How to Get a Dealer License in Illinois
In Illinois, dealer licensing runs through the Illinois Secretary of State — Vehicle Services Department (Dealer/Remitter Licensing). To get a used car dealer license in Illinois 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 Illinois auto dealer license requirements, real costs, and the exact steps — in plain English. Rules change, so verify everything against the Illinois Secretary of State — Vehicle Services Department (Dealer/Remitter Licensing)'s current pages before you file.
- Surety bond
- $50,000
- License term
- Dealer licenses run on the calendar year and expire December 31; renew annually with the Secretary of State. Applying after June 15 halves the first-year license fee and Recovery Fund Fee, but the license still expires that December 31. The surety bond must not expire before December 31 of the license year.
- Sales threshold
- Selling 5 or more used vehicles in a 12-month period — or acting as a broker/intermediary — requires a used vehicle dealer license (625 ILCS 5/5-102). Limited exceptions exist for certain house trailers and rebuilt-salvage vehicles sold to other licensees.
- Pre-licensing
- Yes. At least one owner, corporate officer, director, member or partner must complete a minimum 8-hour Secretary of State-approved prelicensing education course BEFORE submitting the application (625 ILCS 5/5-102.5). It applies to used and Buy Here, Pay Here dealers; new-vehicle dealers are exempt.
License types in Illinois
| License type | What it covers |
|---|---|
| Used Vehicle Dealer | Retail and/or wholesale sales of used vehicles (625 ILCS 5/5-102). A used dealer may also sell at wholesale and through dealer auctions — Illinois has no separate stand-alone 'wholesale dealer' license. |
| New Vehicle Dealer | Franchised sales of new vehicles (625 ILCS 5/5-101); a new-vehicle dealer may also sell used inventory and is exempt from the used-dealer prelicensing course. |
| Buy Here, Pay Here Used Vehicle Dealer | Used dealer that finances the sale in-house without a third-party lender (625 ILCS 5/5-102.8) — same $50,000 bond and 8-hour prelicensing course as a used dealer. |
| Motor Vehicle Financing Affiliate | Affiliate license for a business that finances vehicle sales for a licensed dealer (625 ILCS 5/5-101.1). |
What it costs
| Item | Cost | Notes |
|---|---|---|
| Used vehicle dealer license fee | $1,000 | For the established place of business, plus $50 per additional location. Halved to $500 (+$25 each additional) if you apply after June 15 — but the license still expires December 31. New-dealer additional-location fees run higher ($100–$250 each). |
| Annual Dealer Recovery Fund Fee | $500 | Initial year, +$50 per additional location (625 ILCS 5/5-102.7). At renewal it is volume-based on the prior year: $0 if 25 or fewer sold, $150 for 26–199, $300 for 200–299, and $500 for 300+. |
| Surety bond (face amount) | $50,000 | Per licensed location. The annual premium you actually pay is a fraction of the face value, based on credit; a certificate of deposit may substitute. |
| Dealer 'in-transit' plates | $45 per set | Initial set; $13 per duplicate (625 ILCS 5/3-810). The number of sets is capped by prior-year sales volume (3-602 formula); new dealers get at most 8 sets, and extra sets above your allotment are billed at the $148 passenger-registration rate (3-806). |
| Off-site sale / display exhibition permit | $25 / $10 | Per 625 ILCS 5/5-102.1 — $25 for an off-site sale, $10 for a display exhibition or trade show, per event. |
Step by step
- Form your business entity, register any assumed/DBA name, and obtain an Illinois Business Tax (IBT) number from the Department of Revenue so you can file ST-556 sales tax on each sale.
- Secure a permanent established place of business that meets SOS premises rules (office, display area, permanent sign, posted hours) and passes local zoning.
- Complete the required 8-hour SOS-approved used-vehicle dealer prelicensing education course (at least one owner/officer).
- Obtain the $50,000 surety bond (or certificate of deposit) and garage liability insurance for the location.
- Submit the used vehicle dealer license application to SOS Vehicle Services (Dealer/Remitter Licensing) with the license fee ($1,000, or $500 after June 15), the $500 Annual Dealer Recovery Fund Fee, proof of bond and insurance, and required site photos.
- Pass the Secretary of State site investigation (625 ILCS 5/5-105).
- Receive your license and general distinguishing number; order dealer 'in-transit' plates and set up ERT for titles, registration and Temporary Registration Permits.
Premises & temp tags
Location: Illinois requires a permanent 'established place of business' — a building you own or lease, used to sell, buy and display vehicles, with an office where books and records are kept, a display/lot area, a permanent sign identifying the dealership, and posted regular business hours. The Secretary of State investigates the site (625 ILCS 5/5-105) before issuing. Home-based or temporary locations generally do not qualify; off-site sales and display exhibitions each require a separate permit.
