How to get a dealer license in Illinois

Illinois requires a used vehicle dealer license to sell or deal in 5 or more used vehicles in a year, or to act as an agent or broker for a licensed dealer or a buyer (625 ILCS 5/5-102).

• New vehicle dealer license: Dealers who sell new vehicles.
• Buy Here, Pay Here used vehicle dealer license: Used dealers that finance sales themselves without a third-party lender.
• Motor vehicle financing affiliate license: Businesses that operate as motor vehicle financing affiliates.
• Vehicle auctioneer license: Businesses that auction vehicles for more than one owner. Licensed new and used dealers do not need it.
• Automotive parts recycler, scrap processor, repairer and rebuilder license: Businesses that recycle, scrap, repair or rebuild vehicles.
• Transporter in-transit plates: Businesses that move vehicles as transporters and need in-transit plates.
• Out-of-state salvage vehicle buyer license: Nonresident buyers of salvage vehicles at Illinois auctions.

Surety bond. A $50,000 bond or certificate of deposit is required for each location. It runs to the People of the State of Illinois, lasts through December 31 of the license year, and covers proper payment of title and registration fees and taxes (625 ILCS 5/5-102).

Insurance. You need liability insurance of at least $100,000 per person, $300,000 per crash and $50,000 for property damage, with a certificate of insurance for each location. The policy must not expire before December 31 of the license year. Trailer and mobile home dealers are exempt (625 ILCS 5/5-102).

Place of business. You need an office in a permanent building to keep your records. It cannot be in a residence, tent, temporary stand or hotel room. The site needs an outdoor lot for at least 5 vehicles, surfaced with rock or better, or an indoor showroom. You also need a permanent sign with the dealership name (lit if open after sundown), the name and business hours posted on the front door, a working phone, and electricity and lighting. You must be open at least 5 days a week for at least 4 hours in a row each day, and a lease must cover the whole license period (625 ILCS 5/5-100; 92 Ill. Adm. Code 1020.10).

Background check. Applicants authorize a criminal history investigation, and the Illinois State Police reports any convictions to the Secretary of State (625 ILCS 5/5-105). The application must also state that no owner or principal has committed a forcible felony or an offense under Articles 16, 17 or 29B of the Criminal Code within 10 years, or certain Vehicle Code or tax law violations within 3 years.

Pre-license education. Required (8 hours). Approved courses and details.

1. Complete at least 8 hours of approved prelicensing education and keep the certificate (625 ILCS 5/5-102.5).
2. Register with the Illinois Department of Revenue under the Retailers' Occupation Tax Act and get its certification.
3. Set up an established place of business with an office and a lot for at least 5 vehicles or an indoor showroom that meets 92 Ill. Adm. Code 1020.10.
4. Buy a $50,000 dealer bond or certificate of deposit for each location.
5. Get liability insurance of at least $100,000/$300,000/$50,000 and a certificate of insurance for each location.
6. File the Dealer License Application (Form VSD 324) with the Secretary of State with your certificates, bond, insurance and fees, and authorize the background check.
7. Once licensed, order dealer plates, which cost $45 for the initial set.

Official forms:

• Dealer License Application (VSD 324)
• Instructions for Dealer License (VSD 659)

No. Illinois will not license a used vehicle dealer without an established place of business, which must include an office and either an outdoor lot for at least 5 vehicles or an indoor showroom.

Dealer-only auctions sell only to licensed dealers, so you need a dealer license to buy there. Many of these auctions use AuctionACCESS (auctionaccess.com), which limits membership to licensed vehicle dealers and their authorized representatives.

Used dealer licenses expire on December 31 each year. To renew, apply again and pay the license fee, plus a Dealer Recovery Fund fee of $0 to $500 based on the prior year's automobile sales (625 ILCS 5/5-102).

This is general information, not legal advice. Rules and fees change, so confirm the details with the Illinois Secretary of State before you apply. Last verified October 20, 2026.

Planning the business side too? Read how to start a car dealership. Used cars you offer for sale need an FTC Buyers Guide in the window. Selling your own car instead? See how to sell a car in Illinois.