New York Auto Dealer License Guide

To get an auto dealer license in New York you will have to apply through the New York Department of Motor Vehicles.

Want to know more about how to become an auto dealer before you apply? Keep reading below to find out everything you need to know about the requirements to get a dealers license in NY. We cover the entire licensing process, including auto dealer bond requirements.

You are required to have a license if you:

• Sell or offer for sale 5 or more vehicles in any calendar year. This includes motorcycles and trailers (excluding mobile home trailers).
• Display 3 motor vehicles simultaneously on a property you own or control. OR if you display 3 vehicles within a calendar month.

An auto dealer is someone who sells cars directly to the public or other businesses. A dealer agent, also known as an auto broker, is the in-between person for potential buyers and sellers. They do not have their own car lot or inventory but rather connect buyers and sellers for a fee or commission.

Licensing requirements in New York have several steps. This includes securing a place of business, insurance, a bond, and starter kit. We dive into the specifics below.

Determine What Kind of Dealer You Want To Be

Retail Motor Vehicle Dealer, New: For new car dealers. Allows you to sell new motor vehicles

Retail Motor Vehicle Dealer, Other: For used car dealers. Allows you to sell used motor vehicles, buy/sell wholesale motor vehicles, motorcycles, RVs, trailers, trucks.

Wholesale: Sell to other dealerships, but not to the general public

Obtain a Permanent Business Location

Your business location must include:

• Clear and permanent physical barrier from other businesses that may share your location (separating display areas, signs and offices)
• Display lot
• Mailbox at the business address dedicated to your business only
• Method of locking items securely (locking cabinet, safe, etc.)
• Heat, electricity, desk and chairs
• Landline business phone (cell phone is acceptable)
• Your dealership must follow the zoning rules for your jurisdiction

There are strict requirements for your business sign. It must have:

• Red background and white lettering
• At least 3 feet wide by 2 feet tall
• Must display “REGISTERED (Facility Number) STATE OF NEW YORK MOTOR VEHICLE DEALER” in 2” block lettering
• Should be permanently mounted and visible at all times from the nearest street or highway

Obtain Your Auto Dealer Bond

The cost of a New York 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 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).

New York auto dealers are required to obtain a surety bond prior to submitting a dealership application.

• Your application must include a copy of your complete original sealed and signed surety bond form: Dealer Bond Under NYS Vehicle and Traffic Law Section 415 (6-B) (VS-3), with power of attorney papers made out to your business name and address.

The New York surety bond you need depends on how many vehicles you sell in a calendar year.

• $20,000 - Retail and Wholesale dealers that sell 50 or fewer vehicles (not new vehicles).
• $100,000 - Retail and Wholesale dealers that sell more than 50 vehicles (not new vehicles).
• $50,000 - New Retail dealers (franchised cars, SUVs, light trucks).

If you ONLY sell trailers, motorcycles, ATVs, boats, snowmobiles, or vehicles that weigh more than 10,000 lbs., you are exempt from bond requirements.

Obtain Proof of Liability Insurance

You are required to have liability insurance that will cover vehicles owned or operated by the dealer and sporting dealer plates. Proof of insurance must be included with your car dealer license application.

Purchase Your Dealer’s Starter Kit

All new dealers need to purchase a Dealer Starter Kit. The list of vendors is available on the DMV site. This kit includes:

• Book of Registry (Police Book)
• Bills of sale (Retail Certificate of Sale MV-50)
• Odometer Statements
• Warranty Forms

Compile the Required Documents

The following documents must be provided with your application:

• Official Business Certificate of Registration from the county clerk
• Federal employee ID number (FEIN), proof of worker’s compensation, and disability insurance coverage
• Sales tax ID number and a copy of the Certificate of Authority issued by the New York State Department of Taxation and Finance
• Proof of Workers Compensation Insurance for your employees
• Photocopies of driver’s licenses or other government-issued photo ID for everyone listed on the application
• A receipt for your purchase of the dealer’s starter kit and signs
• For a corporation or LLC: Filing Receipt from the New York Department of State
• For a partnership or an individual using an assumed name: Business Certificate from the County Clerk 

Submit Your Dealer License Application

The Original Facility Application, supporting documentation, and fees must be sent to the following address:

NYS DMV Bureau of Consumer and Facility Services
Application Unit
P.O. Box 2700
Albany, NY 12220-0700

Schedule a Business Location Inspection

Once your application is processed, you will be contacted to make an appointment for a business inspection by an automotive facilities inspector (AFI).

How Do You Get a Dealer's License Without a Lot?

Wholesale-only dealers do not need a lot as they sell to other auto dealers and wholesale auction businesses. They are not permitted to sell to the general public.

• Motor vehicle dealer application and business fee: $487.50
• Starter Kit: $200

The application and business fee is payable to “Commissioner of Motor Vehicles”.

Here are a few extra resources to get your wheels in motion:

• The Motor Vehicle Dealers and Transporters Regulations (Form CR-78). It contains additional information on conducting sales, license plates, and advertising requirements.
• The Original Facility application for dealers can be downloaded here and includes an explanation of the application requirements.
• Contact the New York DMV with any questions at dmv.ny.gov or at (518) 486-9786.

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