Getting a used car dealer license in Alabama
In Alabama, used-car dealers are licensed by Alabama Department of Revenue, Motor Vehicle Division.
Before your first retail sale you’ll need a $50,000 surety bond, a pre-licensing course and a business location that meets the state’s rules.
This page gathers what a new independent lot needs, each fact linked to the official source it came from.
At a glance
- License
- Master Dealer License, used motor vehicle dealer revenue.alabama.gov (source, opens in a new tab)
- Issued by
- Alabama Department of Revenue, Motor Vehicle Division revenue.alabama.gov (source, opens in a new tab)
- Surety bond
- $50,000 continuous bond; also satisfies the Designated Agent bond requirement. revenue.alabama.gov (source, opens in a new tab) That’s the bond’s face amount, not what you pay: a surety company charges a yearly premium, usually a small percentage of it, set mainly by your credit.
- Pre-licensing course
- Dealers must become Designated Agents and complete online DA training for title access. revenue.alabama.gov (source, opens in a new tab)
- Official fees
- $125 master license; $5 each additional location; $25 dealer plate ($17 motorcycle). No proration. revenue.alabama.gov (source, opens in a new tab)
- Renewal
- Annual October 1 renewal; $125 license fee; 30-day grace period then 15% penalty. revenue.alabama.gov (source, opens in a new tab)
Step by step
-
Know which license you need
Alabama's Department of Revenue Motor Vehicle Division issues a Master Dealer License, and used motor vehicle dealing is one activity under it. Wholesale, new and rebuilder activities are distinct, and off-site sales need separate authorization. revenue.alabama.gov › dealer-license (source, opens in a new tab)
-
Set up the business
Get an FEIN (unless you're an individual owner), an Alabama sales tax number, and your ownership and ID documents. revenue.alabama.gov › dealer-license (source, opens in a new tab) revenue.alabama.gov › 810-5-12-.01-Clean.pdf (source, opens in a new tab)
-
Find a permanent location
This is usually the hardest part. You need a permanent, separately identifiable business location in a business zone, with your inventory displayed there and hours posted. Shared, rotating or virtual offices, and more than one dealer under one roof, are restricted. Add a permanent sign with the business name and dealer type in letters at least 6 inches high, visible from the street or from 50 yards, whichever is greater. revenue.alabama.gov › 810-5-12-.01-Clean.pdf (source, opens in a new tab) revenue.alabama.gov › dealer-license (source, opens in a new tab)
-
Apply online
Apply through MyDMV/Alabama Partner. The application generates the transmittal, bond and insurance forms you complete next. The master license is $125, with no proration. revenue.alabama.gov › dealer-license (source, opens in a new tab)
-
Complete the bond and insurance
The $50,000 continuous bond also covers the Designated Agent bond. You need blanket vehicle liability of $25,000 per person, $50,000 per accident and $25,000 property damage, or $75,000 combined. Upload proof the location is permanent and photos of the site. Keep the entity name identical on every document. You don't pay that amount: a surety company charges you a premium, a fraction of it, set mainly by your credit. revenue.alabama.gov › dealer-license (source, opens in a new tab) revenue.alabama.gov › 810-5-12-.01-Clean.pdf (source, opens in a new tab)
-
Get approved and print your license
The Division says approval takes 3–5 business days once the required documents arrive; then you print the license. Dealer plates are $25. revenue.alabama.gov › dealer-license (source, opens in a new tab)
-
Become a Designated Agent
Before you process title transactions, set up as a Designated Agent and complete the online DA training. It's easy to overlook. revenue.alabama.gov › dealer-license (source, opens in a new tab) revenue.alabama.gov › 810-5-12-.01-Clean.pdf (source, opens in a new tab)
-
Keep it current
Renew every year by October 1 for $125. There's a 30-day grace period, then a 15% penalty. revenue.alabama.gov › dealer-license (source, opens in a new tab)
The location
- Display lot
- Inventory display at an established business location. revenue.alabama.gov (source, opens in a new tab)
- Office
- Permanent business location; submit evidence of permanence and site photos. Shared/rotating space and more than one dealer under one roof are restricted; hours posted. revenue.alabama.gov (source, opens in a new tab)
- Sign
- Permanent sign with business name and dealer type; letters at least 6 inches; visible from street or 50 yards, whichever is greater. revenue.alabama.gov (source, opens in a new tab)
- Zoning and home-based lots
- Business zoning required. revenue.alabama.gov (source, opens in a new tab)
Before you apply
FEIN except individual owners; Alabama sales-tax number; ownership/entity and ID documentation. Blanket vehicle liability: $25,000/person, $50,000/accident, $25,000 property or $75,000 combined. revenue.alabama.gov (source, opens in a new tab)
Forms
Electronic Master Dealer License application; application-generated transmittal, bond and insurance forms. Agency says these are obtained after online application. revenue.alabama.gov (source, opens in a new tab)
Get the current versions from revenue.alabama.gov; we don’t host copies.
Not the license you’re after?
Wholesale, new and rebuilder are distinct activities under master licensing; off-site sales require separate authorization. revenue.alabama.gov (source, opens in a new tab)
What trips people up
Our read of the requirements above, not official guidance or statistics.
The hardest part: securing a genuinely permanent, separately identifiable location before applying.
Easy mistakes:
- Shared/virtual office arrangements, undersized sign lettering, inconsistent entity/bond names, and overlooking Designated Agent setup.
Questions
How much does an Alabama dealer license cost?
$125 for the master license, $5 for each additional location and $25 per dealer plate. The bond premium, insurance and the location cost more. revenue.alabama.gov › dealer-license (source, opens in a new tab) revenue.alabama.gov › 810-5-12-.01-Clean.pdf (source, opens in a new tab)
How long does it take?
3–5 business days after the Division receives the required documents. revenue.alabama.gov › dealer-license (source, opens in a new tab)
What does the sign need?
The business name and dealer type in letters at least 6 inches high, visible from the street or from 50 yards, whichever is greater. revenue.alabama.gov › 810-5-12-.01-Clean.pdf (source, opens in a new tab)
Sources
Related
Report a problem with this page
Not affiliated with the Alabama Department of Revenue. Not legal advice. Requirements change; always confirm with the state.