholesale dealer auctions only dealers can go to – same auctions that all used car dealers get cars from, including mega-used car dealerships!
  • With a car auction license, you can go directly to new-car dealerships to buy wholesale cars with “closed bids”
  • With a car auction license, you can take the advantage of purchasing wholesale cars for yourself, your friends and family members.
  • As a car auction licensee, you don’t have a state limit to how many cars you can sell per year.
  • You will own and drive around dealer cars with customized dealer license plates.
  • It gives you leverage in the industry hence you will be able to multiply your turnover
  • Owning a car auction license as a small business owner qualifies you to get gold corporate credit cards, small-business loans and other fringe benefits.
  • Your car auction license qualifies you to export cars outside of the United States of America
  • As a car auction licensee, you can get tax rebate
  • With a car auction license, you can become a legal auto broker in the United States
  • As a car auction licensee, you are qualified to get dealer discounts and make tax-free purchases from almost any business including factory car dealers and parts stores.

Important Facts About Getting a Car Auction License in USA

Players in the car dealership industry sell and buy both brand new and used cars and they may fall in any of the following niche area; brick and mortar cars dealership shop, online used cars dealership shop, locally produced car dealership shop, imported car dealership shop, luxury car dealership business and multi – brand and multi – maker car dealership.

Recent statistics has it that the total annual revenue for used car dealership in the United States of America is US$370 billion with an annual growth of 2.4 percent. With massive annual sales of nearly US$370 billion, one can confidently say that the used vehicle dealership industry represents almost half of the United States’ auto retail market and it is of course the largest retail segment of the U.S. economy.

For instance, in 2005, approximately 44 million used cars were sold in the United States, which is more than double of the nearly 17 million new cars sold. The average price of used cars in the United States is $8,786. The industry has 127,940 registered car dealership businesses that employ a total of 237,788 people.

In the United States used car dealership market, the top four major players account for less than 20.0 percent of industry revenue in 2015, with the biggest used car dealer, CarMax dealership, generating about 12.6 percent of revenue. Recent findings also indicated that the industry concentration has increased over the last five years prior to 2015.

The automotive industry with reference to used cars dealership is indeed flourishing because more and more consumers are becoming aware of the need to cut unnecessary spending when purchasing cars and insurance policies.

Experts projected that in 2017, the used car dealership industry is expected to profit from growing global economic conditions. Per capita income levels have scaled across the globe and the growing middle class in emerging economies have looked to purchase their own cars. As the demand for used cars increase, used car dealership garages will make more sales.

A decline in demand for new automobiles has stimulated increase sale of used cars, as operators were able to increase sales. Steady growth in economic conditions will create avenues for consumers to release pent-up demand for used cars, hence the increase in demand for upstream supplies

One notable trend in the used car dealership industry is that most used car dealers are leveraging on online store to sell their used cars to a large market. As a matter of fact, it is easier to sell and export used cars from the United States and Canada to countries in Africa.

Starting The Process of Getting a Car Auction License in USA

Every state in the USA makes it compulsory to obtain a car auction license before you can participate in car auctions in any part of the country. It might interest you to note that obtaining a vehicle dealership license involves several steps and forms. If you are not careful, you risk the possibility of having your application denied.

If you don’t want your application to be denied, then you must determine the category of car auction license you need for your business, and it could either be;

  • Franchise Dealer License

Franchise dealer license gives you the opportunity to sell new motor vehicles under an agreement with a manufacturer. It also permits the licensee to sell used motor vehicles. The license also gives you the privilege to service the makes of vehicle that they sell.

  • Independent Dealer License

If you have an Independent Dealer License, you will be able to buy and sell used motor vehicles at the retail or wholesale level.

  • Wholesale Dealer License

Obtaining a wholesale dealer license gives you the right to buy, sell and deal in motor vehicles exclusively wholesale or with motor vehicle auctions.

Generally, the process of getting your license involves purchasing a car dealer bond which is also known as a motor vehicle dealer bond or an auto dealer bond and you can get information about this from your local DMV (Department of Motor Vehicles) or DOL (Department of Licensing).

You are expected to fulfill the condition as stipulated by your state and then register your business, meet the zoning requirements, attend a pre-licensing seminar, provide proof of insurance and of course pass a background check.

Other standard steps that you are expected to follow through before getting your car auction license in the United States of America is filling of a car dealer license application, purchase Motor Vehicle Dealer Bond, and lastly, submit your car dealer license application alongside your other necessary papers to your local DMV or Auto Dealer Licensing Service Department and wait for feedback.

You will be contacted to come collect your car auction license once it is out. Please note that every state may decide to come up with its own specific requirement hence the need for this article.

