Dealer Licensing in Massachusetts
In Massachusetts, dealer licenses are issued on the city and town level at municipal offices. This means the process for obtaining your MA dealer license will differ from municipality to municipality.
We’ll help you with the general guidelines below—to learn about the specific steps you’ll need to take, get in touch with your local licensing board.
MA Car Dealer Classes
Section 58 of the Massachusetts General Laws gives detailed explanations of Massachusetts’ different dealer licenses; we’ve given you a basic outline below.
Class 1 Dealer License
You need a Class 1 Massachusetts dealer license if you’re selling new motor vehicles.
As a new motor vehicle dealer:
- Your primary business must be selling new motor vehicles.
- Purchasing or selling used vehicles must be secondary.
- You must be recognized as an agent AND have a contract with the manufacturer(s) of the vehicles(s) you sell.
- Your car dealership must have repair facilities on site to repair vehicles under warranty.
Class 2 MA Dealer License
You need a Class 2 dealer license if your primary business is selling used motor vehicles.
As a Class 2 licensee, you must post a $25,000 surety bond OR an equivalent proof of financial responsibility approved by your local business licensing authority.
Class 3 Massachusetts Dealer License
You need a Class 3 motor vehicle license—or, a “junk license”—if your primary business is:
- Buying used motor vehicles to remodel, take apart, or rebuild and sell.
- Buying or selling used parts or tires.
- Assembling used motor vehicle parts.
MA Dealer License Requirements
Application requirements will vary depending on where you are applying and what type of dealer license.
In general, you’ll need to provide the following items when applying for your Massachusetts car dealer license:
- A zoning application form.
- The applicable Articles/Certificate of Organization OR registration if your business will be a:
- Limited liability company.
- Limited liability partnership.
- If you’ll operate under a trade name, a copy of your business certificate from your local licensing board.
- Your employer tax identification number.
- A purchase and sale agreement.
- Your lease agreement (if applicable).
- A worker's compensation insurance affidavit.
- Photographs of your business’:
- Overall property.
- If you’re a:
- Class 1 dealer, your franchise agreement(s).
- Class 2 dealer, proof of your $25,000 Surety Bond.
- Payment for your municipality’s dealer licensing fees.
Again, these are the general requirements, and may not cover everything required by your local business licensing board. Make sure you contact your city or town’s licensing agency for a complete idea of what you’ll need to provide.