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Sample Alabama Dealer License

Alabama Dealer License

Have you decided to start an Alabama car dealership? If so, before you can legally sell cars, there are a few requirements you must know. These demands vary from registering the company in the state, applying to the Department of Revenue for a license, obtaining an auto dealer bond, and many others.

For a complete clarification of how to get your Alabama dealer license, keep reading below! Use this Alabama auto dealer license lookup to define what you need to do to get your license.

How do you get a dealers license in Alabama?

The types of dealer licenses you can receive depend on the activities you would like to participate in:

  • New Vehicle Dealer – new vehicles
  • Used Vehicle Dealer – used vehicles
  • Wholesaler – wholesale
  • Rebuilder – rebuilding vehicles

You should represent Alabama permanent residency documents for the owner; personal data of all owners, associates, members, staff, and managers; business entity formation documents; requisites for business location; photos of your location and business sign; blanket liability insurance coverage on all vehicles-at least $25,000 for bodily injury or accident or $50,000 for combined bodily injury or accident, and $25,000 for property harm or accident or a combined single limit of $75,000 per accident; and surety bond.

Also, you’ll need to obtain the following documents: employer Identification Number (EIN) from the IRS (for all but individual owners), legal name and/or trade name documents from the Alabama Secretary of State, workers compensation insurance from the state Department of Labor, state sales tax number from the Department of Revenue (for new and used auto dealers only).

A surety bond must be posted by all applicants for dealer licenses. It serves as a safety net that protects your clients, ensuring your legal compliance. The bond amount for the Alabama car dealer is currently $25,000 but will be increased to $50,000 as of October 1, 2020. If your overall finances are in good shape, the rates that you can expect are between 0.75% and 5%.
After compiling your documents, mail them to:

Alabama Department of Revenue
Motor Vehicle Division
50 N. Ripley Street
Montgomery, AL 36104

Alabama Auto Dealer License fees are as follows: $25 fee for new vehicle dealer, used vehicle dealer, wholesale and rebuilder licenses and $5 fee for each extra business location.

Within 7 to 14 business days, the Department will review your submission. It will provide you with your license if you have met all the criteria. For detailed information about Alabama auto dealer licensing process, you can consult the Dealer License FAQs.


How do I get a dealers license without a lot in Alabama?

If you search Alabama auto dealer license holder lookup, you might find some dealers that don’t have car lots. These people have a wholesale dealer license. If you want to get a wholesale dealer license, you’ll need to go through the same steps as you would for a new or used car license, except you won’t need to secure a car lot or undergo an onsite inspection.

Like any other dealer, to protect your clients, you would be forced to carry a motor vehicle dealer bond, and that’s where Surety Bonds Direct comes in.

How much is a dealer license in Alabama?

For each license form required, the cost of your license will be $25. Note, under new and used motor vehicle dealer license designations, motor vehicle rebuilder and wholesaler licenses are automatically included in (i.e. no additional fee is needed). The registration of your company with the state of Alabama, the cost of your security bond, and other insurance costs are other expenses to consider.

How many cars can you sell in Alabama without a dealers license?

You can sell up to 4 vehicles without a dealer’s license in Alabama. Penalties would possibly be zero. They will push you to get an auto dealer license to avoid dealing with so many vehicles.

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