How to Get a Pennsylvania Dealer License
Starting an auto dealership in Pennsylvania is an exciting endeavor, but it requires undergoing through a few steps, so that you can operate legally in the state. The most important one is obtaining your Pennsylvania dealer license.
Similarly to most states, the Pennsylvania Department of State’s Vehicle Manufacturers, Dealers and Salespersons Commission requires dealers to meet a list of requirements before issuing their license. You will have to meet certain criteria regarding your business location and official documents, as well as obtain a Pennsylvania auto dealer bond.
While the administrative steps are numerous, equipped with the right information, your licensing process will be smoother. Let’s review the main milestones for launching your dealership.
Who needs a Pennsylvania dealer license?
In order to function in compliance with Pennsylvania regulations, various types of businesses are required to get a license. The most common Pennsylvania auto dealer licenses include:
Once you have identified the exact type of license that you need, you can proceed to complete the relevant licensing application for it.
Pennsylvania dealer license requirements
Besides filling in correctly and fully the application form, there is a number of other documents that you need to provide together with it, so that the Commission can review your application. For Vehicle Salesperson or Representative licenses, you also need to submit a completed Signature Card.
The specific requirements will vary between the different types of licenses, but the most common ones include:
- Photographs of your showroom and office location. Both of these should meet specific criteria set forth in the application form;
- Dealership sign and business hours sign;
- A hand-drawn diagram of your premises;
- Proof of a working telephone line;
- Proof of ownership or lease of your business location;
- Formation documentation for your business;
- Zoning code compliance documents;
- Certificate of Occupancy from the Department of Labor and Industry;
- Criminal History Check from the Pennsylvania State Police;
- Application for Pennsylvania dealer plates
- $20,000 Pennsylvania auto dealer bond for each of your locations;
- Licensure or re-inspection fee payment.
The full overview of state requirements and statutes can be reviewed in the Pennsylvania Vehicle Code.
Once you’ve obtained the whole list of required documents, you can submit them together with the application form to the Commission. If your paperwork is intact, an agent will visit your business location to inspect it. You can then be issued a temporary license, so that you can start operating while waiting for your license. Typically, it takes about four weeks to receive your Dealership Identification Number.
Getting a Pennsylvania auto dealer bond
One of the major requirements for obtaining your Pennsylvania dealer license is to post a surety bond. In the case of auto dealer licenses, the amount required is $20,000 for each of your locations.
If this is the first time you need to get bonded, understanding how surety bonds work is an essential first step. Unlike insurance, your bond is there to protect the state and its citizens. It guarantees that your dealership will follow the rules that govern the dealership industry. A surety bonds company backs your bond in front of the state authority that requires it, meaning that your dealership is safe to do business with.
To get bonded, you do not need to post the whole bond amount. Instead, you have to pay only a fraction of it, called the bond premium. Typically, this means between 1%-3% of the bond amount, in case your finances are in good shape. Your surety determines your exact surety bond cost on the basis of your credit score and your overall business stats.
While getting your Pennsylvania dealer license is certainly not rocket science, it does entail undergoing through various steps and providing a set of necessary documents. With this overview of the process, you can be better prepared to go through it with no hassle.
If you are ready to start your bonding process as a part of the licensing, apply online for a free auto dealer bond quote from Lance Surety Bonds. For any questions, don’t hesitate to call us at 877.514.5146 or send your inquiry to [email protected]