If you’re looking to open a business selling vehicles in Vermont, you need a dealer license. This process is detailed and entails numerous steps. That’s why we’ve gathered a list of everything involved, so you can complete the process in an organized, timely manner and start focusing on your real interest—opening the business. 

A Step-by-Step Guide to Getting Your Vermont Dealer License 

1. Identify Which Dealer License Type You Need

The Department of Motor Vehicles (DMV) in Vermont manages licenses, and they have different categories for  automotive dealers. In addition to used car dealers (UCD) and new car dealers (NCD), there are numerous types of other vehicles, like motorcycles, snowmobiles, and more. If you are looking to apply for one of those, check the DMV requirements. In this article, we will focus on new and used car dealers.¹ 

2. Register the Business 

Once you’ve identified the type of dealer license you need, you will have to register your business through the Secretary of State, Department of Taxes, and Department of Labor. You will then need to get an Employer Identification Number from the IRS. 

3. Establish a Business Location 

Before you even submit an application for a dealer license, you will need to secure a location for the business. This location will need to meet a handful of criteria, so ensure your site has the following qualities: 

• At least 1,200 sq. ft. and primarily used to sell vehicles 
• A separate dealer office area for doing business, which must include heating, space to store all business records, and a spot to display the dealer license 
• A display area
• A sign that is visible to the public with the dealership name listed. 
• A zoning compliance certificate from the town²

Additionally, the business must be open at least 146 days each year for at least 6 hours per day and sell at least 12 vehicles per year.

4. Fill Out the Dealer License Application

In Vermont, you will need to prove that you have completed the above steps before even filling out the application. So, once you arrive at step four, it’s time to fill out the dealer application online. 

You will also need to collect a number of supporting documents: 

• A criminal background check
• A valid sales or service agreement (for new car dealers)
• A franchise agreement (for new car dealers) 
• Proof of insurance for your dealer plates

5. Get an Auto Dealer Bond

Along with your application, you will need to show that you have secured an auto dealer bond. The cost of the bond will only be a fraction of its value, based on your financial standing. Vermont sets the bond amount based on how many vehicles you have sold in the last two years. All new dealers are fixed at $35,000 as a bond amount. 

6. Submit Your Dealer License Application and Fees

There are several fees you need to submit in Vermont, and they are valid for one year. New car, used car, finance car, and auction license cost $503. Again, for all other vehicle types there are different fees that you can check with the DMV if needed. 

Then, submit your application by mailing all paperwork and documents to: 

Vermont Agency of Transportation 
Department of Motor Vehicles 
120 State Street
Montpelier, VT 05603

You will hear back within six weeks. If you are given a license, you will also need to purchase additional plates (you will be given 1–3 depending on the type of license). The additional plates are available based on projected sales. For example, selling under 20 vehicles per year requires 0 additional plates, while selling 1,500 or more can require up to 57 additional plates.³ 

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

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