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Dealer-related Information in Alabama

The state of Alabama has made it easy to learn how to process cars as a retailer, wholesaler, rebuilder, or reconditioner. For the basics of becoming a dealer, first review the licensing requirements. The Department of Revenue also offers information that concerns motor vehicle dealers.

Here are some things you should know about car dealerships in Alabama:

  • Any person or business that has a contract or a franchise that buys, sells, exchanges or negotiates to sell vehicles is required to have a dealer licensed. Anyone without a franchise or contract, typically used vehicles, that

    buys, sells, exchanges or negotiates to sell 5 vehicles or more vehicles in 1 year also needs a dealer license. Even a pawnshop, that handles titles, may be considered a used motor vehicle dealer under Alabama Code Section 40-12-51.

  • Dealer licensing fees are based on the population of the city or county in which the business will be located. Fees range from $46 to $211
  • Sellers of motorcycles, golf carts, mopeds, off-road motorcycles, and ATVs need licenses under Section 40-12-62 of the Alabama Code unless you receive motor vehicles as trade-ins, in which case the motorcycle shop will need the usual regulatory and business licenses required for automobile dealers. A wholesale license is sufficient if the vehicles are sold to licensed dealers. If sales are made to retail customers, you'll need a retail license.
  • Your dealer license is not transferable to another county.
  • If your dealership moves to a new location in the same county that requires a higher license fee, you must pay the difference. If you move to a new location in the same county that requires a less expensive license, however, there is no refund of the difference.
  • If you open a second location in the same city, you can purchase a license for half the price of the first location (you must have a license for each location). If you are outside city limits, you must pay the full price ($45) for each location.
  • You can apply or renew your dealer license online. You can be prepared for is what is required to renew or apply for a dealers license by reading the online instructions.

Dealer Tags

A licensed car dealer may apply for dealer tags at the courthouse in the county where the business is licensed. Questions about dealer tags should be addressed to the Motor Vehicle Division at (334) 242-9000.

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