If you’re looking to do business as a vehicle dealer in Pennsylvania, you’ll need to apply for the proper licensing. Whether you’ll be selling new or used motor vehicles, each has its own type of license and rules to follow. Because the process runs through the Pennsylvania Department of Transportation, it is important to get it right the first time to avoid delays to the process and to your business. In this article, we’ll outline everything you need to know to get your application together. 

Getting Your Pennsylvania Dealer License 

1. Which Type of License will you Need?

In the state of Pennsylvania, dealership licenses are issued based on various types, so the first step in the process is to identify the type of license you need for the business you plan to establish. The following list indicates the various vehicle license options¹: 

• New vehicles 
• Used vehicles 
• Motorcycles
• New trailer dealers
• Mobile home dealers

2. Register your Business

Before completing any of the actual application steps, you’ll first need to form a business entity as either a sole proprietorship, an LLC, an LLP, or a corporation. When you eventually submit your application, you’ll need to include this documentation and show that you are registered with the Pennsylvania Department of State.   

3. Establish a Business Location

In order to begin operating a business, you’ll need to have an adequate location that meets all standard requirements. You’ll have to provide proof of all these points when you submit your application, so be vigilant in the process as you choose a business location. When opening a car dealership in Pennsylvania, the location must include the following: 

• Be permanent and have an office alongside a display area. 
• Contain a display area large enough to show at least five vehicles at a time, separate from the parking area.
• Contain a phone, desk, and lockable file cabinet where all business documents are stored. 
• Feature a permanent exterior sign that shows the business name as well as the business hours for the location.
• The business must be a separate entity from any other establishment (or residence).
• Obtain and provide a Certificate of Occupancy from the Department of Labor and Industry, as well as completed zoning documentation to prove you meet all regulations and requirements.

4. Complete a Background Check 

Every owner or partner in the business will have to complete a criminal history record in order to get a business license. These can be obtained from the Pennsylvania State Police, and you’ll be required to submit the original copy of the check. 

5. Get an Auto Dealer bBond

Every dealership in the State of Pennsylvania is required to be bonded in order to operate (this does not apply to mobile home dealers). The cost of the bond will be a percentage of the full bond amount, and this percentage can depend on personal factors like credit score or financial strength. The bond amounts are²: 

• Manufacturer/Dealer: $20,000
• Messenger Service: $50,000
• Full agent: $30,000
• Salvor: $10,000
• Card Agent: $3,000

6. Gather the Documents 

As you come to the end of the process, it’s time to gather all of the necessary documents to ensure you have everything required to submit a thorough application. Here’s a list of the documents you’ll need: 

• The deed/lease for your business property
• Proof of liability insurance (i.e., an insurance identification card, policy, signed binder, etc.).
• A check of $60 made out to the Commonwealth of Pennsylvania that goes toward the Motor Vehicle Transaction Recovery Fund.
• A list of all the owners and partners in the business as well as their respective titles. 
• A completed MV-375 form.
• A notarized version of Section K of your application.

7. Submit the Application and Pay your Fees

Fill out the DMV application form and pay the fees: either $52 per dealer plate or $26 per motorcycle dealer plate.

You can send your materials to: 

PennDOT
Bureau of Motor Vehicles
P.O. Box 68283
Harrisburg, PA 17106-8283

8. Inspection 

After your documents are approved, an agent from the Vehicle Board will come to your business to inspect the dealership. If you are approved, you will be able to open your doors. If not, you’ll owe a $45 reinspection fee. 

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 get approved as a licensed dealer in Pennsylvania, you can work with ACV Auctions to obtain inventory. As an online auction, we can offer inventory from all over the country, giving you a wide range of vehicles for your lot. We have no membership fees, and our platform features transparent vehicle condition reports, giving dealers everything they need to bid confidently and acquire inventory.

‍

Sources

1. JW Surety Bonds. “How to Get a Pennsylvania Auto Dealer License.” Retrieved September 6, 2023. https://www.jwsuretybonds.com/states/pennsylvania/auto-dealer-license 
2. Surety Solutions. “How to get a Pennsylvania Car Dealer License.” Retrieved September 6, 2023. https://suretysolutions.com/suretynews/pa-car-dealer-license/