If you are opening an auto dealership in Massachusetts, the rules work a bit differently than in other states. In Massachusetts, auto dealer licensing is regulated by the state. However, it is issued by the municipality, so before getting started, you will need to check online through the RMV to find out the exact requirements according to where you are located. 

Even though there is variation within the Massachusetts process because of the municipal oversight, we put together a broad overview of the process that can act as an outline state-wide. Just remember, even if you are an experienced dealer who has had businesses in other states, or even in various counties within the state of Massachusetts, you need to check with your local regulations to confirm the process for your application.

5 Steps for Getting a Massachusetts Dealer License

1. Choose the Right Type of License

In Massachusetts, there are three different auto dealer license types broken down into the following categories¹:

• Class I: New and/or used 
• Class II: Used only
• Class III: Salvage parts and/or Junk

These classifications are different from many other states, so if you are opening a second business, ensure you are pursuing the correct license type within Massachusetts, as it may not align with the processes you have completed before. 

2. Choose a Permanent Location for your Business

In order to qualify and pass all regulations, your location must contain a business office on-site. Within that, you must hold a record book that tracks used cars and is approved by the RMV. Finally, the site must have a clear sign that indicates what type of business you are running.  

3. Obtain an Auto Dealer Bond 

In Massachusetts, the bond amount you need to obtain is $25,000. The price of the bond will be a fraction of this overall value, and it will be determined by your personal financial qualifications, such as your credit score. 

4. Compile your Application Documents

With the application, you will be required to submit:

• A zoning application form 
• Your business articles of organization 
• Franchise agreements (for Class I) 
• Purchase and sale agreement
• Lease agreement 
• Workers compensation insurance affidavit 
• General affidavit (for Class II wholesale) 

5. Submit the Application and Pay the Fees

The Massachusetts fees are set separately in each municipality but generally do not go above $200. Your application should be submitted to the body indicated by your municipality—typically the city clerk’s office, or wherever you got the application from. Send all supporting documentation to that same location, as well. 

In Massachusetts, you are required to renew your dealer license each year (with the year running according to the calendar year of January 1^st to December 31^st). In order to remain an active auto dealer in the state, you will need to submit renewals in advance of any deadlines. For example, in Boston, the deadline is January 31^st of each year.²

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 Massachusetts with ACV Auctions 

ACV Auctions can help your dealership source used car inventory from Massachusetts or across the country. Once you get your dealership license in Massachusetts, call us to fill your lot with the cars you need. We have a detailed online auctioning system that makes it simple to see what you’re bidding for. 

Each vehicle is assessed by one of our team members and includes detailed inspection reports, so you won’t encounter any surprises. We love helping dealers like you get the best vehicles on the market. Contact us today to learn more and see how we can help you propel your business forward. 

Sources

1. JW Surety Bonds. “Massachusetts Auto Dealer License Guide.” Retrieved October 12, 2023. https://www.jwsuretybonds.com/states/massachusetts/auto-dealer-license 
2. Lance Surety Bonds. “Massachusetts Dealer License Full Guide (2023).”  Retrieved October 12,2023. https://www.suretybonds.org/blog/massachusetts-dealer-license-guide