How to Get a Used Car Auction License Without a Lot in USA

1. Alabama

In the state of Alabama, if you are interested in selling new or used vehicles, wholesale or rebuilders, you must be licensed as a dealer and the cost for each category of regulatory license is $25. If you intend applying for car auction license in Alabama, you must:

  • Complete an application form.
  • Obtain a surety bond (available from your insurance agent) in the amount of $25,000 for a dealer license.
  • Purchase blanket liability insurance for all vehicles connected with the business. The current insurance certificate must be submitted with your license application and must include specific information. If the coverage is cancelled or not renewed before the expiration date, your dealer license will be revoked.
  • Obtain a sales tax number online or by mail in the same name as your business.
  • Obtain a permanent business location with a verifiable phone listing.
  • Take photographs of your business sign and location. You may use a digital camera, but the pictures must be printed on photographic paper, and not copier paper. Be sure to adhere to the photo and sign requirements.
  • Pay the appropriate fees, based on your city’s population
  • Auto Dealer Bond

2. Arizona

In Arizona, the process of getting a car auction license starts with forwarding applications to the Arizona Department of Transportation (ADOT). Interestingly, the application process is fairly extensive, requiring various completed forms, bond purchases, and criminal background checks.

Arizona makes available—and requires, depending on your situation—several motor vehicle dealer licenses. It could be New Car Dealer or Used Car Dealer. If you are interested in applying for an AZ Car Dealer License, you will need to:

  • Complete a Motor Vehicle Dealer Application (Form 46-0408).
  • Provide your fingerprint cards (Form FD-258) in an envelope sealed by the fingerprint technician.
  • Provide any other applicable required documents.
  • Pay the $15 filing fee and $22 background check fee (per applicant).

Please be informed that ADOT requires a criminal record check for each applicant and partner. You can request a fingerprint card online and bring it to an approved fingerprinting location.

Note that your application will be denied if you’ve been convicted of fraud or an auto-related felony within the last 10 years OR any type of felony within the last 5 years. If you are done filling your application form, you can post the application and all associated documents and fees to:

Motor Vehicle Division

Dealer Licensing Unit

P.O. Box 2100

MD 552M

Phoenix, AZ 85001

3. California

If you want to get a Car Auction License in California, you would need to visit The California and the Occupational Licensing Section. This is the department that oversees all dealer license applications. In California you would need new car dealer license to sell new and used motor vehicles. But if you apply for a used car dealer license you can only sell used motor vehicles.

The Department of Motor Vehicles (DMV) requires all CA dealer license applicants to undergo a criminal background check. If you’ve ever received an arrest conviction, you may want to start by submitting an abbreviated application. Though it comes with a $175 fee, an abbreviated application could save you a lot of time, money, and stress in the future.

The full application process requires purchasing a surety bond, setting up an insurance policy, and establishing a place of business. Depending on the circumstances, a conviction on your record could result in a denied application, meaning you’d have to rescind all previous preparations you made for the full application process. Please note that in California, all used car dealer license applicants must complete a pre-licensing training course.

4. Connecticut

If you are interested in getting a car auction license in Connecticut, then you must be approved by local authorities in the city or town where you plan to locate the dealership. Contact your municipal licensing authority for details. You must also make sure you meet state requirements. These are the requirements if you want to apply for a new car dealer license:

  • An area for display and storage of new and used cars.
  • A repair department able to hold 1 vehicle.
  • A parts department and an office that can be used for business with the public.
  • A contract or franchise agreement with a manufacturer.
  • At least 1 mechanic qualified to service and repair vehicles sold by the dealer.

If you are applying for a used car dealer license, you must have:

  • An area for display and storage of at least 2 used cars.
  • A repair department able to hold 1 vehicle.
  • A parts department and an office that can be used for business with the public.
  • At least 1 mechanic qualified to service and repair vehicles sold by the dealer.

If you want to forward an application to the Connecticut DMV for a dealer/repair license. The following items must be submitted with the application:

  • Proof of insurance.
  • Sales tax permit number.
  • Surety bond of $50,000 for each dealer license and $5,000 for each repair license.
  • An application fee of $140.
  • Application for dealer plates.
  • Application for inspection.
  • Articles of incorporation/operating agreements/owner information.

Once you are done with the application package you either post it or go to their office to submit it in person to the following address:

Business Licensing Unit

60 State St.

Wethersfield, CT 06161

You are expected to also pay the required Dealer Licensing Fees and below are the specific fees;

  • Examination fee (new locations only): $280.
  • Application fee (all licenses): $140.
  • New dealer license: $700.
  • Used dealer license: $560.
  • Repairer license (including limited repairer): $340.
  • Registration fee per plate (per vehicle): $140.
  • Safety fee (per plate): $5.
  • Special dealer registration plates: Same as the full commercial rate.

