If you want to sell motor vehicles or open a car dealership in New York, you will need to obtain a car dealer license. The New York Department of Motor Vehicles (DMV) is responsible for overseeing the licensing process. They have a set of requirements that dealers must meet before they can receive their license.
In this guide, we’ll outline all the licensing requirements and give you a step-by-step process for getting your car dealer license in New York.
Step 1: Determine license type
The first step to getting your car dealer license in New York is to determine what type of license you need. There are several available license classifications that allow dealers to sell different types of vehicles.
- New Retail Motor Vehicle Dealer License: Lets the dealer sell new motor vehicles only to the public.
- Retail Motor Vehicle Dealer (Other) License: Lets the dealer sell used motor vehicles including motorcycles, trailers, trucks, RVs.
- Wholesale Dealer License: Lets the dealer sell motor vehicles to other licensed dealers but not the general public.
- Boat Dealer License: Lets the dealer sell watercraft to the general public.
Step 2: Get your business location
The next step is to establish your permanent place of business. This business location must meet certain requirements set by the New York DMV.
- Must adhere to local zoning ordinances
- Must have an office with a safe, file cabinet, or other methods of securely locking files
- Must have an exterior sign that displays the business name
- Must have a display lot to show vehicles to customers
Step 3: Register your business
You must register your business in the State of New York before applying for your car dealer license. This will include getting a Sales Tax ID and a Certificate of Authority from the New York State Department of Taxation (DTF).
If your business is a sole proprietorship or partnership, you must also obtain a business certificate from your local county clerk.
Step 4: Get insurance
New York auto dealers are required to have garage liability insurance as a form of protection against incidents that may occur during the course of business. Businesses that have employees also need to get workers’ compensation insurance coverage.
Step 5: Get a surety bond
All auto dealers are required to get a New York surety bond as part of the licensing process. The bonds provide additional assurance that the dealer will comply with all license regulations and allow any damaged parties to receive financial compensation.
The required bond amount for New York motor vehicle dealer bonds varies based on the license classification and the number of vehicles the dealer sold the previous year.
- $100,000 bonds for motor vehicle dealers selling more than 50 vehicles a year
- $100,000 bonds for automobile brokers
- $20,000 bonds for motor vehicle dealers selling less than 50 vehicles a year
Dealers only need to pay a small percentage of these total amounts as a premium. This is typically 1% to 3% of the bond amount. When your surety issues your bond, they will determine your individual premium by evaluating your industry experience, financial standing, and other factors.
Step 6: Submit license application
After you have met all the DMV’s requirements you are ready to submit your license application to the DMV. You can find the Original Facility Application on the DMV website. When submitting your application you will need to include the following supporting documents:
- Copy of your Certificate of Authority from the New York DTF
- Business Certificate of Registration from your local county clerk (partnerships and sole proprietors)
- Proof of workers’ compensation insurance
- Proof of purchase for your dealer’s starter kit
- Copies of driver’s license for all owners and officers listed on the application
You must also include a $487.50 motor vehicle dealer business fee and a $260 MV-50 fee.
After you complete the application form and gather all the requested documents, you can send your application packet to the following address:
Bureau of Consumer and Facility Services
Attention: Application Unit
P.O. Box 2700
Albany, NY 12220-0700
Step 7: Complete business location inspection
After the DMV processes your license application, they will send it to your regional office for further review. During this time, you will need to set up an inspection appointment with an Automotive Facilities Inspector (AFI). The AFI will come to your business location to verify that the location meets all the necessary requirements.
The inspector will also check to see if you have your dealer starter kit. You can purchase your dealer starter kit from one of the vendors listed on the DMV website.
New York car dealer license frequently asked questions
How much does it cost to get a dealer license in NY?
Auto dealers in New York must pay $747.50 of total licensing fees to receive their dealer license. They must also purchase a surety bond the cost of which will vary on an individual basis.
How do you renew a New York car dealer license?
New York car dealer licenses are valid for two years. Dealers have the ability to renew their license starting 60 days prior to the expiration date. The renewal process can be completed online or by mail. You can find more detail about the renewal process on the New York DMV website.
How many cars can you sell in NY without a dealer license?
Individuals in New York can sell up to five motor vehicles per year without a license. If you sell more than five vehicles, you must get a car dealer license from the New York DMV.
How EZ Surety Bonds can help with a New York car dealer license
These are all the steps needed to become a licensed car dealer in New York. When you’re ready to start the licensing process, EZ Surety can offer you a free online quote for your New York auto dealer bond.
We provide competitive premiums and quick turnarounds for dealers of all experience levels and financial standings. Apply online today or get in touch today to learn more.