How to Get a Dealer License in Alabama
In Alabama, dealer licensing runs through the Alabama Department of Revenue (ADOR) — Motor Vehicle Division, Dealer License section. To get a used car dealer license in Alabama you'll need a registered business, a compliant location, a $50,000 surety bond, and the fees below. Whether you're opening a car lot, going wholesale-only, or starting a buy-here-pay-here operation, this guide walks the Alabama auto dealer license requirements, real costs, and the exact steps — in plain English. Rules change, so verify everything against the Alabama Department of Revenue (ADOR) — Motor Vehicle Division, Dealer License section's current pages before you file.
- Surety bond
- $50,000
- License term
- One-year term running Oct 1 – Sept 30; expires every Sept 30. Renewal opens ~Sept 1 with an Oct 31 deadline, filed online through the MVTRIP dealer portal. Late renewals incur a 15% penalty plus interest.
- Sales threshold
- Alabama defines a dealer by being 'engaged in the business' of buying/selling vehicles under §40-12-391 rather than by an ADOR-published numeric threshold — anyone regularly selling vehicles for profit needs a license. Verify the current statute before relying on any specific per-year number.
- Pre-licensing
- None. Alabama does not require a pre-licensing education course or exam for a Master Dealer License.
License types in Alabama
| License type | What it covers |
|---|---|
| Master Dealer License | The single regulatory license (since HB393, Oct 1 2020) covering all new and used dealers, wholesalers, rebuilders/reconditioners, and motorcycle/trailer dealers. New vs. used is a designation under this one license. |
| Additional Place of Business | A $5 add-on license for each extra fixed location operated under the same dealer. |
| Off-Site Sales License | Temporary $25 authorization to sell at a location other than the licensed premises (tent/expo sale); must be purchased at least 10 days before the sale. |
What it costs
| Item | Cost | Notes |
|---|---|---|
| Master Dealer License fee | $125 | Set as the rounded average of bordering states' fees; reviewed every 5 years |
| Surety bond (face amount) | $50,000 | Coverage amount, not the cash cost; the annual premium you pay is a fraction of this, based on credit |
| Dealer license plates | $25 each ($17 motorcycle) | Non-refundable and non-proratable; used-dealer plate counts are capped |
| Additional location / off-site sales / local privilege license | $5 / $25 / varies | County or municipal business (privilege) license is also required after the state license is issued |
Step by step
- Secure a qualifying established place of business meeting the 810-5-12-.01 premises, zoning, and sign rules.
- Obtain the $50,000 surety bond and the required liability insurance coverage.
- Register in the Alabama Partner Registration portal within MyDMV and start the Master Dealer License application (the system generates the bond/insurance form to complete and upload).
- Submit the application, pay the $125 fee (plus $5 per additional location), and upload the documents on the transmittal sheet.
- ADOR reviews and issues the license; order dealer plates (used-dealer plate limits apply).
- Obtain the county/municipal privilege (business) license locally and register as a designated agent to title and issue temp tags.
Premises & temp tags
Location: You need an established, permanent Alabama place of business (Admin. Code r. 810-5-12-.01): a designated display area, business-zoned property, posted operating hours, and a permanent sign identifying it as a motor vehicle dealer with letters at least 6 inches high, legible from the street or 50 yards. A 'permanent location' explicitly excludes shared/common space, hourly or daily rentals, cubicles, virtual/rotating offices, and more than one dealer under the same roof.
Temp tags / plates: Dealers act as ADOR 'designated agents' and issue temporary license tags valid 20 days from issuance (extendable up to 60 days total), at $2.25 per tag. Issuing dealers must post a temp-tag bond (Form MVT 4-3) and keep issuance records for one year (§32-6-210 et seq.; Admin. Code r. 810-5-1-.228).
Alabama-specific things to know
- Dealer-plate caps differ by type — new dealers get up to 35 combined plates, but used dealers are capped very low (ADOR's own pages list conflicting base figures of 5 vs 10), with 25 extra available at 300+ annual title transfers. Confirm the current used-dealer number with ADOR.
- 'One dealer under one roof': two dealers cannot share the same building or location — a real gotcha for co-located startups.
- The bond and insurance forms cannot be downloaded in advance; they are generated inside the MyDMV application, so start the online application before finalizing the bond.
- The single Master Dealer License replaced the old separate rebuilder/reconditioner/wholesaler licenses (HB393, Oct 1 2020) — older guides referencing those are outdated.
Official Alabama resources
- ADOR — Dealer License & Plate Requirements ↗
- ADOR — Dealer License FAQ ↗
- ADOR — Forms (filter Motor Vehicle) ↗
Alabama dealer license FAQ
How much does a dealer license cost in Alabama?+
Master Dealer License fee: $125; Surety bond (face amount): $50,000; Dealer license plates: $25 each ($17 motorcycle); Additional location / off-site sales / local privilege license: $5 / $25 / varies. Plus the $50,000 surety bond (you pay a small annual premium on that, not the full amount).
How big is the dealer bond in Alabama?+
Alabama requires a $50,000 surety bond. Continuous surety bond required of all licensees; increased from $25,000 effective Sept 1, 2020. It also satisfies the 'designated agent' bonding requirement under §40-12-398. The bond/insurance form is generated inside the MyDMV application — ADOR does not publish it as a standalone download, so you must start the online application first.
Do you need a physical lot to get a dealer license in Alabama?+
You need an established, permanent Alabama place of business (Admin. Code r. 810-5-12-.01): a designated display area, business-zoned property, posted operating hours, and a permanent sign identifying it as a motor vehicle dealer with letters at least 6 inches high, legible from the street or 50 yards. A 'permanent location' explicitly excludes shared/common space, hourly or daily rentals, cubicles, virtual/rotating offices, and more than one dealer under the same roof.
How many cars can you sell in Alabama without a dealer license?+
Alabama defines a dealer by being 'engaged in the business' of buying/selling vehicles under §40-12-391 rather than by an ADOR-published numeric threshold — anyone regularly selling vehicles for profit needs a license. Verify the current statute before relying on any specific per-year number.
How long is a Alabama dealer license valid?+
One-year term running Oct 1 – Sept 30; expires every Sept 30. Renewal opens ~Sept 1 with an Oct 31 deadline, filed online through the MVTRIP dealer portal. Late renewals incur a 15% penalty plus interest.
Is dealer training or an exam required in Alabama?+
None. Alabama does not require a pre-licensing education course or exam for a Master Dealer License.
How do temporary tags work for Alabama dealers?+
Dealers act as ADOR 'designated agents' and issue temporary license tags valid 20 days from issuance (extendable up to 60 days total), at $2.25 per tag. Issuing dealers must post a temp-tag bond (Form MVT 4-3) and keep issuance records for one year (§32-6-210 et seq.; Admin. Code r. 810-5-1-.228).
Data verified 2026-07-17. Requirements change — confirm with the Alabama Department of Revenue (ADOR) — Motor Vehicle Division, Dealer License section before filing.
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