Dealer Licensing in New York
To sell vehicles retail or wholesale in New York, you must be registered as a dealership with the Division of Vehicle Safety Services at the New York Department of Motor Vehicles. The process of becoming an auto dealership is fairly involved, as the industry is highly regulated, but if you take it step by step you'll find it more manageable. Here's what you need to know to get started.
First off, do you even need to register as a dealer? Obviously, you are permitted to sell a vehicle in the newspaper as a private-party transaction without a dealer license. However, you must register as a dealer if the following applies to you:
- You bought the vehicles in order to resell them AND one of the following:
- You display three or more vehicles for sale at one time on premises that you own or control
- You display three or more vehicles for sale within one month at such a location
- You sell six or more vehicles in a calendar year
Note that the above applies to dealers of motor vehicles, motorcycles, and trailers, not mobile home trailers.
If you've established that you're required to register as a dealer, the first thing to do is read the Motor Vehicle Dealers and Transporters Regulations publication from the DMV. Forty-five pages of requirements, regulations, and responsibilities might turn you off to the whole idea (not to mention another 45 pages of sample dealer forms)―but again, it's all doable if you're committed to it, so soldier on.
You'll need to lay the groundwork for registering as a dealer by obtaining the following:
- A business certificate from your county clerk
- If you'll have employees, a federal employee ID number and proof of worker's compensation and disability insurance coverage
- A sales tax number and a copy of the Certificate of Authority issued by the New York State Department of Taxation and Finance (assuming you will collect sales tax)
- Proof of insurance that will cover vehicles owned or operated by the dealer and sporting dealer plates
- A surety bond in an amount ranging from $20,000 to $50,000, depending on the type of dealership (see Form VS-1.1 for a breakdown)
- Franchise agreements with manufacturers of new vehicles you intend to sell (not required for selling used vehicles)
- A statement of ownership or permission to use the place of business (Form VS-19)
- A photocopy of the driver license or non-driver photo ID from the company's owner, president, or partner
You'll need to include all items in the above list when you send in your application, along with the appropriate application and business fees. You'll also need to have the following, which will be inspected as part of the review process for your application (these are explained further in the regulations:
- Satisfactory premises in the state of New York with proper security for business records and display space for vehicles
- A permanent sign
- Bills of sale and other forms dealers use (you will need to buy these from the DMV; see Dealer Forms), and a book of registry for record keeping
Start by downloading Form VS-1 (Original Facility Application) and Form VS-1.1 (Instructions for Completing Form VS-1), which explain the above requirements in greater detail.
The application fee is $37.50 and is nonrefundable. That's not the big-ticket item, however―you must also include a two-year business fee, which is essentially your dealer registration. This charge is $450 for motor vehicle dealers; add an additional $30 to sell ATVs and $50 to sell boats.
Form VS-1.1 lists application fees and two-year business fees for other types of businesses you may wish to register at the same time, such as a repair shop, dismantler, or transporter. At least this fee, unlike the smaller application fee, is refundable in the unfortunate event that your application doesn't succeed.
Send your completed and signed application along with a check or money order for all the required fees (no starter checks, please) payable to the "Commissioner of Motor Vehicles" via U.S. Postal Service to:
- Bureau of Consumer and Facility Services
- Attention: Application Unit
- P.O. Box 2700
- Albany, NY 12220-0700
If you use an express mail service, the address is:
- Vehicle Safety
- Department of Motor Vehicles
- ESP-Swan St. Bldg.
- Core 1, Room 110
- Albany, NY 12228
It typically takes six to eight weeks to process an application; expect a visit from a representative of the DMV to interview you and check out your place of business during this time. If your application is refused, the DMV will refund the business fees you paid once you return the refund voucher. But if you're accepted, congratulations.
Your facility registration is valid for two years and in most cases you may renew online.
Find more information and answers to your questions on the DMV's dealer FAQ page.
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