How to Get an Auto Dealer License in New York

Published: Feb 15, 2016
Follow the steps below to learn how to get an auto dealer license in New York.Thinking about starting an auto dealership in New York? A new endeavor like this one is surely well-timed now, with auto sales hitting new records and the overall economy steadily stabilizing.

Naturally, launching a new auto business is a daunting task, but equipped with the right information, you’ll be off to a smooth start. What are the most important things you need to know, then?

To make sure your dealership complies with all state regulations, you need to get a dealer license in New York. This is the lengthiest process that you have to go through before you can make your first car sale. It also includes getting a New York auto dealer bond, an important part of the licensing prerequisites.

There are plenty of other requirements that you have to fulfill to get your license, so let’s delve straight into them.

Dealer License Types

Your first step in getting your auto dealer license in New York is to decide what type of dealership you would like to run. Depending on your choice, you will need to obtain the right type of license from the New York Department of Motor Vehicles. The main license categories include:

  • motor vehicle dealer/transporter
  • repair shop
  • inspection station
  • junk and salvage
  • snowmobile dealer

Each license type is required if you display more than three vehicles for sale at one premise (or within one month) and if you sell more than five vehicles for 12 months. Now let’s look at the actual requirements for getting licensed in New York.

NY Dealer License Requirements

Below are the main requirements for obtaining an auto dealer license in New York.
Once you’ve identified what kind of dealership you would like to start, it’s time to go through the main requirements you have to meet. A very useful resource is the DMV Commissioner’s Regulations for Motor Vehicle Dealers and Transporters document.

The starting point is your Original Facility Application. Besides completing it, you would need to include a range of other documents that you have to obtain before applying.

The main requirements include:

  • Your Certificate of Authority and Sales Tax ID number, which you can get issued by the New York State Department of Taxation and Finance (DTF);
  • Lease or ownership documents for your business location;
  • Workers compensation insurance in case you are employing people;
  • A New York auto dealer bond;
  • Your corporation, LLC or partnership company documents;
  • Proof that you have obtained a dealer’s starter kit and dealership signs;
  • Payment of all applicable fees;
  • Copies of IDs of all individuals listed on your application.

It is important to compile all the necessary documents before submitting your application, as it will be rejected if incomplete. If you have duly complied with all requirements, the DMV will provide you with your certificate of registration, MV-50s (Retail Certificates of Sale) and a dealer plate letter if needed.

Getting Your New York Auto Dealer Bond

by Daria / epicantus
One of the crucial elements in your New York dealer license application is obtaining an auto dealer bond. Depending on your business, you might need to get bonded for one of the following bond amounts:

  • $10,000 for selling less than 200 vehicles per year
  • $25,000 for selling more than 200 vehicles per year
  • $50,000 for franchised dealers selling cars, light trucks, SUVs, and the like

If you never had to get bonded before, it’s useful to look at the concept behind it in detail.

Authorities like the New York DMV require dealers to get a motor vehicle dealer bond in order to safeguard the state and its citizens from fraudulent business practices. Thus, the bond works as an extra layer of protection that your dealership will follow all applicable rules that govern car sales in the state.

In practical terms, your surety backs your dealership, called the principal, and guarantees in front of the state authority, referred to as the obligee, that your business will act lawfully.

When you set to obtain your New York auto dealer bond, you need to apply with a surety. It examines your financial and business situation and determines your surety bond cost. It is, in fact, only a fraction of the surety bond amount you are required to post.

The specific percentage in your case is determined on the basis of your financial strength. The better your financials are, especially your personal credit score, the smaller your bond price will be. However, bad credit bonding is also possible, and at reasonable costs too, when you work with the right surety agency.

With good background knowledge in the licensing procedure, you’re ready for a solid start with your New York auto dealership.

Ready to launch your licensing and get bonded? Apply online today for your free bond quote! Should you encounter any questions, don’t hesitate to give us a call at 877.514.5146 or send your inquiry to info@suretybonds.org.

The following two tabs change content below.
Victor Lance is the founder and president of Lance Surety Bond Associates, Inc. He began his career as an officer in the U.S. Marine Corps, serving two combat tours. As president of Lance Surety, he now focuses on educating and assisting small businesses throughout the country with various license and bond requirements. Victor graduated from Villanova University with a degree in Business Administration and holds a Masters in Business Administration (MBA) from the University of Michigan's Ross School of Business.