How to Get a Connecticut Auto Dealer License

Thinking about launching a car dealership in Connecticut? In order to conduct your operations legally in the state, you will need to obtain a CT dealer license.

The licensing process, as in other states, is rigorous and aims to ensure that applicants have the necessary qualifications and skills and are thus suitable for the job of a car dealer. When you apply for a license, you will have to meet a range of requirements. Among them is posting a Connecticut auto dealer bond.

Find out the basic steps that you have to undertake so you can kickstart your dealership journey in Connecticut.

The licensing options

Auto dealers in Connecticut have to apply for a license with the state Department of Motor Vehicles.

You can obtain the following license types, depending on the activities that you intend to conduct:

• New car dealer
• Used car dealer
• General repairer
• Limited repairer

There are some differentiations between the criteria you have to satisfy to obtain the specific license types.

The CT dealer license requirements

Once you’ve selected the license type that you want to apply for, you have to get familiar with the exact requirements that the DMV has imposed.

The most important ones include:

• Completed application form
• Provide full information about your business entity, such as address, business name, type of ownership, and personal information about owners, partners, principal officers
• Certificate of Approval for Proposed Location from the city or town
• Signature on your application from a Fire Marshall and Building Official
• Completed Business License Personnel List (K-26)
• Site drawings in accordance with the License Application Drawing Specifications (K-93).
• Marker plates request
• Completed State of Connecticut Department of Energy & Environmental Protection (DEEP) Referral sheet
• Sales tax permit
• Insurance certificate
• License Inspection Application – make sure you meet the respective requirements for your license type
• For each license type, there is a list of signs and additional documents that you have to supply
• For new car dealers: Franchise Appointment Certificate and Dealer Agreement and Standard Provision
• Surety bond

In addition, you have to pay a $140 application fee prior to the approval of your application. After receiving approval, you have to cover the additional remaining fees, which are the following:

• New car dealer – $700
• Used car dealer – $560
• General or Limited Repairer – $340
• Dealer or Repairer Plate – $140 per plate
• Safety Plate Fee – $5 per plate

You can find the full information in the Procedure for Obtaining a Connecticut Dealer License document.

Getting your dealer bond

Among the basic requirements that you have to fulfill for your CT dealer license is obtaining an auto dealer bond. This surety bond serves as an extra layer of protection that guarantees your compliance with state law.

The required bond amounts are $50,000 for new and used car dealer licenses and $5,000 for general and limited repair licenses. In order to get bonded, you have to pay a small percentage called the bond premium. It is typically between 1% and 3% of the bond amount in case your finances are stable. This means you may end up paying only $500 for a $50,000 bond.

The bond price is determined on the basis of careful consideration of your personal and business finances. The most important factor is your credit score, but company financials and any assets or liquidity you may have also influence the cost. In general, the more solid your financial situation is, the smaller your bond price is likely to get.

Do you have further questions about the licensing and bonding process for auto dealers in Connecticut? Don’t hesitate to get in touch with us at 866.450.3412.