How to Get a Vermont Dealer License in 2026

Thinking of selling cars in Vermont? To legally operate as a vehicle dealer in the state, you’ll need to obtain a license through the Vermont Department of Motor Vehicles (DMV). The DMV offers several types of dealer licenses depending on the kinds of vehicles you plan to sell.

While license types vary, the core application requirements are the same across the board. These include passing a background check, submitting a credit report, securing a surety bond, and more.

Follow our complete step-by-step guide to getting your Vermont dealer license.

1. Select Your Dealer License Type

Vermont offers several types of dealer licenses, depending on the types of vehicles or equipment you plan to sell. 

The available types are:

• All-Terrain Vehicles Dealer (ATV)
• Auction Dealer (ACD) – Vehicles sold via auction
• Farm Equipment Dealer (DLF)
• Finance Car Dealer (FCD) – Vehicles sold under financing terms
• Highway Building Equipment Dealer (DLH) – Heavy equipment used in construction
• Motorboat Dealer (MBD)
• Motorcycle/Motor-Driven Cycle Dealer (DLM)
• New Car Dealer (NCD) – Requires franchise agreement(s)
• Snowmobile Dealer (SMD)
• Trailer Dealer (DLT)
• Used Car Dealer (UCD)
• Non-Franchised Zero-Emission Vehicle Manufacturer (EV) – For manufacturers that sell directly to consumers without a franchise.

When completing your application, be sure to select all categories that match your current or planned business activity – this ensures you’re properly licensed from the start.

2. Complete Business Registration Procedures

Before applying for your Vermont dealer license, you must register your business with three state agencies:

• Vermont Secretary of State – To register your legal business entity (LLC, corporation, etc.)
• Vermont Department of Taxes – For state tax registration
• Vermont Department of Labor – If you plan to hire employees

The easiest way to complete all three registrations is through Vermont’s Online Business Service Center.

In addition to state registration, you’ll also need a Federal Employer Identification Number (FEIN). You can apply quickly and free of charge on the IRS website.

Finally, be sure to check with your local city or county office for any additional business licensing or permit requirements specific to your location.

3. Secure a Compliant Business Location

All license applicants are required to establish a dealership location that complies with several specific requirements:

• The location must be owned or leased for at least one year.
• The building must be at least 1,200 square feet (not applicable to ATV, snowmobile, and boat dealers) and used primarily for the sale of vehicles.
• The location must include a separate office area that:
  • Is heated
  • Offers reasonable accommodations for conducting business with clients
  • Provides space to store business records and display the dealer license certificate 
• A vehicle display area must be located in the immediate proximity of the main building.
• A publicly visible sign displaying the dealership’s name is required.
• The business must be open at least 146 days per calendar year, for six hours per day, with a minimum of four hours between 6 am – 6 pm (not applicable to ATV, snowmobile, and boat dealers).
• Dealers must typically sell at least 12 vehicles per year to qualify for renewal and demonstrate they are actively engaged in business.

Once you are confident that all these requirements are met, you must obtain a Zoning Compliance Certificate from your town. If no zoning regulations exist, you need a signed statement from a local government representative confirming that.

4. Purchase Automobile Liability Insurance

To obtain a Vermont car dealer license, you must provide proof of financial responsibility in the form of an automobile liability insurance policy. This coverage ensures you’re financially protected in the event of an accident involving a vehicle operated under your dealer plates.

Minimum Coverage Requirements:

• $25,000 – Bodily injury or death of one person per accident
• $50,000 – Total bodily injury or death for two or more persons per accident
• $10,000 – Property damage per accident

If you plan to hire employees, Vermont law requires you to carry Workers’ Compensation insurance to cover any work-related injuries or illnesses.

5. Obtain a Vermont Auto Dealer Bond

As part of your initial licensing requirements, all new dealer applicants must secure a Vermont auto dealer surety bond in the amount of $35,000, valid for two years.

This bond serves as a guarantee that you will operate your dealership in compliance with all applicable Vermont laws and regulations. It protects consumers and the state in the event of fraud, contract violations, or other unlawful business practices.

When renewing your vehicle dealer license, the bond amount will be adjusted based on your total vehicle sales over the previous two years:

• $20,000 – Fewer than 25 vehicles sold
• $25,000 – 25 to 100 vehicles sold
• $30,000 – 101 to 250 vehicles sold
• $35,000 – More than 250 vehicles sold

Bond premiums are typically a small percentage of the bond amount (usually 1–5%), based on your credit score and business finances.

