How to Get Your Illinois Dealer License in 2026

Obtaining an auto dealer license is crucial for individuals and businesses looking to sell vehicles in Illinois. The state requires a valid dealer license to ensure compliance with consumer protection laws and regulations. Whether you’re a new or used car dealer, a wholesale dealer, or a salvage dealer, understanding the licensing process is essential to operating a successful and legitimate business.

The Illinois Vehicle Service Department and the Secretary of State’s office play significant roles in regulating the automotive industry. They ensure that all dealers adhere to state laws and maintain high standards of operation.

1. Determine Your License Type

Various types of dealer licenses are available in Illinois, each tailored to different business models. For instance, you can obtain a franchise dealer license for selling new cars, a used-only dealer license for selling pre-owned vehicles, or a motorcycle dealer license if you specialize in two-wheelers. Familiarizing yourself with these options and the specific requirements for each will help you navigate the licensing process more effectively.

The available Illinois auto dealer license types are:

• Franchise dealer license – For selling new cars
• New and used car license – For selling both new and used motor vehicles
• Used-only dealer license – For selling only used cars
• Motorcycle/Motorized Pedalcycle dealer license – For selling only motorcycles or motorized pedalcycles
• Mobile homes and trailer dealer license – For selling trailers and mobile homes

Note: Illinois does not issue separate wholesale, auction, or salvage licenses. Dealers who sell only to other dealers use a standard Illinois dealer license. This is confirmed on the official Secretary of State dealer page.

2. Register Your Business

Before applying for a license, you must legally register your business with the Illinois Department of Revenue. You’ll need:

• A registration statement showing approval from the Department of Revenue
• A list of company directors, officers, and any shareholders with 10% or more ownership
• Proof that your business is in good standing with the Department of Business Services

This step ensures your business is legally recognized in Illinois.

3. Establish a Location

Before starting the application process, you must have an established place of business where you keep all the vehicles and records. Your business location must meet the following requirements:

• Have a permanent office where you store all your records and books
• Have working and safe electrical connections
• Have a working telephone or landline whose phone number is registered under your business name and included in the local area’s directory
• Have a public display of your dealership’s name on the building or front door
• Have a permanent sign indicating the business’s name and visible from the nearest public road
• Have a display lot with a section for new and used cars (where applicable)
• If you plan to sell recreational vehicles, ensure your display lot meets the specific zoning requirements for RVs
• Have a public display of operating hours, which should be at least four consecutive hours for five days weekly
• Meet the local zoning requirements
• If the property is leased, the lease must not expire before the end of the license term for which you are applying

4. Get Insured

Liability insurance is a must to become a licensed dealer in Illinois. Your insurance must have minimum coverage limits of:

• $100,000 for bodily injury or death of one person
• $300,000 for bodily injury or death of two people in one accident
• $50,000 for property damage

This requirement does not apply to dealers selling mobile homes and trailers. Your insurance must not expire before December 31 of the year in which your license was issued, or must be listed as “continuous until cancelled.”

5. Complete the Dealer Training Course

First-time applicants for a used car dealer license must complete an 8-hour training course provided by the Illinois Secretary of State. The course covers:

• Tax obligations
• Consumer protection rules
• Licensing procedures

Register through the Office of the Illinois Secretary of State or by calling (217) 785-2050. Bring your confirmation number and ID to the class.

6. Pass a Criminal Background Check

You must undergo a criminal background check by a state police-approved vendor in Illinois. To pass the background check, you must not have any forcible felony charges within 10 years of applying for your auto dealer license.

7. Get a $50,000 Surety Bond

Every Illinois dealership location must be backed by a $50,000 auto dealer bond. This bond:

• Protects customers from fraud and noncompliance
• Guarantees you’ll follow state laws, outlined in the Illinois Administrative Code and Illinois Vehicle Code
• Is required as part of the application and must be filed in both your business name and the Secretary of State’s name
• Must remain on file with the Secretary of State for the first 60 consecutive months your dealership operates, as long as you have not been delinquent in transmitting titles and registrations

The surety bond cost that you will actually pay, called a bond premium, typically ranges from 1% to 3% of the bond amount, depending on your credit score and financials. The higher your credit score, the lower the premiums.