5. Florida

In Florida, motor vehicle dealers are licensed and regulated by the Division of Motorist Services under Section 320.27, Florida Statutes. The state also provides a general guide for auto dealers. If you chose Florida as the state you want to get your car auction license, then the following licensing steps applies to you;

  • Attend a Pre-Licensing Dealer Training Course
  • Obtain a Permanent Business Location
  • Compile the Required Documents
  • Obtain Proof of Liability Insurance
  • Obtain Your Auto Dealer Bond
  • Submit Your Dealer License Application

You are expected to compile the following documents:

  • A copy of registration of business and/or fictitious trade name(s) with Florida’s Secretary of State, Division of Corporations (available online at www.sunbiz.org)
  • If the dealership is a corporation, the Articles of Incorporation, copies of corporate papers and corporate meeting minutes showing the election of corporate directors
  • If the dealership is a limited liability company, the Articles of Organization and Operating Agreement
  • If the dealership is a partnership, the Partnership Agreement
  • A sales tax number, available through the State of Florida, Department of Revenue
  • A federal employer identification number, available from the IRS.
  • Fingerprints and applicable fees ($54.25 per person)
  • Obtain Proof of Liability Insurance Independent, Auction, Wholesale, and Salvage dealers all have the option to submit a copy of a certificate for garage liability insurance or, alternatively, an insurance policy for general liability along with a business automobile policy. That policy must cover:
  • $25,000 in combined single-limit liability coverage. This must include bodily injury and property damage protection
  • $10,000 in personal injury protection is also required

Once you are done, you can submit your Dealer License Application Fill out and submit your application (the form is called a HSMV 86056) with all required additional documents. Fees (all checks must be payable to DHSMV):

  • For motor vehicle dealers, the fee is $300
  • For mobile home or recreational vehicle dealers, the fee is $340

Lastly, if all documents are in order, the license will be submitted to and issued by the Motor Vehicle Field Operations, Regional Office. At the same time, the electronic fingerprints submitted with the application will be processed through the Florida Department of Law Enforcement and the Federal Bureau of Investigation. Normal processing time is five business days.

6. Georgia

In Georgia, there are different category of car auction license and you need to visit the Georgia Secretary of State (SOS) to get the requirements.

Note that in Georgia, You DO need a car dealer license if you’re selling OR attempting to sell vehicles with the intent to make a profit, regardless of how many cars you’ve sold. However, you DO NOT need a dealer license to sell your own personal vehicle titled in your name.

Before submitting an application for a GA independent dealer license, you’ll need to: Complete a used car dealer training course—the Georgia SOS provides a list of approved education providers.

A representative from the Secretary of State’s Professional Licensing Boards Division will inspect your proposed business location before approving your license—DO NOT submit your application packet until your business location meets the requirements outlined above.

If you are applying for a car auction license or a Georgia independent dealer license, your application should include:

  • A completed Used Motor Vehicle Dealers License Application (REV 2018).
  • The $170 application fee.
  • Make checks payable to the Used Motor Vehicle Dealer Board.
  • A copy of a “secure and verifiable” document to prove your age and citizenship.
  • The original $35,000 surety bond with attached Power of Attorney.
  • An original certificate of garage liability insurance on an Acord Form—your insurance company provides this.
  • Your sales tax number OR a copy of your sales tax application.
  • Photographs of your building’s (Interior, Exterior and Signage)
  • The zoning compliance certificate, to be completed by the county zoning commissioner.
  • The application packet includes the required zoning paperwork.
  • Proof of attending pre-licensing used car dealer training.
  • Your fingerprint scan required for the criminal background check.

When you are done filling the form, you can mail your independent dealer license packet to:

Georgia Secretary of State

Professional Licensing Boards Division

237 Coliseum Dr.

Macon, GA 31217

Please be aware that it will take 30 days to receive your license. You can check your license status using the Georgia Secretary of State’s online lookup/verification service. GA independent dealer licenses expire every 2 years on March 31 of even-numbered years.

7. Illinois

In Illinois, if you are interested in buying and selling cars, that you would need an Illinois motor vehicle dealer license if ANY of the following apply to you:

  • You’re engaged in selling at least 5 motor vehicles in 1 year (on consignment or otherwise).
  • You work as an agent, broker, or intermediary for a licensed dealer or purchaser.
  • You advertise/represent yourself as an active or future motor vehicle seller.

Please note that there are a few different steps involved in the application process for an Illinois dealer license. Usually, the Illinois Dealer/Remitter Licensing Section provides the following dealer documents online:

  • Dealer License Application (Form VSD 324.18).
  • Instructions for Dealer License (Form VSD 659.7).
  • Regulations for Vehicle Dealers (Form RT DS 21.16).

