If you're interested in the automotive industry and want to start your own car dealership in Illinois, obtaining a dealer's license is essential. While the process may appear complex, this step-by-step guide will walk you through the necessary procedures and requirements to help you obtain a dealer's license in the state of Illinois.
Illinois offers different types of dealer licenses, including new vehicle dealer, used vehicle dealer, wholesale vehicle dealer, and vehicle auction dealer. It's important to identify the license type that aligns with your business model before proceeding further. These are the intended purposes of Illinois’ licensing categories:
To qualify for a dealer's license in Illinois, you must fulfill the following general requirements:
Ensure your business location complies with Illinois regulations. The premises must have a designated office space and display area, fulfill zoning requirements, and possess the necessary facilities for storing and maintaining vehicles.
Illinois mandates that all prospective dealers complete a pre-licensing education course. Completion of the course demonstrates your understanding of the industry and your commitment to operating within legal and ethical boundaries. The course is eight hours long and is provided by the Illinois Secretary of State’s office.
To protect consumers, Illinois requires all dealers to obtain a surety bond. The bond amount varies depending on the type of license and the number of vehicles sold annually. Currently, the bond requirement is $50,000. Work with a reputable bonding agency to obtain the necessary bond.
In order to become a licensed dealer in Illinois, liability insurance is an absolute requirement. Your insurance policy must meet the minimum amounts of coverage: $100,000 for bodily injury, $300,000 for each accident, $50,000 for property damage. The insurance must not expire before Dec. 31.
Gather the required documents for your license application and pay the required fees, including:
These are the fees associated with the process:
Your application, required documents, and fees must be mailed to the Illinois Vehicle Service Department at the following address:
Secretary of State
Vehicle Services Department
Dealer Licensing Section
501 S. Second St., Rm. 069
Springfield, IL 62756
As part of the application process, you and any key personnel associated with the dealership will undergo a criminal background check. Ensure all individuals have clean records to avoid any delays or denials. Additionally, the Secretary of State's office will conduct inspections to verify that your business location meets the necessary requirements.
It's critical to adhere to the state of Illinois’ regulations and provide accurate information throughout the process. By following this step-by-step guide and working closely with the Illinois Vehicle Service Department, you'll be well-prepared to obtain your dealer's license and launch your dealership, complying with the legal framework in the state of Illinois.
This is not intended as legal advice. If you have questions about dealer licensing requirements, please seek the assistance of legal counsel.
ACV Auctions can help you source inventory in Illinois when you become a dealer. Spanning from Chicago to Springfield and every place in between, we have inventory from all over Illinois. What's better if you need specific inventory you can’t find in Illinois, you can always broaden your search filters to find inventory nationwide.
After obtaining your Illinois Dealer License, sign up with ACV. Enjoy the benefits of a low buy fees, and leverage our transparent vehicle condition reports that empower dealers to bid on inventory with confidence.
