Are you looking to open a dealership in Maryland? If so, the first step toward operating your business is getting a license. Even if you’re a seasoned auto dealer, it’s essential to do your due diligence throughout the process. Missing details in your application or overlooking key steps will prolong the process and set you behind. 

That’s why we’ve compiled a list of everything you need to know, so you can reference it as a step-by-step guide when starting your dealership business. Always remember to reference the DMV or MVA website along the way to ensure you are seeing the most up-to-date information. 

8 Steps for Getting Your Maryland Dealer License 

1. Identify which Type of License you Need

Depending on the state where you are opening a business, the respective Department of Motor Vehicles may draw boundaries between license types differently. In Maryland, there are three options: 

• New vehicle dealers 
• Used vehicle dealers
• Wholesale vehicle dealers 

The first step in the process is to identify the license you are seeking so that you can proceed with the application accordingly. Note that the used and new license types only allow you to sell those vehicles, so if you are looking to do business with both, you will need to apply for both.¹ 

2. Establish a Location for your Business 

Before proceeding with any application forms, you will have to establish a place of business. A zoning official from that county will then need to sign off on your site to verify that the location is suitable for your business type. You will need to include this signed form along with the rest of  the application. 

3. Background Check

Anyone who has a financial stake in the dealership will need to undergo a criminal background check in the state of Maryland. This includes all owners and partners. The background check needs to be completed through an organization approved by the Maryland State Police.  

4. Get a Trader’s License 

This is a permit that is required for selling any goods in Maryland—for both retailers and wholesalers. You will need to obtain this license before submitting your application. You can complete the process through your local circuit court. 

5. Obtain an Auto Dealer Bond and Liability Insurance

You will need liability insurance for the vehicles you sell, as well as worker’s compensation insurance. To prove you have these in order, you’ll be asked to provide an insurance form with your application. 

Beyond that, you need to secure an auto dealer bond which will cost a portion of the total amount, based on your personal financial history and factors. For used and wholesale dealers, the bond needs to be worth $15,000-$150,000. For new dealers the bond needs to be worth $50,000-$300,000. 

6. Get a Site Inspection 

The MVA Investigation Division provides site inspections, and you will need to show proof via a receipt with your application. 

7. Compile Application Documents

Along with the application form itself, you will need to provide the following:

• Proof of your workers compensation and liability insurance. 
• Business registration letter from the State Department of Assessments and Taxation. 
• Automotive Repair Facility Contract showing that you are located within 5 miles of a repair facility (or, that the facility is within your dealership). 
• Franchise approval letters if applicable. 
• New Vehicle Certification Form (for a new vehicle dealership license) which proves you aren’t also manufacturing vehicles. 
• Letter of Good Standing. 
• Use and Occupy Permit. 
• Dealer Orientation Request. 

8. Submit the Application and Pay the Fees

The application will be processed through the MVA’s Business Licensing and Consumer Services division. The corresponding fees are: 

• Two-year license: $450
• Two-year dealer tags: $100
• Salesman license: $67.50

You can send your application to: 

Motor Vehicle Administration
6601 Ritchie Highway, N.E. 
Room 146
Glen Burnie, MD 21062

Just note that in Maryland, you will be required to renew your license annually. You will get a renewal packet in the mail two months before the expiration date. If you don’t, reach out to the MVA. After  completing all the steps outlined in the packet, you will get your updated and renewed license.

This is not intended as legal advice. If you have questions about dealer licensing requirements, please seek the assistance of legal counsel.

Find Used Car Inventory in Maryland with ACV Auctions

When you complete the Maryland dealer license application process and get approved to run your auto dealership, get in touch with our team at ACV auctions. We help Maryland dealerships like yours fill their lots with the right used vehicles from Maryland and across the country. Our online auctioning platform provides you with everything you need to know before you bid on a car and includes detailed inspection reports. Contact us today to learn more. 

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Sources

1. JW Surety Bonds. “Maryland Auto Dealer License Guide.” Retrieved October 12, 2023. https://www.jwsuretybonds.com/states/maryland/auto-dealer-license 
2. Bryant Surety Bonds. “Maryland Auto Dealer License Guide.” Retrieved October 12, 2023. https://www.bryantsuretybonds.com/blog/how-to-get-dealer-license-in-maryland