You are expected to submit your applications and fees to;

Illinois Secretary of State

Dealer/Remitter Licensing Section

501 S. Second St.

Room 069

Springfield, IL 62756

Below is a basic outline of the items you must provide to apply for your IL car dealer license: If this is the 1st time you’re applying for a dealer license, proof you completed the dealer training program.

  • Contact SOS at (217) 785-2050 for information on registering for a class.
  • The notice of proper zoning.
  • A copy of the city business license is sufficient for car dealerships in Chicago.
  • A copy of:
  • The location’s lease, if applicable.
  • Your franchise agreement if you’re selling new vehicles.
  • Proof you have (or have applied for) a hazardous waste generator number, if your dealership has a repair shop.
  • The receipt from your criminal background check.

You can contact the Illinois State Police Bureau of Investigations at (815) 740-5160 for a list of approved live-scan fingerprint vendors. The Certificate of Insurance that includes:

  • $100,000 for bodily injury.
  • $300,000 for each accident.
  • $50,000 for property damage.
  • The original $20,000 vehicle dealer’s bond OR certificate of deposit.
  • The applicable dealer licensing fee(s).

8. Maryland

If you want to obtain your car auction license in Maryland, you would need to visit the Maryland BLCS. The Maryland BLCS provides several kinds of motor vehicle licenses, including (but not limited to) licenses for:

  • Selling new or used cars.
  • Buying or selling new or used motorcycles.
  • Selling emergency vehicles.
  • Buying, selling, and/or exchanging vehicles to other dealers on wholesale terms.
  • Dismantling, destroying, and/or scrapping vehicles to sell their parts.

Please note that the requirements for dealer license applications vary depending on the type of license. The general requirements include:

  • A completed dealer license application.
  • A zoning approval completed by a county zoning board official where your dealership is located.
  • A letter from the MD Department of Assessments and Taxation certifying that you’re registered to do business in the state under the name(s) on your application.
  • A completed car dealership inspection.
  • The packet includes a site inspection checklist explaining everything you need for your business to pass.
  • Dealer orientation request.
  • Refer to the state’s list of current dealer orientation classes.
  • Contract with an Electronic Registration and Titling (ERT) provider.
  • Criminal background check.
  • A surety bond.
  • Proof of worker’s compensation, if applicable.
  • A copy of your trader’s license from the circuit court where your dealership is located.
  • Your permit for use and occupancy if you’re using a trailer as an office.
  • If you’re applying for a new car dealer license, the franchise agreements from each vehicle manufacturer.
  • Payment for any applicable dealer license fees.

9. Massachusetts

In Massachusetts, dealer licenses are issued on the city and town level at municipal offices. This means the process for obtaining your MA dealer license will differ from municipality to municipality.

  • MA Car Dealer Classes

Section 58 of the Massachusetts General Laws gives detailed explanations of Massachusetts’ different dealer licenses; we’ve given you a basic outline below.

Class 1 Dealer License

  • You would need a Class 1 Massachusetts dealer license if you’re selling new motor vehicles.
  • As a new motor vehicle dealer:
  • Your primary business must be selling new motor vehicles.
  • Purchasing or selling used vehicles must be secondary.
  • You must be recognized as an agent AND have a contract with the manufacturer(s) of the vehicles(s) you sell.
  • Your car dealership must have repair facilities on site to repair vehicles under warranty.

Class 2 MA Dealer License

  • You need a Class 2 dealer license if your primary business is selling used motor vehicles.
  • As a Class 2 licensee, you must post a $25,000 surety bond OR an equivalent proof of financial responsibility approved by your local business licensing authority.

Class 3 Massachusetts Dealer License

  • You need a Class 3 motor vehicle license—or, a “junk license”—if your primary business is:
  • Buying used motor vehicles to remodel, take apart, or rebuild and sell.
  • Buying or selling used parts or tires.
  • Assembling used motor vehicle parts.

In Massachusetts, application requirements will vary depending on where you are applying and what type of dealer license and in general, you’ll need to provide the following items when applying for your Massachusetts car dealer license:

  • A zoning application form.

The applicable Articles/Certificate of Organization OR registration if your business will be a:

  • Limited liability company.
  • Limited liability partnership.
  • If you’ll operate under a trade name, a copy of your business certificate from your local licensing board.
  • Your employer tax identification number.
  • A purchase and sale agreement.
  • Your lease agreement (if applicable).
  • A worker’s compensation insurance affidavit.
  • Photographs of your business’:
  • Overall property.
  • Vehicles/trailers.

If you’re a:

  • Class 1 dealer, your franchise agreement(s).
  • Class 2 dealer, proof of your $25,000 Surety Bond.
  • Payment for your municipality’s dealer licensing fees.

