How to Get an Indiana Dealer License: A Step-by-Step Guide

If you plan to sell 12 or more vehicles in Indiana within 12 months, state law requires you to obtain an Indiana auto dealer license through the state’s Secretary of State’s Auto Dealer Services Division. This license ensures your business operates legally and in compliance with state regulations.

1. Choose the Right License Type

Before starting the application process, it’s important to identify the specific type of dealer license that fits your business model. Your license type will determine the specific requirements you’ll need to meet:

• Dealer (New or Used): For selling new or used vehicles such as cars, trailers, snowmobiles, and RVs.
• Manufacturer: For companies that build or assemble vehicles or major components.
• Transfer Dealer: For financial institutions or insurance companies handling repossessions or salvage (not for towing or transport-only).
• Auto Auction Dealer: Required for hosting or facilitating vehicle auctions.
• Manufactured Home Dealer: For selling mobile or modular homes.
• Watercraft Dealer: For selling watercraft or related trailers.

If you’re pursuing a different type of vehicle-related business, you may need a more specialized license. For a full list of available licenses or if you need more specific information for your case, visit the License Applications on the Indiana Secretary of State’s Dealer Division website or contact them directly at [email protected]. 

2. Secure a Compliant Business Location

Before applying for a car dealer license in Indiana, you must establish a permanent business location that meets the requirements set by the Auto Dealer Services Division.

Your business location cannot be a residence, temporary setup, or shared with another licensed dealer. Moreover, it must be accessible to the public, capable of receiving mail, and open at least 30 hours a week during regular business hours.

The dealership must have at least 1,300 square feet, which includes a minimum of 100 square feet for a dedicated office area. The office must be properly furnished, functional, and equipped with the necessary utilities.

Similarly, the lot must also provide enough space to display at least 10 vehicles and include designated parking for customers. The property must be well-lit during operating hours and should have a visible, permanent sign displaying your business name (as it appears on your license). Keep in mind that your dealership cannot operate within a retail complex and must not share space with any secondary business.

3. Register Your Business

Before you can apply for an auto dealer license, your dealership must be officially registered with the Indiana Department of Revenue. 

Start by obtaining an Employer Identification Number (EIN) from the IRS. This number is required for tax purposes and business registration. The application is free, only takes a few minutes, and can be completed online. Be sure to print and save your EIN confirmation letter for your records.

Next, go to the INBiz website, the official portal for Indiana business services, and complete the Business Tax Application (Form BT-1). For a smooth registration process, refer to the Business Tax Application Checklist provided by the Indiana Department of Revenue. It outlines all the information you’ll need to have on hand to complete your registration.

4. Obtain Liability Insurance

Before you can receive your Indiana auto dealer license, you must secure liability insurance for your dealership. This insurance protects your business against claims involving bodily injury, property damage, or other incidents related to your operations.

There are several types of insurance coverages available to auto dealers, and the right policy for you will depend on your specific business activities.

At a minimum, Indiana law requires that your policy meet the following coverage limits:

• $100,000 bodily injury coverage per person
• $300,000 bodily injury coverage per accident
• $50,000 property damage coverage per accident

Most dealers opt for garage liability insurance, as it is designed specifically for auto-related businesses. You may also consider general liability insurance depending on your operations.

5. Get a Surety Bond

As part of your Indiana auto dealer license application, you’re required to obtain a $25,000 surety bond. This bond protects consumers from any fraudulent activities, errors, or unethical practices.

If a customer files a claim, the surety company, not your business, will pay the claim up to the bond amount. You are responsible for reimbursing the surety at a later date.

The cost of your bond typically ranges from 1% to 3% of $25,000. It depends on factors like:

• Your personal credit score
• Business and industry experience
• Financial history

Getting an Indiana auto dealer bond is a simple process. Once approved, you will only need to review the bond terms, sign it, and submit the document along with your license application. 

Keep in mind that your license becomes invalid if your bond expires. To stay compliant, make sure to renew your bond on time and submit the updated documentation to the state.

6. Complete Pre-licensing Training

First-time motor vehicle dealers are required to complete a training course before obtaining a license. This training is offered by the Indiana Independent Automobile Dealers Association (IIADA). It covers key topics such as dealership management, legal responsibilities, and compliance with Indiana state laws. 

After successfully finishing the course, you will receive a Dealer Training Completion Certificate, which must be included with your license application.

Only new applicants (not renewals) are required to complete this training.

7. Complete a Background Check

As part of the licensing process, all Indiana auto dealer applicants must undergo a national criminal background check. The process begins online, where you’ll schedule an appointment through the IdentoGO Enrollment Center. On the day of your appointment, you’ll visit the center to complete fingerprinting and finalize the check.