8. Pass an Inspection

The Illinois Secretary of State’s office will contact you to conduct a physical inspection of your business premises. This ensures that it meets all the state’s office requirements, and failing to do so can lead to suspension or revocation of the license.

9. Compile the Necessary Documents

First, you must access and complete the Illinois vehicle dealer license application. You will compile the following documents to send alongside the application:

• Approval statement from the Illinois Department of Revenue to prove business registration
• Original $50,000 surety bond form or certificate of deposit in the Secretary of State’s name and the business name (original physical document — no copies accepted)
• A receipt verifying your criminal background check from an Illinois State Police-approved vendor
• A filled-out notice of proper zoning form — if the dealership is located in the City of Chicago, a copy of your city business license is acceptable in place of the zoning form
• Proof of good standing
• Hazardous Waste Generator Number if you want to run a repair shop
• A copy of the manufacturer’s franchise agreement if you are selling new cars
• An insurance certificate with your business name and expiry date
• Copy of your lease (lease cannot expire before the license term) or proof of property ownership
• Receipt showing completion of the Secretary of State training program

10. Submit Your Application and Pay Fees

Once you have filled out your application form and compiled all the necessary documents, submit them by mail together with your application. License fees depend on when you apply:

Mail your completed application, documents, and payment to one of the following addresses:

Springfield Office

Illinois Secretary of State

Dealer/Remitter Licensing Section

501 South Second St., Rm. 069

Springfield, IL 62756-7000

Chicago Office

Illinois Secretary of State

Vehicle Services Department

17 N. State St., Rm. 1100

Chicago, IL 60602

After submitting all the documents and payments, your application will be under review, and you will receive your license after two to four weeks.

Illinois Dealer License Renewal

All licenses expire on December 31 each year, regardless of when they were issued. The Secretary of State sends renewal notices to dealers in September. You can renew online or by mail to the Springfield address above.

Key renewal requirements:

• Your renewal application must be notarized
• Your liability insurance must either expire on December 31 of the renewal year or be listed as “continuous until cancelled” on the certificate
• Your $50,000 bond must be renewed and remain continuously on file
• Submit before December 31 to receive your renewed Certificate of Authority and dealer plates by January 1

Renewal fees:

Frequently Asked Questions

Can I Get a Dealer License Without a Car Lot in Illinois?

Yes – for wholesale dealers only. You still need an office space that meets Illinois requirements, but you won’t need a retail display lot if you only sell to other licensed dealers.

What Are the Benefits of Getting Licensed?

An Illinois dealer license gives you access to dealer-only auctions, allowing you to buy vehicles at wholesale prices and stay competitive. It also boosts your credibility with customers by showing you’re a legitimate, state-approved business. Beyond that, licensure connects you with industry resources and updates from the Illinois Secretary of State, helping you stay compliant and informed.

Who Needs an Illinois Dealer License?

The Illinois Vehicle Code 625 ILCS 5/5-102 states that you must be a licensed dealer if you sell over five vehicles annually.

Do I Need to Be an Illinois Resident to Get a Dealer’s License?

No, Illinois residency is not required. However, non-residents must maintain a compliant business location within the state and appoint an Illinois resident agent to handle legal matters. All standard licensing requirements still apply, including insurance, bonding, and inspections.

Can I Get a Temporary Registration for Plates in Illinois?

Yes, Illinois offers a Temporary Registration Permit (TRP), which allows you to operate a newly purchased vehicle while your permanent registration is being processed. The TRP is valid for 90 days and can be obtained through licensed dealers, Secretary of State facilities, or authorized agents. You’ll need to submit an application, pay the required fees, and provide proof of ownership and insurance.

Does Illinois Issue a Wholesale Dealer License?

No. The Illinois Secretary of State does not issue wholesale, auction, or broker licenses. Dealers who sell only to other licensed dealers must still obtain a standard Illinois dealer license and meet the same location, bond, and insurance requirements as other dealers. This is confirmed on the official Secretary of State dealer page.

How Long Does It Take to Get an Illinois Dealer License?

After submitting all required documents and payment, the Secretary of State’s office typically takes two to four weeks to review the application and conduct the location inspection before issuing the license.