Getting a used car dealer license in Delaware

In Delaware, used-car dealers are licensed by Delaware Division of Motor Vehicles, Dealer Section.

Before your first retail sale you’ll need a $25,000 surety bond 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.

Sources checked · details re-checked against official sources

At a glance

License
Used motor vehicle retail dealer delcode.delaware.gov (source, opens in a new tab)
Issued by
Delaware Division of Motor Vehicles, Dealer Section delcode.delaware.gov (source, opens in a new tab)
Surety bond
Not every dealer needs a bond. A dealer that finances a retail sale itself without charging interest, and isn't already bonded with the Banking Commissioner, must file a $25,000 surety bond with the Department of Finance before getting its annual license. The DMV's dealer chapter itself has no bond requirement. delcode.delaware.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.
Official fees
DMV dealer license application $100 (renewal $50), plus a separate $100 annual motor vehicle dealer license fee paid to the Department of Finance. delcode.delaware.gov (source, opens in a new tab)
Renewal
Expires Dec 31; statutory renewal fee $50 plus annual DOR business license. Five-sales rule applies; fingerprints as described above. delcode.delaware.gov (source, opens in a new tab)
Sales to keep the license
At least five vehicle sales Jan 1–Dec 31; written good-cause exception may be granted by Director. delcode.delaware.gov (source, opens in a new tab)

Step by step

  1. Check the residency rule first

    Delaware's DMV Dealer Section licenses used vehicle retail dealers, and the owner must hold a Delaware driver's license and have lived in Delaware for at least 90 days before applying (and be at least 18). Wholesale licenses exclude retail, and new and franchise dealers follow different rules. delcode.delaware.gov › index.html (source, opens in a new tab) dmv.de.gov › ve_frm_dlrmanual.pdf (source, opens in a new tab)

  2. Request the application

    Ask the DMV Dealer Section for the initial dealer application; it isn't a public download. dmv.de.gov › index.shtml (source, opens in a new tab) delcode.delaware.gov › index.html (source, opens in a new tab)

  3. Set up the site

    You need sales and office space devoted to the dealership with room to display at least five vehicles, a phone listed in the business name, filing cabinets, and transaction records kept on site for five years. Put up a sign at least 24 by 36 inches with your approved dealership name, and get local zoning approval to send with the application. delcode.delaware.gov › index.html (source, opens in a new tab)

  4. Business license, insurance and fingerprints

    Get the annual Division of Revenue dealer business license, liability insurance, and criminal history fingerprints. delcode.delaware.gov › index.html (source, opens in a new tab) dmv.de.gov › index.shtml (source, opens in a new tab)

  5. Find out if you need a bond

    Most dealers don't. The DMV's dealer law has no bond requirement. But if you'll finance sales yourself without charging interest, and aren't already bonded with the Banking Commissioner, you must file a $25,000 surety bond with the Department of Finance before getting your annual license. You don't pay that amount: a surety company charges you a premium, a fraction of it, set mainly by your credit. delcode.delaware.gov › index.html (source, opens in a new tab) delcode.delaware.gov › index.html (source, opens in a new tab)

  6. Submit the packet and fees

    Send the complete packet with the $100 application fee. A separate $100 annual dealer license fee goes to the Department of Finance. Then you receive your license and plates. dmv.de.gov › index.shtml (source, opens in a new tab) delcode.delaware.gov › index.html (source, opens in a new tab)

  7. Keep it current, and keep selling

    The license expires December 31; renewal is $50 plus the annual Division of Revenue license. You need at least five sales between January 1 and December 31, though the Director can grant a written good-cause exception. delcode.delaware.gov › index.html (source, opens in a new tab) dmv.de.gov › index.shtml (source, opens in a new tab)

The location

Display lot
Sales/office space devoted to dealership and display capacity for at least five vehicles. delcode.delaware.gov (source, opens in a new tab)
Office
Business-name-listed telephone in office; adequate filing cabinets and on-premises transaction records retained five years. delcode.delaware.gov (source, opens in a new tab)
Sign
Sign at least 24 × 36 inches displaying approved dealership name. delcode.delaware.gov (source, opens in a new tab)
Zoning and home-based lots
Local zoning approval submitted with application. delcode.delaware.gov (source, opens in a new tab)

Before you apply

Owner must hold Delaware driver license and have 90-day Delaware residency; applicant at least 18. Criminal-history fingerprints initially and on renewal if more than five years since original licensing. Annual Division of Revenue dealer business license; liability insurance under §2118. delcode.delaware.gov (source, opens in a new tab)

Forms

Initial dealer application prescribed by DMV; request through Dealer Section contact on primary page. dmv.de.gov (source, opens in a new tab)

Get the current versions from dmv.de.gov; we don’t host copies.

Not the license you’re after?

Wholesale license excludes retail; new/franchised dealers have different rules, including residency exemption. delcode.delaware.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: meeting the 90-day owner-residency rule before applying, then sustaining five annual sales.

Easy mistakes:

Questions

Do I need a bond for a Delaware dealer license?

Only if you finance sales yourself without charging interest and aren't already bonded with the Banking Commissioner; then it's $25,000, filed with the Department of Finance. The DMV's dealer law has no general bond requirement. delcode.delaware.gov › index.html (source, opens in a new tab) delcode.delaware.gov › index.html (source, opens in a new tab)

How much does a Delaware dealer license cost?

$100 to apply ($50 to renew) plus a $100 annual dealer license fee to the Department of Finance. Insurance and the site cost more. delcode.delaware.gov › index.html (source, opens in a new tab) delcode.delaware.gov › index.html (source, opens in a new tab)

Can I get a license if I just moved to Delaware?

Not right away. The owner needs a Delaware driver's license and 90 days of Delaware residency before applying. delcode.delaware.gov › index.html (source, opens in a new tab)

Is there a minimum number of sales?

Yes: at least five sales a calendar year, unless the Director grants a written good-cause exception. delcode.delaware.gov › index.html (source, opens in a new tab)

Sources

Not affiliated with the Delaware DMV. Not legal advice. Requirements change; always confirm with the state.