Getting a used car dealer license in Illinois

In Illinois, used-car dealers are licensed by Illinois Secretary of State Vehicle Services, Dealer Licensing.

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. The state also inspects the location.

This page gathers what a new independent lot needs, each fact linked to the official source it came from.

Sources checked

At a glance

License
Used vehicles only dealer license ilsos.gov (source, opens in a new tab)
Issued by
Illinois Secretary of State Vehicle Services, Dealer Licensing ilsos.gov (source, opens in a new tab)
Surety bond
$50,000 per licensed location; bond or certificate of deposit. Main page says first 60 months. ilsos.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
First-time used dealer: eight-hour Secretary of State course (scheduled 8am–5pm). Application copy and license fee must arrive at least two weeks before class. ilsos.gov (source, opens in a new tab)
Official fees
License $1,000 annually, $500 for second-half initial applicants; master plate $45, duplicate $13, additional duplicates $151. ilsos.gov (source, opens in a new tab)
Renewal
Annual, expires Dec 31; $1,000 license renewal. VSD866 lists recovery fee $0 at ≤25 sales, $150 at 26–199, $300 at 200–299, $500 at ≥300, plus additional-location charges. ilsos.gov (source, opens in a new tab)
Site inspection
Yes: Secretary of State investigation/site inspection after complete application review; premises must be ready when submitted. ilsos.gov (source, opens in a new tab)

Step by step

  1. Make sure you need a used dealer license

    The Illinois Secretary of State's Dealer Licensing unit issues the used-vehicles-only dealer license. Illinois has no standalone wholesale, auction or broker license for auction access, and new-car, buy-here-pay-here and rebuilder permissions differ. ilsos.gov › dealer-remitter.html (source, opens in a new tab) ilsos.gov › dealer-training.html (source, opens in a new tab)

  2. Set up the business, site and zoning

    Register for Retailers' Occupation Tax, set up the entity and sign a lease. Get local zoning certification on form VSD481 (in Chicago, a city business license is accepted under the instructions). The business address and phone can't be the same as your home's. ilsos.gov › vsd324.pdf (source, opens in a new tab) ilsos.gov › vsd659.pdf (source, opens in a new tab)

  3. Get the premises ready before you apply

    The lot must be surfaced with rock or better and lit after sunset while you're open. You need a fixed office with furnishings, electricity and a listed phone, separate from any residence, and no other licensed dealer can share the site. Staff it at least five days a week, four consecutive hours a day, and keep transaction records for three years. A permanent business-name sign must be visible from the road and lit after sunset, with your name and hours on the front entrance. A previous dealer still licensed at the address is a common snag. ilsos.gov › rtds21.pdf (source, opens in a new tab) ilsos.gov › vsd659.pdf (source, opens in a new tab)

  4. Book the course early

    First-time used dealers take the Secretary of State's eight-hour course (8 a.m. to 5 p.m.). Send a copy of your application and the license fee at least two weeks before class; missing that deadline delays everything. ilsos.gov › dealer-remitter.html (source, opens in a new tab) ilsos.gov › dealer-training.html (source, opens in a new tab)

  5. Fingerprints, bond and insurance

    Get live-scan fingerprints and keep the receipt. You need a $50,000 bond or certificate of deposit for each location and liability insurance of $100,000 per person, $300,000 per accident and $50,000 property damage. Arrange repairs on site or by contract. You don't pay that amount: a surety company charges you a premium, a fraction of it, set mainly by your credit. ilsos.gov › vsd324.pdf (source, opens in a new tab) ilsos.gov › vsd659.pdf (source, opens in a new tab)

  6. Submit the full packet

    Send the original application (VSD324, instructions on VSD659), the zoning certification and the plate fees. The license is $1,000 a year, or $500 if you apply in the second half of the year; the master plate is $45. Incomplete packets are returned. ilsos.gov › dealer-training.html (source, opens in a new tab) ilsos.gov › vsd659.pdf (source, opens in a new tab)

  7. Investigation and inspection

    The Secretary of State investigates and inspects the site after reviewing the complete application. That takes about 2–4 weeks. ilsos.gov › vsd659.pdf (source, opens in a new tab) ilsos.gov › dealer-remitter.html (source, opens in a new tab)

  8. Keep it current

    The license renews every year by December 31 for $1,000. A recovery-fund fee also applies once you sell more than 25 vehicles a year: $150 at 26–199 sales, $300 at 200–299 and $500 at 300 or more. ilsos.gov › vsd324.pdf (source, opens in a new tab) ilsos.gov › vsd866.pdf (source, opens in a new tab)

The location

Display lot
Lot surfaced with rock or better, illuminated after sunset when open. ilsos.gov (source, opens in a new tab)
Office
Fixed office with furnishings, electricity and listed telephone; business separate from residence and no two licensed entities at one site. Staff at least five days/week, four consecutive hours/day; transaction records three years. ilsos.gov (source, opens in a new tab)
Sign
Permanent business-name sign visible from road and illuminated when open after sunset; name and hours on front entrance. ilsos.gov (source, opens in a new tab)
Zoning and home-based lots
Local zoning certification VSD481; Chicago business license accepted under instructions. Business address/phone cannot be same as residence. ilsos.gov (source, opens in a new tab)

Before you apply

Retailers Occupation Tax registration, entity/ownership disclosures, approved live-scan fingerprint receipt, lease, zoning; liability $100,000/person, $300,000/accident, $50,000 property through Dec 31. Repair arrangements on site or by contract. ilsos.gov (source, opens in a new tab)

Forms

VSD324 dealer application; VSD659 instructions; VSD481 zoning certification; RTDS21 premises requirements; VSD866 recovery-fund affirmation when applicable. Individual forms linked from official directory. ilsos.gov (source, opens in a new tab)

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

Not the license you’re after?

Illinois does not issue standalone wholesale, auction or broker licenses for auction access. New/franchised, buy-here-pay-here designation and repair/rebuilder permissions differ. ilsos.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: maintaining a separate commercial site with required staffed hours before application review.

Easy mistakes:

Questions

How much does an Illinois dealer license cost?

$1,000 a year ($500 if you first apply in the second half of the year), plus $45 for the master plate. The premium on the $50,000 bond, insurance and the site cost more. ilsos.gov › vsd324.pdf (source, opens in a new tab) ilsos.gov › dealer-training.html (source, opens in a new tab)

Can I run a dealership from home in Illinois?

No. The business must be separate from your residence, and its address and phone can't be your home's. ilsos.gov › rtds21.pdf (source, opens in a new tab) ilsos.gov › vsd659.pdf (source, opens in a new tab)

How long does it take?

About 2–4 weeks for the Secretary of State to process and inspect a complete application. Booking the course and getting the premises ready come first. ilsos.gov › dealer-remitter.html (source, opens in a new tab) ilsos.gov › dealer-training.html (source, opens in a new tab)

What's the recovery-fund fee?

Nothing at 25 sales a year or fewer; $150 at 26–199, $300 at 200–299 and $500 at 300 or more. ilsos.gov › vsd324.pdf (source, opens in a new tab) ilsos.gov › vsd866.pdf (source, opens in a new tab)

Sources

Not affiliated with the Illinois Secretary of State. Not legal advice. Requirements change; always confirm with the state.