Getting a car dealer license in Massachusetts involves a multi-step process regulated by the Massachusetts Registry of Motor Vehicles (RMV). The core requirements include establishing a proper business entity, securing a licensed location, obtaining a surety bond, and passing background checks. The entire process can take several weeks to months.
Key Steps to Obtain a Massachusetts Dealer License:
- Business Formation: First, you must establish a legal business entity (e.g., LLC, Corporation) and obtain a Federal Employer Identification Number (FEIN) from the IRS. You must also register the business with the Massachusetts Department of Revenue for sales tax purposes.
- Location Requirements: You need a permanent, enclosed building that meets local zoning approval. This location must have a dedicated office space and a display area for vehicles. A home office is generally not sufficient.
- Surety Bond: You must obtain a $25,000 surety bond from a licensed bonding company. This bond protects consumers from fraudulent activities.
- Background Check: All applicants, partners, and officers must undergo a Criminal Offender Record Information (CORI) check. A history of certain offenses may lead to application denial.
- RMV Application: Submit the complete application package (Form TTL-100) to the RMV's Dealer Licensing Division. This includes proof of the above steps, photos of your location, and the application fee.
- Dealer Plate: Upon approval, you will receive a dealer license and can purchase dealer plates, which allow you to transport and demonstrate vehicles.
The following table outlines the primary costs and requirements:
| Requirement | Specification | Key Details |
|---|
| License Type | Class 1 (New), Class 2 (Used) | Class 1 is for new car franchises; most independent dealers apply for Class 2. |
| Surety Bond | $25,000 | Must be from a surety company licensed to do business in Massachusetts. |
| Application Fee | $100 (as of 2023) | Fee is paid with the TTL-100 application form; subject to change. |
| License Duration | 1 Year | Licenses expire on December 31st of each year and must be renewed. |
| Zoning Approval | Required from Local Municipality | Must prove the location is zoned for automotive sales. |
| Business Insurance | Liability Insurance Required | Proof of general liability insurance is a standard prerequisite. |
Be prepared for an RMV inspector to visit your proposed location to verify it meets all requirements. The most common reasons for application delays are incomplete paperwork and zoning issues.