10. Nevada

In Nevada, you are expected to apply and obtain a vehicle dealer license if you do any of the following with vehicles that are subject to registration, for compensation (commission, brokerage fees, financial profit, etc.):

  • Sell, negotiate, or attempt to negotiate sales.
  • Display vehicles for sale.
  • Exchange, trade, and/or buy cars with the intention to sell them.

Interestingly, you will not need a car auction license in Nevada if;

  • You sell 3 personally owned vehicles at most over a period of 12 months. For example, you sell your own car to a private third-party buyer.
  • You come into possession of a vehicle as a result of a legal contract.
  • You sell or deliver vehicles outside the United States and make under 5% of vehicles’ total gross revenue.
  • You work for a licensed car dealer (e.g. as a salesperson).
  • Sell only kit trailers.

The NV DMV provides a Business License Application Packet (Form OBL335) for dealers, lessors, manufacturers, distributors, and rebuilders. Within this packet are the forms and other application requirements you must complete and submit to your nearest business license office:

  • An Application for Business License and Garage Registration (Form OBL237).
  • A Personal History Questionnaire (Form OBL242).
  • A Fingerprint Background Waiver (Form OBL 256).
  • You must provide 1 set of fingerprints from each principal applicant.
  • Obtain your fingerprints from an authorized NV DMV representative or law enforcement agency—always call ahead to confirm availability and fees.

A Vehicle Industry Business License Bond (Form OBL210) OR a deposit (in lieu of a bond) in the amount applicable to the type of vehicles you’ll sell:

  • Utility trailers or boat trailers that weigh up to 3,500 lbs.: $10,000.
  • Motorcycles, horse trailers (without living quarters), and utility trailers that weigh 3,501 lbs. or more: $50,000.
  • All other types of vehicles: $100,000.
  • Proof of insurance showing you have the required amount of liability coverage.
  • Your business license from the city or county in which your dealership is located.
  • Your fictitious firm name filing (if applicable).
  • A copy of the Certificate of Incorporation and Corporate that you filed with the Nevada Secretary of State (if applicable).
  • Your business’ federal identification number (FEIN).
  • Your business’ email address.
  • 2 color photographs that show the exterior of the business and its signage.
  • A Dealer Franchise Certification (Form OBL253) IF you’re applying to be a New vehicle dealer.
  • Payment for the applicable fees:
  • Fingerprint processing: $36.25 per principal.
  • Dealer license application: $126.

Please note that when you submit your application for, an authorized representative from the NV Department of Motor Vehicles will inspect your business location.

11. New Jersey

Please note that you are likely going to be needing a New Jersey dealer license if you plan to be in the business of car auctioning.

The New Jersey Motor Vehicle Commission (MVC) Business Licensing Services Bureau issues licenses based on the kind(s) of vehicle(s) you’ll be dealing with and it could be New and used cars, Used cars only, Leased vehicle and Boats. If you want to apply for a New Jersey new and/or used car dealer license (and/or a long-term leasing license, if applicable), submit:

  • The applicable, completed dealer license application packet for a copy of their driver’s license.
  • A passport-sized color photograph (write the name of the person on the back of the photo).
  • For each signatory listed as an employee, include a copy of a document that verifies employment status such as a W-2, W-4, or pay stub.
  • A copy of:
  • The Incorporation/Formation Papers, listing the date you filed with the New Jersey Division of Revenue (DOR).
  • The Alternate/Fictitious Name Filing Certificate (if applicable) from the DOR.
  • Your property’s deed, purchase agreement, or lease.
  • The FEIN Certificate certifying you registered for a federal tax identification number.
  • The New Jersey Certificate of Authority for collecting sales tax.
  • Your business’ telephone bill or installation order to prove you have a working phone on the premises.
  • Pictures and plans depicting the entire premise and signage for the business.
  • If you’re applying to be a new car dealer, the original manufacturer certificate completed by the vehicle manufacturer.

Once you have completed your form, you can mail it to:

Motor Vehicle Commission

Business Licensing Services Bureau

Dealer Licensing Unit

P.O. Box 171

225 East State Street

Trenton, NJ 08666

Please note that when your application is received, an agent from the NJ Motor Vehicle Commission will come to inspect your business location.

So also, after successful completion of your application and inspection, you’ll receive a notification requesting payment for the dealer license and registration fees along with a certificate of insurance and a surety bond for $10,000.

12. New York

New York is one of those states that you can buy and sell cars at a smaller level without a car auction license, but there is a point when you can’t legally sell vehicles without becoming licensed as a retail dealer in New York. In New York you would need a car auction license if you:

  • Sell or offer for sale more than 5 motor vehicles, motorcycles, or trailers (excluding mobile home trailers) in 1 calendar year.

AND/OR

  • Display or allow the display of at least 3 motor vehicles, motorcycles, or trailers (excluding mobile home trailers) at any 1 time OR within any 1 calendar month on property you own or control.

