Getting a used car dealer license in Massachusetts

In Massachusetts, used-car dealers are licensed by the police commissioner in Boston, or the licensing authority of the city or town where the business is located.

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
Class 2 used car dealer. Massachusetts RMV dealer plates are separate malegislature.gov (source, opens in a new tab)
Issued by
The police commissioner in Boston, or the licensing authority of the city or town where the business is located malegislature.gov (source, opens in a new tab)
Surety bond
$25,000 bond or municipal-approved equivalent CD/irrevocable letter of credit. Separate bond for each business name and each city/town. malegislature.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.

Step by step

  1. Know the two layers

    In Massachusetts your used car dealer license is a Class 2 license from the city or town where the business is located, not from the state. Dealer plates come separately from the RMV, and they aren't the license. Class 1 covers new and franchise dealers, and Class 3 junk and parts businesses. malegislature.gov › Section59 (source, opens in a new tab) malegislature.gov › Section58 (source, opens in a new tab)

  2. Start with your town, before you choose a property

    Each city or town sets its own application, approvals and fee, so one town's rules don't carry over to another. Ask your town's licensing authority (often the police licensing unit or a license commission) what it requires before you sign a lease. Settling the local conditions is usually the hardest part. malegislature.gov › Section58 (source, opens in a new tab) mass.gov › apply-for-a-dealer-registration (source, opens in a new tab)

  3. Arrange repair access

    State law requires you to have, or show access to, repair facilities good enough to meet your warranty obligations. malegislature.gov › Section58 (source, opens in a new tab)

  4. Get the $25,000 bond

    You need a $25,000 bond, or a certificate of deposit or irrevocable letter of credit your town approves, and a separate one for each business name and each city or town you operate in. You don't pay that amount: a surety company charges you a premium, a fraction of it, set mainly by your credit. malegislature.gov › Section58 (source, opens in a new tab)

  5. Apply to your town

    Submit the town's Class 2 application with the bond and your repair-access evidence, and get the local approvals it asks for. malegislature.gov › Section58 (source, opens in a new tab) mass.gov › apply-for-a-dealer-registration (source, opens in a new tab)

  6. Then apply for dealer plates

    Once you hold the town's license, apply to the RMV for dealer plates if you need them. malegislature.gov › Section58 (source, opens in a new tab) mass.gov › apply-for-a-dealer-registration (source, opens in a new tab)

How it works in Boston, Worcester and Springfield

The three largest cities show how much the process varies. If you're elsewhere, contact your own town's licensing authority.

Boston
Licensed by the Boston Police Licensing Unit; the fee is $200. You need approval from both the Zoning Board and the Committee on Licensing, which sets how many vehicles the site may hold, plus the deed or lease with a plot plan, Use and Occupancy and Use of Premise permits, a notarized affidavit of repair facilities (or a service contract), and the $25,000 bond, valid January 1 to December 31. police.boston.gov › become-an-approved-motor-vehicle-dealer (source, opens in a new tab)
Worcester
Licensed by the Worcester Police License Division; the fee is $100, and licenses expire December 31. You need a plot plan, a letter from the property owner, zoning, health and code sign-offs, a business certificate (unless you're a corporation without a DBA) and the $25,000 bond. Planning Board approval is needed for 16 or more vehicles. worcesterma.gov › dealers-license.pdf (source, opens in a new tab)
Springfield
Licensed through the License Commission; the city lists $225 for a new license and $200 to renew (state law caps the license fee at $200, so ask what the extra $25 is for), and the process takes 30–45 business days. Class 2 licenses need a special permit; the application goes through a tax certification review and a code enforcement inspection. springfield-ma.gov › PROCESS_TO_OBTAIN_EACH_LICENSE_TYPE_UPDATED.pdf (source, opens in a new tab) malegislature.gov › Section59 (source, opens in a new tab)

The location

Office
Repair-facility access required. malegislature.gov (source, opens in a new tab)

Before you apply

Bond/equivalent and access to sufficient repair facilities for warranty obligations. malegislature.gov (source, opens in a new tab)

Forms

Municipal Class 2 application; bond/equivalent; repair-access evidence. malegislature.gov (source, opens in a new tab)

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

Not the license you’re after?

Class 1 is new/franchised; Class 3 covers motor-vehicle junk/parts activity. Class 2 is used retail. malegislature.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: resolving local licensing and repair-facility conditions before choosing a property.

Easy mistakes:

Questions

Who issues a used car dealer license in Massachusetts?

In Boston, the police commissioner; everywhere else, your city or town's licensing authority. They issue the Class 2 license. The RMV only issues dealer plates, separately. malegislature.gov › Section59 (source, opens in a new tab) malegislature.gov › Section58 (source, opens in a new tab)

How much does a Massachusetts dealer license cost?

Each town sets its own fee, which state law caps at $200 (G.L. c.140 §59): for example $200 in Boston and $100 in Worcester. Springfield lists $225 for a new license and $200 to renew, so ask the city what the extra $25 covers. On top of that you pay a premium on the $25,000 bond. malegislature.gov › Section58 (source, opens in a new tab) malegislature.gov › Section59 (source, opens in a new tab)

Do I need a separate bond for a second location?

Yes, if it's in another city or town, or under another business name: each needs its own $25,000 bond. malegislature.gov › Section58 (source, opens in a new tab)

Do I need a repair shop?

You need repair facilities, or access to them, sufficient to meet your warranty obligations. malegislature.gov › Section58 (source, opens in a new tab)

Sources

Not affiliated with the Massachusetts RMV. Not legal advice. Requirements change; always confirm with the state.