6. Complete the Vermont Dealer License Application 

Once you’ve completed the above requirements, you’re ready to move to the motor vehicle dealer license application.

Start by filling out the Application for Dealer Registration (Form VD-008). Be sure to prepare the following supporting documents with your submission:

• Zoning Compliance Certification
• Proof of Financial Responsibility Insurance
• Vermont Auto Dealer Bond ($35,000 for new applicants)
• Lease agreement (if renting) or property deed (if you own the location)
• Tax number certificate from the Vermont Department of Taxes
• Credit report for each owner or officer
• Background Check and Authorization to Release Information for every applicant
• Franchise and Sales & Service Agreements (required for new car dealer applicants only)

Be sure to double-check all forms and attachments for accuracy to avoid delays in processing.

7. Pay Fees and Submit Your Application

Applying for a Vermont dealer license involves paying a registration fee. For new or used car dealers, the current fee is $603, which includes the issuance of three dealer plates upon approval.

For a complete list of fees by license type, refer to the Dealer License Application form or the table in the next section.

Once you’ve compiled all required documents and completed your forms, mail your full application packet to the following address:

Vermont Department of Motor Vehicles
120 State Street
Montpelier, Vermont 05603-0001

You may have to wait up to 6 weeks for your application to be reviewed and approved. 

Vermont Car Dealer License Fees Breakdown

In Vermont, each dealer license type comes with a different registration fee, a set number of initial free plates, and a fee for any additional plates issued. Dealers may choose between a one-year or two-year registration period, with the fee for two years simply doubling.

For new car/used car/trailer dealers, and non-franchised zero-emission manufacturers, up to five dealer plates may be issued at no additional cost, if authorized. The number of plates you’re eligible for depends on your anticipated vehicle sales.

Any plates beyond the fifth will incur the standard per-plate fee associated with that license category.

Additionally, if you apply for more than one dealer license type, you may be required to pay multiple registration fees, and receive separate plate sets based on the type of vehicles you sell.

Important Updates for Vermont Auto Dealers 

• Increases to Dealer Fees (Effective Jan 1, 2024)

Vermont increased several DMV fees, including dealer license costs. The registration fee for new and used car dealers rose from $503 to $603, and the additional dealer plate fee increased from $55 to $66. Other dealer categories also saw fee hikes ranging from 15% to 20%. These changes are part of a broader statewide adjustment to keep pace with inflation and support the Transportation Fund.

• Mandatory Used Vehicle Inspection Disclosure (Effective July 1, 2025)

Under Act 165, all Vermont dealerships selling used vehicles will be required to provide a Used Vehicle Inspection Disclosure Form with each sale. This form must include the date of the most recent state inspection, its expiration date, and the inspection results or status. The new requirement is designed to make the used car market more transparent and consumer-friendly.

• Electronic Recordkeeping Requirement for Titles (Effective July 1, 2024)

Act 165 also introduced a new rule requiring all dealers to maintain electronic records of title transactions for at least five years. This includes exempt, salvaged, aftermarket, and surrendered titles. The rule modernizes dealership operations and ensures better compliance and traceability of vehicle ownership records.

For a complete overview of new rules affecting auto dealers, refer to the full text of Act 165, issued by the Vermont Department of Motor Vehicles.

FAQs

Can you operate as a vehicle dealer in Vermont without a lot?

In Vermont, operating as a licensed vehicle dealer without a physical location is generally not permitted. Without a lot, you won’t be able to obtain a license in the first place.

However, if maintaining a physical dealership location isn’t feasible, you might consider applying for a Wholesale Dealer License in Vermont. This license allows you to sell vehicles exclusively to other licensed dealers and does not require a public-facing dealership location.

For detailed information and guidance tailored to your specific situation, it is advisable to contact the Vermont DMV’s Dealer Licensing Division directly.

When do I need to renew my Vermont dealer license?

The auto dealer license in Vermont is valid for either one or two years, depending on your initial registration choice. The expiration date corresponds to the issuance date. The Vermont Department of Motor Vehicles (DMV) will notify you of the pending renewal via email or phone call.

How do I renew my Vermont dealer license?

To renew your license, you need a current insurance policy and surety bond, so make sure to renew them first. Next, you have to complete the Renewal for Dealer Registration form and submit it along with all supporting documentation to the DMV by email.

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