Temp tags / plates: Dealers move unregistered inventory on dealer 'in-transit' plates ($45/set) and issue the buyer a Temporary Registration Permit (TRP) at the point of sale. Titles, registration and TRPs are processed through the Secretary of State's Electronic Registration and Title (ERT) system, and the SOS has been moving TRP issuance to electronic processing — confirm the current TRP procedure and any electronic temporary-plate rollout with Vehicle Services.
Illinois-specific things to know
- Calendar-year licensing with a June 15 fee cliff: apply after June 15 and the license fee and Recovery Fund Fee are halved, but the license still expires December 31 — late-year applicants effectively pay for a short first term.
- Two separate financial obligations, not one: a $50,000 surety bond per location AND the Dealer Recovery Trust Fund (Annual Dealer Recovery Fund Fee — $500 to start, then volume-based at renewal). Long-tenured, continuously compliant dealers may qualify for a bond exemption under 5-107.
- Mandatory 8-hour prelicensing education for used and Buy Here, Pay Here dealers (new-vehicle dealers are exempt) — at least one owner/principal must finish an SOS-approved course before you can even apply.
- Dealer plate counts are capped by prior-year sales volume (3-602 formula); new dealers get at most 8 sets at each fee tier, and any plates above your base allotment cost the full $148 passenger-registration rate rather than the $45 in-transit rate.
Official Illinois resources
- Illinois SOS — Dealer Licensing ↗
- Illinois Vehicle Code, Chapter 5 — Dealers (625 ILCS 5) ↗
- Illinois Department of Revenue — vehicle taxes (ST-556 / RUT-25) ↗
Illinois dealer license FAQ
How much does a dealer license cost in Illinois?+
Used vehicle dealer license fee: $1,000; Annual Dealer Recovery Fund Fee: $500; Surety bond (face amount): $50,000; Dealer 'in-transit' plates: $45 per set; Off-site sale / display exhibition permit: $25 / $10. 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 Illinois?+
Illinois requires a $50,000 surety bond. A surety bond or certificate of deposit of $50,000 is required for EACH licensed location, for both used and new vehicle dealers (625 ILCS 5/5-101, 5-102). This reflects a legislative increase over Illinois's older, lower dealer-bond figure; the statute now sets $50,000. It runs to the People of the State of Illinois and must not expire before December 31 of the license year. Long-tenured dealers who have been continuously licensed/compliant may qualify for a bond exemption under 625 ILCS 5/5-107. Separately, dealers pay into the Dealer Recovery Trust Fund (see costs).
Do you need a physical lot to get a dealer license in Illinois?+
Illinois requires a permanent 'established place of business' — a building you own or lease, used to sell, buy and display vehicles, with an office where books and records are kept, a display/lot area, a permanent sign identifying the dealership, and posted regular business hours. The Secretary of State investigates the site (625 ILCS 5/5-105) before issuing. Home-based or temporary locations generally do not qualify; off-site sales and display exhibitions each require a separate permit.
How many cars can you sell in Illinois without a dealer license?+
Selling 5 or more used vehicles in a 12-month period — or acting as a broker/intermediary — requires a used vehicle dealer license (625 ILCS 5/5-102). Limited exceptions exist for certain house trailers and rebuilt-salvage vehicles sold to other licensees.
How long is a Illinois dealer license valid?+
Dealer licenses run on the calendar year and expire December 31; renew annually with the Secretary of State. Applying after June 15 halves the first-year license fee and Recovery Fund Fee, but the license still expires that December 31. The surety bond must not expire before December 31 of the license year.
Is dealer training or an exam required in Illinois?+
Yes. At least one owner, corporate officer, director, member or partner must complete a minimum 8-hour Secretary of State-approved prelicensing education course BEFORE submitting the application (625 ILCS 5/5-102.5). It applies to used and Buy Here, Pay Here dealers; new-vehicle dealers are exempt.
How do temporary tags work for Illinois dealers?+
Dealers move unregistered inventory on dealer 'in-transit' plates ($45/set) and issue the buyer a Temporary Registration Permit (TRP) at the point of sale. Titles, registration and TRPs are processed through the Secretary of State's Electronic Registration and Title (ERT) system, and the SOS has been moving TRP issuance to electronic processing — confirm the current TRP procedure and any electronic temporary-plate rollout with Vehicle Services.
Data verified 2026-07-17. Requirements change — confirm with the Illinois Secretary of State — Vehicle Services Department (Dealer/Remitter Licensing) before filing.
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