Dealer Licensing in Illinois
Since purchasing a car will affect almost every citizen of Illinois at some point in their lives, the auto dealer industry is carefully regulated. If you are planning on becoming a new or used vehicle dealer in the state of Illinois, you will have to satisfy the requirements of several state government agencies.
Dealer Licensing Section
The Customer Services/Dealer Licensing Section of the Vehicle Services division of the Illinois Secretary of State's Office processes all forms and applications relating to motor vehicle dealers. The Dealer Licensing Section also provides other services to dealers. These include:
- Dealer, in-transit, repossessor, and manufacturer applications.
- Dealer plates.
- Certificates of Authority for dealers, rebuilders, recyclers of car parts, auctioneers, repair shops, and scrap metal processors.
- Remitter licenses and related agent ID cards.
- Dealer licensing compliance audits.
How to Apply
You'll need to fill out the Secretary of State Dealer License Application (Form VSD 324). But the real meat of what exactly you need to do, question by question, is in the Instructions for Dealer License publication. To apply for a license to sell new or used cars in Illinois, you'll need to have the following in order:
- A $20,000 bond or certificate of deposit.
- A certificate of insurance for at least $100,000 for bodily.
injury, $300,000 for each accident, and $50,000 for property damage. The dealership should be the named insured.
- A copy of your manufacturer's franchise agreement (new-vehicle dealers only).
- A copy of the lease for the dealer lot, if it's leased.
- Notice that your dealership is properly zoned.
- Corporations must prove they're in good standing with the Secretary of State's Department of Business Services.
- If you have a repair shop, you'll need to provide your hazardous waste generator number. This will be issued by the state's Environmental Protection Agency.
- Application fees (see below).
Mandatory Background Check
All dealer applicants must pay for and receive a thorough criminal background check. Previously, these were conducted by the State of Illinois and covered by the application fee, but this is no longer the case.
Applicants must be fingerprinted and use one of the following FBI-approved companies to conduct the background check before applying as a dealer. Since this has to accompany your application packet, it must be done beforehand so that you can attach the "fingerprinting receipt" to your application package. To find out more about finger printing and background checks contact the Secretary of State toll free in Illinois at (800) 252-8980.
Tax Collection Requirements
Since motor vehicle dealers collect Illinois sales tax, they also need to meet the requirements and go through the licensing process from the Illinois Department of Revenue office. The Illinois Vehicle Tax Information Guide includes dealer requirements and also covers leasing and trade-in transaction taxes.
Dealer Licensing Fees
- Certificate of Authority (dealer license) annual fee: $1,000 ($500 if after June 15).
- Supplemental Certificate of Authority annual fee (for each additional location): $100 for new cars, $50 for used (half that if after June 15).
All dealer licenses expire on December 31st each year.
Dealer Plate Fees
- Master plates annual fee: $45.
- Duplicates: $13.
- Additional ID cards: $3.
The Illinois Regulations for Vehicle Dealers is a handy pamphlet that outlines some of the laws for dealers. Topics covered include the requirements for illuminating the car lot, restrictions on some Sunday sales, and the simple form required for extended car demonstration trips.
For more information about applying for a dealer license, contact the Vehicle Services Department at the following address:
Vehicle Services Department
Dealer/Remitter Licensing Section
501 S. 2nd St., Rm 069
Springfield, IL 62756