If you are looking towards getting a car auction license in New York, then you are expected to submit the following:

  • A completed Original Facility Application (Form VS-1D).
  • Proof of your business name if your dealership will operate as a:
  • Corporation or LLC: Filing Receipt from the NYS Department of State.
  • Partnership or individual using an assumed name: “Business Certificate of Assumed Name” from the county clerk who’s local to your dealership location.
  • Copies of the driver licenses (or other government-issued identification) for all business owners, officers, and/or members.
  • A copy of your Certificate of Authority from the New York State Department of Taxation and Finance OR a valid NYS tax identification number.
  • You may need a federal employer identification number (FEIN) to fulfill this requirement.
  • Proof you have the proper workers’ compensation insurance coverage.
  • Business property ownership information; if you:
  • If you are the owner the premises: Copy of the deed, mortgage, or receipted tax bill.
  • Rent the premises: Copy of the rent or lease agreement AND copy of the deed, mortgage, or receipted tax bill from the property owner.
  • Receipts showing your purchased the dealer starter kit and required signs from an approved vendor.
  • Copy of the completed, sealed and signed Dealer Bond Under New York State Vehicle and Traffic Law Section 415(6-b) (Form VS-3) * for the following amounts if you sell in 1 calendar year:
  • Up to 50 motor vehicles (that are not new vehicles) as retail or wholesale: $20,000.
  • More than 50 motor vehicles (that are not new vehicles) as retail or wholesale: $100,000.
  • New (franchised) motor vehicles including passenger cars, light trucks, and SUVs: $50,000.
  • If you’ll sell new cars, the franchise agreement or letter of intent from the manufacturer.
  • Separate checks made payable to “Commissioner of Motor Vehicles” for each of the following retail dealer license fees:
  • $487.50 for the application and business fees.
  • $260 for the Retail Certificates of Sale you’ll receive after your dealership passes inspection.

After completing the application, then you can post your application, supporting documents, and fees to:

NYS DMV Bureau of Consumer and Facility Services

Application Unit

P.O. Box 2700

Albany, NY 12220

13. Ohio

In Ohio, You DO NOT need a used car dealer license if you are an individual who makes 5 sales of your own personal vehicles during a period of 12 months. However, you DO need a used car dealer license if you’re in the business of selling, displaying for sale, or offering for sale used motor vehicles as a retailer or wholesaler. Note that used car dealers in Ohio must:

  • Have a verifiable net worth of at least $75,000.
  • Establish and maintain a place of business that meets the physical characteristics the OH BMV requires of used car lots.

For a new car dealer license, note that you:

  • Don’t need a separate used car dealer license if you’ll sell used cars.
  • Need only to meet the BMV’s required physical characteristics for a new car dealership.
  • Must have a verifiable net worth of at least $75,000.

Generally, the OH BMV provides a comprehensive outline of dealer and dealership requirements in Motor Vehicle Dealer Licensing Information and Instructions (Form BMV 4323)—keep this form handy as you put together your application for an Ohio dealer license. Whether you are applying for used or new car dealership license, you are expected to provide:

  • The completed, appropriate application:
  • Used Motor Vehicle Dealer Application (Form BMV 4320).
  • New Motor Vehicle Dealer Application (Form BMV 4322.
  • Clear pictures of the car lot, interior and exterior of the office, and the business sign.
  • Payment for the applicable fees.

Depending on your situation, you might also need:

  • A Certificate of Compliance (Form BMV 4347) IF you have at least 2 dealerships operating at the same business location.
  • You’ll ALSO need to send a copy of this form with your Articles of Incorporation to the OH Secretary of State’s office.
  • A completed Application for Certified Copy and/or Duplicate Permit (Form BMV 4335) IF you have more than 1 place of business within the same county (each location needs its own form).

IF you’re applying for a:

  • New car dealer license: A Statement of Manufacturer/Distributor Franchise (Form BMV 4319).
  • Used car dealer license: A certificate of completion for the required used car dealer training course from an approved education provider.
  • You must complete the course within the 6 months prior to submitting your application.
  • Additional, specialized paperwork if you plan on selling new remanufactured vehicles that aren’t franchised by a manufacturer—contact the BMV’s Dealer Licensing Section for details.

Once you are done completing the form, you can mail everything to:

Ohio Bureau of Motor Vehicles

Attention: Dealer Licensing Section

P.O. Box 16521

Columbus, Ohio 43216

Please note that in Ohio, all dealership affiliates must undergo a criminal background check via electronic fingerprints taken at a qualified Bureau of Criminal Identification and Investigation (BCI&I).

