The Full New York Dealer License Guide (2021)
Thinking about starting an auto dealership in New York? You will have to obtain a New York dealer license, so that you can launch your operations in legal compliance.
You need a license if you display more than 3 vehicles for sale at one premise or within one month, and if you sell more than 5 vehicles for 12 months.
Naturally, launching a new business is a daunting task, but equipped with the right information, you’ll be off to a smooth start. You have to get acquainted with the licensing requirements that you have to meet. Getting an auto dealer bond is among the major ones.
There is a list of other criteria that you have to fulfill to get your NY car dealer license, so let’s delve straight into them in the guide below.
1. Find out the right dealer license type
Your first step is to decide what type of dealership you would like to run. Depending on your choice, you will need to obtain the right license from the New York Department of Motor Vehicles (DMV). The main license categories include:
- New Retail Dealer
- Used/Other Retail Dealer
- Wholesale Dealer
- Boat Dealer
- ATV Dealer
- Yacht Broker
2. Get to know the New York dealer license requirements
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. They include providing the following:
- Personal information about owners and officers
- Business entity information
- Copies of IDs of all individuals listed on your application
- Lease or ownership documents for your business location
- Business location requirements (telephone line, display area, business sign)
- Workers compensation insurance in case you are employing people
- Proof that you have obtained a dealer’s starter kit and dealership signs
- Statement of the need for transporter plates (for transporters only)
- Franchise agreement (for new retail dealers)
- Surety bond (for new, used/other and NY wholesale dealer licenses)
You can consult the DMV Commissioner’s Regulations for Motor Vehicle Dealers and Transporters for additional information.
3. Prepare your paperwork
Besides filling it in and fulfilling the requirements noted in the previous section, you need to include a range of other documents from other authorities:
- Certificate of Authority and Sales Tax ID number from the New York State Department of Taxation and Finance (DTF)
- Business entity formation documents from the Department of State, Division of Corporations, State Records & UCC
- Employer Identification Number (EIN) from the IRS
4. Obtain the necessary New York auto dealer bond
One of the crucial criteria for obtaining a NY auto dealer license is posting a surety bond. You have to provide it in the state’s official form.
The bond is required in order to safeguard the state and its citizens from fraudulent business practices. Thus, it works as an extra layer of protection that your dealership will follow all applicable rules that govern car sales in the state.
The amounts for the New York auto dealer bond are:
- $20,000 for selling less than 50 vehicles per year and $100,000 for selling more than 50 vehicles per year – for NY used car dealer license or wholesale license
- $50,000 for new car dealers selling cars, light trucks, SUVs, and the like
If you are selling trailers, motorcycles, vehicles over 10,000 pounds, ATVs, snowmobiles and boats, you don’t have to post a bond.
To get bonded, you need to pay a small fraction of the required amount. 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. The typical rates for applicants with solid finances are between 0.75% and 5%.
5. Apply with your full document set
Whenever you have collected all necessary documents and filled in the application form, mail them to:
Bureau of Consumer & Facility Services
P.O. Box 2700
Albany, NY 12220-0700
The application and business fees that you have to cover amount to $487.50, plus MV-50 fee of $260.
After the DMV receives your application, you will get a visit from an Automotive Facilities Inspector to check your business location and records. They will ensure that you have all the items from the Dealer’s Starter Kit (Book of Registry (Police Book), Bills of sale (Retail Certificate of Sale MV-50), Odometer Statements and Warranty Forms).
If you have duly complied with all requirements, the DMV will provide you with your certificate of registration, MV-50s, and a dealer plate letter if needed.
6. Undergo the renewal process biennially
The licensing period of New York dealer licenses is two years. You have to renew your license before its expiration date if you want to continue your dealer operations. You can review the renewal steps on the DMV’s website.
For any questions about the New York dealer license and bond, you can get in touch by calling us at 877.514.5146.
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