How to Get a Vermont Dealer License [2024 Guide]

Auto dealers in Vermont have to undergo an administrative procedure with state authorities. You need to obtain a Vermont dealer license in order to start your operations in legal compliance. 

The licensing process includes fulfilling state requirements set for car dealers. Among them is posting an auto dealer bond. It guarantees you will follow the law in your professional activities. 

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In the guide below, you can find out the essential details about launching your car business. 

1. Determine the right auto dealer license type 

The Department of Motor Vehicles (DMV) at the state Agency Transportation issues licenses for car dealerships in Vermont. The license types that you can obtain are:

• New Car (NCD)
• Used Car (UCD)
• Motorcycle/Motor-Driven Cycle (DLM)
• Snowmobile (SMD)
• Trailer (DLT)
• Motorboat (MBD)
• All-Terrain Vehicle (ATV)
• Farm Equipment (DLF)
• Highway Building Equipment ( DLH)
• Auction (ACD)
• Finance Car (FCD)

2. Get to know the Vermont dealer license requirements

The DMV has defined a list of criteria that you have to fulfill in order to get a Vermont dealer license. They are as follows:

• Information about business owners and officers
• Business entity details
• Good Standing Declarations 
• Franchise agreement (new vehicle dealers)
• Proof of ownership or lease of the business location (Vermont used car dealers and new dealers)
• Business location requirements - open at least 146 per calendar year, building of at least 1,200 sq. ft. (ATV, snowmobile, boat, auction and finance dealers are exempt from this) 
• Insurance for dealer plates
• Surety bond 

3. Prepare your paperwork

To start the licensing process, you need to fill in the Dealer Application Form. You have to prepare proof of meeting the requirements in the previous section as well. 

Additionally, you have to obtain the following documents from other authorities:

• Zoning compliance documents for your business location from your city or town
• Criminal background check for owners and officers from the Vermont Crime Information Center

You can find further information about the licensing requirements in the New Vermont Dealer Information Packet. 

4. Obtain the necessary Vermont auto dealer bond 

All applicants for a license have to supply a Vermont auto dealer bond. It works as a protection mechanism that guarantees the rights of your customers. You have to provide it on the official bond form. 

The bond amounts are the following, based on your annual volume of sales:

• $35,000 for all new applicants and for more than 251 vehicles
• $30,000 for 101-250 vehicles
• $25,000 for 25-100 vehicles
• $20,000 for less than 25 vehicles

The bonding process entails that you pay a small fraction of the required amount. It is called the premium and is based on the strength of your personal and business finances. If they are in good shape, you can expect rates between 0.75% and 5%. The surety provider will consider your personal credit score, company finances, and fixed and liquid assets when assessing your premium. 

5. Apply with your full document set

When you’re ready with all your paperwork, mail it to:

Vermont Agency of Transportation

Department of Motor Vehicles

120 State Street

Montpelier, Vermont 05603-000

The licensing fees for one year are the following (multiply by two if applying for a two-year license):

• $503 for a new car, used car, auction, and finance car licenses
• $123 for trailer and highway building equipment licenses
• $78 for farm equipment licenses
• $62 for ATV and motorcycle licenses
• $55 for snowmobile licenses
• $42 for motorboat licenses

Within 6 weeks of applying, you will receive an answer about your application. If you satisfy all requirements, you will get your Vermont dealer license. 

You get between 1 and 3 plates, depending on the license type. If you want to purchase additional plates, their number depends on your actual or projected sales:

• Under 20 sales: 0 
• 20–49 sales: 1 
• 50–99 sales: up to 5 
• 100–249 sales: up to 12 
• 250–499 sales: up to 17 
• 500–749 sales: up to 27 
• 750–999 sales: up to 37 
• 1,000–1,499 sales: up to 47 
• 1,500 or more: up to 57 

6. Renew your license

The licensing period for auto dealers in Vermont is one year, but you can also apply for a two-year license. In both cases, you have to renew your license before its expiration date. When applying for a renewal, you have to supply the necessary documents, prolong your bond coverage, and pay one- or two-year license fees, depending on the length of the new license. 

Want to know more details about obtaining your Vermont dealer license and bond? You can reach us at 877.514.5146.