If you plan to sell more than five motor vehicles per year in the State of Maryland you will need to obtain a dealer license. The Maryland Motor Vehicle Administration is responsible for licensing dealers and established the requirements you must meet to receive a license.
In this guide, we will show you a step-by-step process you can take to get your Maryland dealer license.
Step 1: Determine license type
The first step to getting your Maryland dealer licenses is to determine what type of license you need. There are a variety of different classifications that specify what types of vehicles the dealer can sell.
- New vehicle dealer license: This license lets dealers sell new motor vehicles under a franchise agreement with a manufacturer or distributor.
- Used vehicle dealer license: This license lets dealers sell used motor vehicles to the public and other licensed dealers.
- Wholesale dealer license: This license lets dealers buy, sell, and exchange used vehicles with other licensed dealers.
- Motorcycle dealer license: This license lets dealers sell new motorcycles under a franchise agreement with a manufacturer or distributor.
- Trailer dealer license: This license lets dealers sell new trailers under a franchise agreement with a manufacturer or distributor.
Step 2: Get your business location
The next step is to get your permanent place of business. This business location must meet all local zoning ordinances as well as other MVA requirements including:
- Have telephone line and a publicly listed number
- Have a display area
- Have an office to store business records
- Have a permanent sign displaying the business’ name
Step 3: Register your business
Auto dealers must register their business with the Maryland Department of Assessments and Taxation. You will need to provide a copy of your business registration letter with your application.
You will also need to obtain a trader’s license from the clerk of your local circuit court.
Step 4: Get insurance coverage
Next, you will need to get liability insurance for all the vehicles you will sell. If you have employees, you will also need to get workers’ compensation insurance coverage.
Once you get the necessary coverage, make copies of your policy documents as you will need to include them with your application.
Step 5: Complete site inspection
Before you can apply for your dealer license, an investigator from the MVA must come to your place of business to inspect your location. After the inspection, the investigator will initial your application, indicating if you passed or failed. The investigator will also issue a business site inspection receipt that you will need to include with your application.
You can schedule your location inspection by calling the MVA at 410-768-7216.
Step 6: Get a surety bond
Auto dealers are required to purchase a Maryland surety bond prior to receiving their license. The bonds provide financial protection to the state and consumers and ensure that the auto dealer complies with all the licensing requirements.
The required bond amount for Maryland motor vehicle bonds varies based on how many vehicles the dealer sold during the previous year.
- Used vehicle dealers and wholesale dealers: $15,000 to $150,000
- New car dealers: $50,000 to $300,000
You only need to pay a small percentage of the bond amount as a premium. This is typically between 1% and 3% of the bond value. The surety company issuing your bond will decide your premium rate based on your industry experience, credit score, financial history, and other factors.
Step 7: Submit application
After you’ve met all the requirements, you can complete your dealer license application. All the application forms are available on the MVA website. Along with these forms, you will need to gather your supporting documents including:
- Proof of insurance
- Business registration letter
- New vehicle certification form
- Franchise approval letter (new dealers only)
- Copy of trader’s license
- Surety bond form
You will also need to include a $450 license fee and a $100 fee per dealer tag. When everything is ready, you can mail your application packet to the following address:
Motor Vehicle Administration
6601 Ritchie Highway, N. E.
Glen Burnie, MD 21062
Maryland dealer license frequently asked questions
How do you renew a Maryland dealer license?
Maryland auto dealer licenses are valid for a three-year period. The Business Licensing and Consumer Services (BL&CS) unit of the MVA will mail you renewal packet 60 before your license expiration date. You will need to complete the renewal form and send it back to the MVA 15 business days before your license expires.
How much does it cost to get a dealers license in Maryland?
Auto dealers in Maryland must pay a $450 license fee and a $100 fee for each dealer tag. Dealers that require a salesman’s license will also need to pay a $67.50 fee.
How many cars can you sell in Maryland before you need a dealer’s licence?
Individuals and dealerships in the State of Maryland can sell up to four motor vehicles in a 12-month period without a dealer license.
How EZ Surety Bonds can help with a Maryland dealer license
When you’re ready to get your Maryland auto dealer license, EZ Surety can offer you a free online quote for your Maryland auto dealer bond.
We provide competitive premiums and quick turnarounds for individuals of all financial standings. Get in touch today to learn more.