Opening a dealership requires business owners to follow several steps to ensure all legal and formal requirements are in place. While the list can seem long, each step has a designated purpose, and it’s important to be thorough. In this article, we’ll review the steps it takes to apply for a license in New York so you can be sure you completed the process correctly. 

8 Steps to Getting a New York Dealer License

First and foremost, it’s important to understand when New York mandates that you get a dealer license. There are two circumstances: First, when you sell or plan to sell more than five vehicles in a single year. Second, when you have three or more vehicles on display at your property at a time or if you display three or more within a single month. 

If you meet these conditions, it means you need an auto dealer license in the State of New York. To apply for one, you’ll go through the New York DMV. Here are the other steps you’ll need to follow. 

1. Identify the Type of Dealer You’ll Be

There are three options that will affect your licensing process: 

• Retail Motor Vehicle Dealer (New): This allows you to sell new cars. 
• Retail Motor Vehicle Dealer (Other): This allows you to sell used cars, as well as wholesale, plus motorcycles, trucks, trailers, and RVs. 
• Wholesale: This allows you to  sell to other car dealers, but not regular consumers. 

2. Register Your Business

You can register as an LLC, corporation, etc., but you’ll need to do so with the county clerk. 

3. Get a Business Location

Getting a physical site for your business is an essential step in the licensing process (not to mention crucial to actually running the business eventually). There are specific requirements that outline whether a site is suitable for this type of business and if it will pass all legal specifications. Your business location must: 

• Be clearly separated from all other surrounding businesses. 
• Have a lot to display the vehicles. 
• Include a mailbox. 
• Have a  locking cabinet, safe, or box to store secure items. 
• Have utilities,  like heat, electricity, and workspace desks and chairs. 
• Have a functioning  business line (cell phone or landline). 
• Comply  with all local zoning rules. 

Your business location is also required to have a  sign. The State of New York has strict guidelines for dealership signage: 

• It must have a red background with white lettering. 
• Minimum dimensions of 3 feet wide by 2 feet tall. 
• Clearly displayed sign that says “REGISTERED [insert facility number] STATE OF NEW YORK MOTOR VEHICLE DEALER” in lettering that is 2” block. 
• Permanently affixed to be visible from the nearest street. 

4. Secure an Auto Dealer Bond

You must get a dealer surety bond before you submit your license application, and the bond you’ll need will be contingent on how many vehicles you sell per year. Here are the price brackets:

• For those who sell 50 or fewer used vehicles: $20,000
• For those who sell over 50 used vehicles: $100,000
• For those who sell new vehicles: $50,000

For those who only sell trailers, motorcycles, boats, etc., there is no bond requirement. 

5. Get Proof of Liability Insurance

This insurance should cover vehicles that the dealership owns or those that will have dealer plates. 

6. Obtain a Dealer’s Starter Kit

These kits are available through approved vendors outlined by the DMV, and they include the book of registry, bills of sale, odometer statements, and warranty forms. The cost of the kit is $200. 

7. Schedule a Business Location Inspection

Technically, you’re allowed to submit your application before this step in New York. But you’ll need to get an automotive facilities inspector to come to your location to approve your business. 

8. Submit Your Application 

Once you have followed the above steps, it’s time to submit your application. Let’s review a list of all the materials you will need to include with your submission: 

• Certificate of Registration for your business and a filing receipt (for an LLC or corporation only)
• Federal Employee ID Number (FEIN)
• Proof of workers' compensation insurance  
• Disability insurance 
• Sales tax ID/Certificate of Authority from the NY State Dept. of Taxation & Finance 
• A photocopy of a government-issued ID for everyone who is listed as an applicant 
• Receipt of purchasing a dealer’s starter kit and business signs as proof 
• The application fee of $487.50

Once you have all these materials ready, you can submit your license by sending your documents to: 

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

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

Become an ACV Auctions member 

Once you’ve obtained your dealer license, ACV Auctions can help you source used car inventory in New York. We are an online auction, which means we have inventory from all over the country. ACV has no membership fees, and our transparent vehicle condition reports give dealers everything they need to know to bid confidently on inventory. Sign up with ACV today!

Sources

1. Suretybonds.com. “How to get a New York auto dealer license.” Retrieved August 18, 2023. https://www.suretybonds.com/guide/new-york/auto-dealer-license.html 
2. JW Surety Bonds. “New York Auto Dealer License Guide.” Retrieved August 18, 2023. https://www.jwsuretybonds.com/states/new-york/auto-dealer-license