How to Get a Delaware Auto Dealer License: Step-by-Step Guide

Whether you’re planning to sell new, used, or wholesale vehicles, getting licensed is a crucial first step – and it all starts with the Delaware Division of Motor Vehicles (DMV).

While the core application process is similar across license types, there are a few key differences to keep in mind. Most applicants will need to register their business, purchase an auto dealer bond, and secure liability insurance, as well as meet several other important requirements.

In this guide, we’ll walk you through the entire process of acquiring a Delaware dealer license step by step, so you can get your dealership up and running in no time.

1. Determine the type of Delaware dealer license

Before you begin the application process, you should determine which type of dealer license you need based on your intended business operations.

Delaware offers several license categories, including:

• New/Franchise 
• Used 
• Wholesale 
• Mobile Home 
• Auction 
• Motorcycle/Moped 
• Trailer
• Recycler/Salvage 

While there are several differences, the core licensing requirements remain largely the same across the board.

2. Secure a permanent business location 

Choosing and preparing your dealership location is a key part of getting licensed in Delaware. You’ll need zoning approval from the local city zoning office (if located within city limits) or the county office (if located outside city limits).

To secure compliance, your dealership location must meet the following requirements:

• Dedicated sales and office space: Must include a defined area for conducting business and space to display at least five vehicles. New recreational vehicle dealers must also have an on-site service facility.
• Business telephone line: A landline phone registered under the dealership’s official business name must be installed.
• Permanent signage: A sign measuring at least 24 x 36 inches displaying the dealership’s approved name must be visible on the premises.
• Technology requirements: A computer and laser printer must be available to print on-demand temporary tags (motorcycle and wholesale dealers are exempt from the temp tag system).
• Entrance permit: If your dealership will be located on a state-maintained road, both new and used dealers are required to obtain an entrance permit from the Delaware Department of Transportation (DelDOT).

Additionally, Delaware dealers are not permitted to share a lot, office, or location with another dealer.

Meeting these location and equipment requirements is essential for passing the DMV’s site inspection later in the process. You must also provide proof of occupancy, such as a lease, rental agreement, or property deed, when submitting your application.

3. Check if your business name is available

The DMV requires that all new dealerships have unique business names. Before registering your business, you’ll need to confirm that your chosen name isn’t already used by another licensed dealer.

You can verify name availability online or by contacting the division. If the name is already taken, you’ll need to choose a different one.

Additionally, if you plan to operate under a name that differs from your officially registered business name (commonly known as a “Doing Business As” or DBA), you may be required to register that name with the local Prothonotary’s office.

4. Obtain a business license

All businesses operating in Delaware must be registered with the state. Depending on your business structure, you may need to register with both the Delaware Division of Corporations and the Division of Revenue, or just the latter.

As part of the licensing process, you’ll need to apply for an annual dealer business license through the Division of Revenue. The fee for this license is $100, and you’ll need to include a copy of your payment receipt with your auto dealer license application.

If you’re applying for a Delaware wholesale dealer license, you must also obtain an additional wholesale license, which costs $75. 

You can apply for both the wholesale license and the annual dealer business license simultaneously through the Delaware One Stop website.

Note: Your business license(s) must be kept on-site at your dealership and made available for inspection by the DMV at any time.

5. Secure liability insurance

When submitting your application, you must provide proof of liability insurance covering all motor vehicles registered to your dealership. Your policy must also cover all dealer plates issued to your business. Liability insurance is not required for trailers or vehicles to be towed.

The specific insurance requirements vary depending on your dealer license type and other factors, so it’s recommended that you contact the DMV for guidance on your exact obligations.

Note: All dealerships must submit proof of liability insurance when renewing their dealer plates. The proof of coverage must either specify the number of dealer plates insured or clearly state “All Owned Vehicles”.

6. Obtain a Delaware dealer surety bond

To obtain a Delaware car dealer license, you are required to submit a $25,000 auto dealer surety bond. This bond guarantees your compliance with Chapter 30 of the Delaware Code and serves as a financial safeguard for customers in cases of fraud, contract violations, or failure to fulfill legal obligations.

You won’t need to pay the full $25,000 upfront. Instead, you’ll pay a bond premium, which is a small percentage of the total bond amount. This surety bond cost is determined during the application process and is influenced primarily by your personal credit score and overall financial standing.

The $25,000 amount represents the maximum payout the surety company may be required to cover if a valid claim is made.

Getting bonded is a fast process, which can take as little as two business days. All you have to do is complete an online application form, and most surety companies will be able to give you a free quote instantly.

7. Conduct a criminal background check

As part of the license application process, all owners and officers of the dealership are required to undergo a criminal history background check through the State Bureau of Identification (SBI).

If a Delaware resident has lived in the state for less than two years, they must also submit a criminal history report from their previous state of residence, in addition to the Delaware report.