14. Oregon

In Oregon, you are expected to apply and obtain a valid Oregon car dealer certificate if you sell, display, offer for sale, trade, or exchange more than 5 motor vehicles in 1 calendar year.

The Oregon Business Licensing Unit provides a car dealer certificate application packet that includes the instructions, forms, and fee information you need to apply for your dealer certificate. This packet is your friend! In order to apply for your OR car dealer certificate, submit the following items to the Business Licensing Unit:

  • A completed: Application for Three Year Vehicle Dealer Certificate (Form 735-370).
  • Attach copies of driver licenses or government-issued photo identification cards for EACH owner, partner, member, and corporate officer.
  • The zoning official for your business jurisdiction must sign the application.
  • Supplemental Dealer/Rebuilder Vehicle Dealer Certificate Application (Form 735-372).
  • Complete and submit this form and the additional fee (see below) if you will have multiple locations.
  • Each location must operate under the same business name and ownership.
  • A *Surety Bond (Form 735-370B) signed by the surety agent and the dealership’s owner, partner, member, or corporate officer.
  • A Certificate of Insurance.
  • Completed by an insurance company licensed in Oregon.

Alternatively, complete and submit the *Liability Insurance Certificate of Exemption (Form 735-7024) ONLY IF you deal EXCLUSIVELY with antique motor vehicles; snowmobiles; Class I or Class III all-terrain vehicles; campers; travel trailers; or horse, boat, utility, or non-motorized trailers.

  • An education certificate for the completion of a dealer education course.
  • Dealer certificate applicants must complete a pre-licensing education course from an approved education provider.
  • Some applicants—namely franchised dealers selling nationally advertised new vehicles—are EXEMPT from the dealer education requirement. Read, complete, and submit the *Education Requirements Certification of Exemption (Form 735-370C) form if you qualify for exemption from the course.

You are also expected to pay the following applicable fees:

  • Original Certificate: $1,187.
  • Includes 1 license plate.
  • Additional business location: $350.
  • Additional plates: $54.

Once you are done with the completion of your application form, you can mail the form, the supporting documents and the fees to:

DMV Business License Unit

1905 Lana Ave., NE

Salem, OR 97314

Please note that as part of the application process, a representative from the Business Licensing Unit will inspect your dealership to make sure it’s up to the state’s business location

15. South Carolina

The South Carolina Department of Motor Vehicles (SCDMV) issues a variety of motor vehicle dealer licenses. On this page, we’ll look at who’s required to have one and the steps to applying for the correct dealer credentials. In South Carolina, you are expected to obtain a motor vehicle dealer license (the most common dealer license) if you’re in the business of selling or attempting to sell more than 5 motor vehicles in 1 calendar year.

In general, if you’re applying for a non-franchise dealer license, you must complete a pre-licensing course BEFORE you can apply for a motor vehicle dealer license. You’ll need to submit a Pre-Licensing Course Certificate with your dealer application packet.

The state-mandated course lasts 8 hours and you can enroll with either of the following approved agencies Carolinas Independent Automobile Dealers Association and Carolina Dealer Training.

Please note that in order to apply for a South Carolina motor vehicle dealer license, you need to submit:

  • A completed Application for a Dealer or Wholesaler License (Form DLA-1).
  • An Affidavit of Eligibility (Form AD-808A) for each owner who owns at least 10% of the business.
  • A Dealer Licensing Background Screening for each owner who owns at least 10% of the business
  • A Motor Vehicle Dealer and Wholesaler Surety Bond (Form DLA-1B) with a Power of Attorney for $30,000.
  • A diagram of the business location, which must include the building and display area.
  • Copy of your Retail License from the South Carolina Department of Revenue (SCDOR).
  • Your city/county business license OR a letter from the city or county stating your business doesn’t require a license.
  • The original Pre-Licensing Course Certificate (if required).
  • Proof of garage liability insurance if you’re applying for a dealer demonstration plate.

Once you complete the application, you can post it to:

SCDMV

Dealer Licensing and Audit Unit

P.O. Box 1498

Blythewood, SC 29016

When your application is approved, the SCDMV will contact you for a dealership inspection. Please note that when everything’s approved, you’ll need to pay the SCDMV the following fees to receive your dealer license Dealer license: $50 and Dealer plates: $20 each.

  • N.B: Your car dealer license is valid for 12 months and you must prominently display it upon receiving it

16. Texas

Once it comes to car dealership, Texas is notable for high volume transactions and in order to regulate this trade, the state subjects Texas automobile dealers to many legal restrictions and requirements. Number one among the requirements is that you fill out application forms―stacks of them.

