Indiana Auto Dealer License Guide
If you’re thinking of becoming a car dealer in Indiana, you’ll need to obtain an Indiana dealer license from the Secretary of State, Auto Dealer Services Division.
Getting licensed as a dealer is fairly straightforward. You just need to meet state licensing requirements, obtain an Indiana auto dealer bond, submit your dealer application and additional documents, and pay a licensing fee.
To find out exactly what your auto dealer bond will cost, and get a free quote, fill out the online application below.
**NEW:** Download our FREE e-book guide containing comprehensive information on how to start your own dealership, from getting licensed and bonded to securing financing and cars for your lot!
Determine the Type of Indiana Dealer License You Need
According to Indiana Code 9-32 (IC 9-32 – Dealer Services) and Indiana Administrative Code Title 75, any person who sells more than 12 vehicles per year is required to acquire an auto dealer license.
There are seven different categories of car dealer license available in Indiana. These are:
- Mobile homes
- Recreational vehicles
- All-terrain vehicles (ATVs)
Within these categories you can choose to become licensed as a new only, used only or new & used vehicle dealer. These licenses all allow you to sell new and/or used cars both to the public and to other dealers.
If you plan to sell used vehicles only to other dealers rather than to the general public, you can apply for a wholesale dealer license. All of these licenses allow you to buy vehicles at dealer-only auctions.
Obtain a Permanent Business Location
Before you can apply for a motor vehicle dealer license, you’ll need an established place of business. This premises will need to meet all Indiana auto dealer location requirements. Your location must:
- Be a permanent physical business location that is not a residence, temporary stand or mobile trailer
- Meet zoning requirements
- Have a minimum area of 1,300 square feet and be able to accommodate at least 10 vehicles of the kind and type that you’re licensed to sell
- Have space for customer parking
- Have an office of at least 100 square feet, equipped with standard office furniture.
- Be serviced with utilities including electricity, lighting, heat, operational plumbing and a business telephone.
- Be accessible to the public for a minimum of 30 hours each week during normal business hours.
- Display a sign with your business name
Gather the Required Documents
The first step in securing your Indiana auto dealer license is to fill out the Vehicle or Watercraft Dealer License (SF 13215) application form.
When filling in the form, you’ll need to specify which type of license you’re applying for, state your Federal Identification Number (FIN) (you should have received this number from the Internal Revenue Service (IRS)) and provide information about yourself and your auto dealership business.
You’ll also need to supply the following required documents to the Secretary of State:
- A $25,000 Indiana auto dealer license bond
- A criminal background check
- Your certificate as a registered retail merchant
- Your zoning affidavit
- Liability insurance – $100,000 for bodily injury to one person, $300,000 for bodily injury per accident, $50,000 for property damage
- Copy of photo ID
- Detailed photographs of your dealer location
- A copy of your franchise agreement (if applicable)
- Sales tax registration ID
In addition, you’ll need to pay a $30 license fee if you’re a first-time applicant.
You may also need to show that you’re in good standing with the Indiana Department of Motor Vehicles (DMV), the Indiana Department of Revenue and the state police department before your license will be issued.
Get Your Indiana Auto Dealer Bond
Posting an auto dealer bond is an essential part of the Indiana dealer license application process. The bond guarantees that Indiana car dealers comply with state laws and regulations. Essentially, the purpose of the bond is to protect the state and public of Indiana from dishonest and unscrupulous business practices.
All licensed dealers in the State of Indiana are required to post a $25,000 motor vehicle dealer bond. If the car dealership acts in a fraudulent way, a claim can be made against this bond. If a claim is made, the company that provided the surety bond will investigate the case and, if it is legitimate, the claimant can be compensated up to the full bond amount.
Bond companies charge businesses a percentage of the total bond amount. This is called the bond cost or bond premium and is generally between 1% and 3% of the bond amount, which in this case would work out to around $250-$750.
The cost of your auto dealer bond is determined by your personal credit score, your financial history and your business experience. The company providing your Indiana auto dealer bond may also carry out a criminal background check.
If the results of this background check indicate that bonding you is low risk, your surety bond cost will be minimal. If the company believes you are high risk, you’ll be asked to pay a higher bond premium. A bad credit surety bond can cost up to 5% to 10% of the total bond amount.
Take a look at our surety bond cost page to find out more or fill in our online surety bond application form for a free, no obligation bond quote. Alternatively, if you’d like to speak to an expert, or learn more about our services, call us at 877.514.5146 or email us at [email protected]
Submit Your Application
Once you’ve collected your required documents, secured your surety bond and checked if your premises meet all relevant licensing requirements, it’s time to submit your application to the Secretary of State.
You’ll also need to submit your license fees and proof that you’ve completed the required dealership training course.
Renew Your License Yearly
Your motor vehicle dealer license will need to be renewed every year to keep your business legal and compliant.
How Much Does It Cost to Get a Dealer License in Indiana?
Your dealer license application will cost $30. You’ll also need to pay $125 for your first two dealer plates and $25 for each additional plate your dealership needs.
How Many Cars Can I Sell in Indiana Without a License?
You can sell up to 12 cars per year in Indiana without a license.
Can I Get an Indiana Auto Dealer License Without a Lot?
All Indiana motor vehicle dealer businesses need a location where they can display vehicles for sale as part of their dealer license requirements. This space must be large enough to accommodate up to 10 vehicles of the type you wish to sell.
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