To complete the background check, you need to submit your fingerprints and required personal information digitally through IdentoGO. Use the service code 27RVGT. The current fee for this service is $72.

For license renewals, if more than five years have passed since your last background check, you will be required to complete the process again.

8. Schedule a business location inspection

Once you’ve completed all the previous steps, you are ready to schedule a business location inspection with your county DMV office. You can do this by contacting the office directly by phone.

During the inspection, the appointed agent will visit your dealership to verify compliance with all required physical location requirements, including signage, office setup, display space, and equipment.

It’s important to ensure your business location is fully prepared before the inspection, as failure to meet any requirement may result in delays to your license approval.

9. Complete and submit your dealer license application

After meeting all requirements and passing your business location inspection, you can apply for your Delaware dealer license by downloading and completing the MV29 Application form. Mail the completed form along with all supporting documents to:

Division of Motor Vehicles
Dover Administration Office
303 Transportation Circle
P.O. Box 698
Dover, DE 19903

The application must include the name and address of the applicant. If applying as a partnership, include each partner’s name and address. For corporations, list the principal officers, state of incorporation, and business locations.

Keep in mind that additional information may be required by the DMV depending on your business structure.

There is no separate fee for the dealer license itself. However, you must pay for the business license issued by the Division of Revenue, the criminal background check, and dealer plates at $10 per plate.

Checklist of documents needed to apply for a dealer license in Delaware

To recap, here is a detailed list of all documents you must attach to your application before you mail it to the DMV:

• Delaware business license from the Division of Revenue
• Articles of incorporation from the Division of Corporations (if applicable)
• Criminal history background check completed via IdentoGO
• Proof of dealership location (lease agreement, rental contract, or proof of property ownership)
• Zoning approval from your local city or county zoning office
• An entrance permit from the Department of Transportation (if the location is on a state-maintained road)
• Franchise agreement (required only for new vehicle dealers)
• Proof of liability insurance covering all dealer plates
• $25,000 auto dealer surety bond
• Business name registration (if operating under a DBA)
• Delaware driver’s license, issued at least 90 days before applying

Ensure all documents are complete and up to date to avoid processing delays.

What’s new for Delaware auto dealers: Key updates you need to know

• Delaware Personal Data Privacy Act (Effective January 1, 2025)

The Act grants consumers rights to access, delete, and correct their personal data, as well as to opt out of data processing for targeted advertising and sales. Businesses must implement measures to comply with these rights, This includes providing clear privacy notices and establishing processes for consumers to exercise their rights.

• Zero-Emission Vehicle (ZEV) Mandate

Delaware has introduced a mandate to increase the adoption of zero-emission vehicles. Starting with the 2027 model year, 43% of all new cars, SUVs, and light trucks delivered to Delaware dealerships must be either fully electric or plug-in hybrids. That percentage will increase to 82% for the 2032 model year.

• Extended Registration Periods for New and Used Vehicles  (Effective October 1, 2024)

New 2025 vehicles under 10,000 lbs can be registered for up to 7 years. Untitled 2019–2024 models may qualify for up to 6 years. Out-of-state used vehicles (2019–2025) under 10,000 lbs can also be registered for up to 6 years without a full inspection, but a VIN verification is required.

• New Criminal Background Check Process (Effective September 5, 2023)

The Criminal Background Check Authorization form is no longer required. All fingerprinting must now be done digitally via IdentoGO using a designated service code. For the Personal Criminal History report, the code is 27RVGT.

Frequently Asked Questions

How much does it cost to obtain a car dealer license in Delaware?

Delaware does not have a designated fee for the dealer license. However, there are some other associated costs.

• Business License Fee: $100 annually, obtained from the Division of Revenue
• Wholesale License Fee (if applicable):  $75, obtained along with the business license
• Criminal Background Check Fee: $72
• Dealer Plates: $10 per plate
• Surety Bond Cost: It’s a percentage of the $25,000 bond amount and varies based on credit score and financial history

These fees are subject to change, so be sure to check with the relevant agencies for the most up-to-date information.

When do you need to renew the dealer license in Delaware?

In Delaware, auto dealer licenses expire annually on December 31. To avoid any disruption in your business operations, renewal applications must be submitted between October 1 and December 30 each year.

Dealers are also required to renew their business license and dealer plates annually. 

In addition, before applying for renewal, you must ensure that your liability insurance coverage and surety bond are current, as these are mandatory requirements for license renewal.

How many vehicles can you sell without a dealer license?

In Delaware, individuals are permitted to sell up to four vehicles per calendar year without requiring a dealer license. However, if you intend to sell five or more vehicles within 12 months, you must get licensed by the Delaware Division of Motor Vehicles. 

Operating as a dealer without the appropriate license is considered illegal and may result in penalties.