The Texas Department of Transportation offers a dealer manual, and a dealer an Independent (GDN) Licensing page that will help you understand all requirements and regulations. Application Requirements

  • For a new dealer in Texas, the first step is to obtain a General Distinguishing Number (GDN). This requires, among other things, a permanent place of business, signage in accordance with regulations, and sufficient space to display the required number of vehicles of the type you intend to sell.
  • You’ll need a General Distinguishing Number (GDN) whether you sell new cars or used. If you also (or instead) sell motorcycles, RVs, or other trailers, you’ll need a separate GDN for each class of vehicle.
  • The necessary forms can be downloaded in PDF format from the Texas Department of Motor Vehicles licensing forms page.

Note that franchise dealers (new vehicles) and independent dealers (used vehicles) have different forms and instructions, so be sure to download the appropriate files. The licensing forms page also provides handy links to the portions of the Texas legal code that apply to both new and used auto dealers, so it’s quite a useful resource.

Application Process

  • Each license type has an information packet that walks you through the application process. Detailed information can be found at the DMV’s Dealer License Application Process webpage.
  • Once the application is received, your payment will be processed.
  • Applications are then scanned into the system and a Work Item Number will be given.
  • A confirmation e-mail containing the work item number and some other basic information will be sent to you.
  • Licensing specialists will next review your applications and approve the information submitted or write deficiencies if more information is needed.
  • Please be informed that when your license is approved, it will be printed and mailed (along with your dealer plates, if any) to your Texas mailing address listed on your GDN application.

17. Washington DC

If you want to engage in selling, buying, exchanging, distributing, or otherwise dealing with motor vehicles or trailers in Washington DC, then you will need a car auction license.

Please note that in DC obtaining a car dealer license is a two-fold process; you must hence you expected to get a Basic Business License in the Motor Vehicle Dealer category and Become a DC DMV registered dealer. In order to start the process, you are expected to visit Washington, D.C.’s “Start a Business” page where you’ll find instructions on how to:

  • Register your corporation (if applicable).
  • Apply for a federal employer identification number (FEIN).
  • Obtain a certificate of occupancy.
  • After that, you can apply for a Basic Business License in the Motor Vehicle Dealer category from the Washington, D.C. Department of Consumer and Regulatory Affairs (DC DCRA) by providing:
  • A completed Basic Business License Application.
  • Proof your business is registered and in good standing with the DC DCRA IF your dealership will operate as a corporation, partnership, LLC, or trust.
  • A Clean Hands Self Certification.
  • This certifies that you don’t owe more than $100 to the DC government.
  • Your Federal Employment Identification Number (FEIN).
  • Certificate of Occupancy from the Office of Zoning (DCOZ).
  • The DCOZ will advise you on car dealership location requirements. Contact the DCOZ at (202) 442-4576 to speak with a zoning technician about requirements and a possible zoning review appointment.
  • Certified copy of your Police Criminal History Report (Form PD-70), which you can obtain from the Metropolitan Police Department (MPD).
  • Visit the MPD’s website for more information.
  • 3 copies of your Car Order and Bill of Sale form AND/OR Conditional Sales Contract.
  • The state provides a sample.
  • Must be accompanied by a certified letter of authorization for EACH person who will sign the Car Order and Bill of Sale forms and/or Conditional Sales Contracts.
  • A Motor Vehicle Dealer Bond for $25,000 from an authorized insurance carrier.
  • Alternatively, you can post a cash bond with the DC DCRA.
  • A Motor Vehicle Salesperson(s) Designation Letter.
  • You must submit at least 1 salesperson application.

Payment for the total fee of $556.60, broken down like so:

  • Category license: $411.00.
  • Application: $70.00.
  • Endorsement: $25.00.
  • 10% technology fee: $50.60.

Submit all of the above by any of the following methods:

  • Online by creating an account with My DC Business Center.
  • You can submit your applications in person to:

DCRA

Business License Center

1100 4th St. S.W.

2nd Floor

Washington, DC 20024

  • *By mail:

Processing time can take up to 30 days using this method. Pay with a check or money order made payable to “D.C. Treasurer.” You are expected to forward you applications, supporting documents and fees to:

Wells Fargo Bank

DC Government Wholesale Lockbox 91360

7175 Columbia Gateway Dr.

Columbia, MD 21046

Please note that your Basic Business License in the Motor Vehicle Dealer category is valid for 2 years

Standard Process for Getting a Car Auction License in States Not Listed Above

If you intend applying for car auction license in any of the following states (Alaska, Arkansas, Colorado, Delaware, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Mexico, North Carolina, North Dakota, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming),

Then the process listed below applies to you but you must also ensure that you check the appropriate department in your state to get other specific requirements;

  • Attend a Pre-Licensing Dealer Training Course
  • Obtain a Permanent Business Location
  • Compile the Required Documents
  • Obtain Proof of Liability Insurance
  • Obtain Your Auto Dealer Bond
  • Submit Your Dealer License Application