Keep in mind that it can take up to 30 days to receive your results. At the same time, your background check must be completed no more than 60 days before submitting your license application. Applications with background check results older than 60 days will be rejected.

8. Prepare All Required Documents

When completing your Indiana dealer license application, you’ll need to submit a combination of personal and business documents. Gathering these in advance will help prevent delays or rejections.

Here’s what you’ll need to include:

• Background check results – Must be completed via IdentoGO and dated within the last 60 days
• Proof of business registration – Downloadable from INBiz after registering your entity
• Certificate of liability insurance – Must meet Indiana’s minimum coverage limits ($100k/$300k/$50k)
• Signed $25,000 surety bond (Form SF 53966) – Required for all dealer applicants
• Dealer Training Completion Certificate – Required for first-time applicants only
• Valid photo ID – For all owners or officers listed on the application
• Registered Retail Merchant Certificate – Issued after submitting Form BT-1 through INBiz for sales tax registration
• Zoning Affidavit (Form SF 55936) – Must be signed by your local zoning authority and dated within the last 90 days
• NMEDA Accreditation – Required only if applying as a Mobility Dealer (selling or converting vehicles for individuals with disabilities)

9. Submit Your Online License Application

Once you’ve completed all the previous steps and gathered the necessary documentation, you’re ready to submit your license application. You can do that through the Dealer Portal of the Indiana State Government.

To log in, use the same credentials you use for INBiz. From there, follow the instructions, upload all documents, and review your application carefully before submitting. At the end of the process, you’ll be prompted to pay the $30 license fee. You can pay online using a credit/debit card or e-check, or choose to mail a check by post.

Recent Updates for Indiana Auto Dealers

• Online-Only Bond & Insurance Updates (Effective October 1, 2024)

Since October 1, 2024, the Division now only accepts insurance and bond renewals or updates through the Dealer Portal as part of ongoing modernization efforts. Email submissions are no longer accepted.

• Selling Rebuilt or Salvage-Branded Vehicles (Effective July 1, 2024)

Dealers must use a Division-prescribed disclosure form when selling vehicles with rebuilt or salvage branding. This is the required form.

• Dealer Stop-Sale Reimbursement (Effective July 1, 2024)

Franchise dealers subject to a stop-sale directive on a new motor vehicle are entitled to monthly reimbursement from the manufacturer at a rate of 1% of the invoiced vehicle price.

• Increase in convenience fees (Effective July 1, 2024)

The Bureau of Motor Vehicles Commission (BMVC) has approved an increase to convenience fees for participants in BMV’s partner program. The new maximum permitted convenience fee is 150% of the applicable BMV fee.

Frequently Asked Questions

How many cars can you sell in a year in Indiana without a license?

You need an auto dealer license to sell 12 or more new or used vehicles within a 12-month period. For anything fewer than that, you can sell without a license. This applies to semitrailers, trailers, off-road vehicles, snowmobiles, mini-trucks, and recreational vehicles.

However, if you deal in manufactured homes, such as modular or mobile houses, you’ll need a license if you sell three or more within a 12-month period. In the case of auto auctions, a license is required if you facilitate the auction of more than three motor vehicles or watercraft within 12 months.

How much does it cost to get an Indiana dealer license?

The base cost to get an Indiana dealer license starts at $30 for the license fee. You’ll also need to purchase dealer plates – the first plate costs $35, and each additional plate is $20. If you get two plates, your total would be $85.

However, the overall cost is higher once you include additional required expenses such as:

• $25,000 surety bond (typically $250–$750 annually, depending on credit)
• Liability insurance (cost varies)
• Pre-licensing training course (approx. $300–$400)
• Background check and fingerprinting (approx. $40–$50)
• Business registration fees with INBiz

Total startup costs often range from $700 to $1,200 or more, depending on your setup.

When do you need to renew an Indiana dealer license?

Dealer licenses and plates expire annually and must be renewed on time to remain in compliance. You can submit your renewal online up to three months before the expiration date, which is listed on your license certificate.

Can you get an Indiana auto dealer license without a lot?

If you want to sell vehicles without owning or renting a physical lot in Indiana, you can do that as a wholesale dealer, which allows sales only to other licensed dealers. This option eliminates the need for location requirements like customer parking or display areas. However, you’re still required to maintain a dedicated office space.

Do I need to renew my bond along with my license?

Whether you’re applying for a new license or renewing an existing one, you are required to have an active surety bond in place. Most bonds are issued on an annual basis, but some may have specific expiration dates. Make sure to monitor your bond’s expiration date, renew it on time, and submit the updated bond to the state to remain in compliance.