Steps to Obtain an Auto Dealer License in Maryland
If you’re planning to sell, buy, exchange, or manufacture motor vehicles in Maryland, you’ll need to obtain a motor vehicle dealer license — commonly referred to as an auto dealer license. This guide will walk you through the different types of dealer licenses available in Maryland, the application process, and how to renew your license.
Types of Auto Dealer Licenses in Maryland
Maryland issues 13 types of motor vehicle-related licenses. Here are the six most common dealer licenses, along with what each one allows you to do:
| License Type | Description |
|---|---|
| New Vehicle Dealer | Sell new vehicles under a franchise agreement with a licensed manufacturer or distributor. |
| Used Vehicle Dealer | Sell pre-owned vehicles to the public or other licensed dealers. |
| Wholesale Dealer | Buy, sell, or exchange used vehicles exclusively with other licensed dealers or charities. Cannot sell directly to the public. |
| Motorcycle Dealer | Sell new or used motorcycles under a franchise agreement. |
| Emergency Vehicle Dealer | Sell new emergency vehicles under a franchise agreement. |
| Trailer Dealer | Sell new or used trailers (under or over 15 feet) under a franchise agreement. |
A franchise agreement is a contract that authorizes a dealer to sell vehicles from a specific manufacturer or distributor.
To view the complete list of available licenses, visit the Maryland MVA Dealer Information page.
How to Get a Maryland Auto Dealer License
Though there are different license types, the general application steps remain largely the same. Here’s a detailed breakdown of what you’ll need to do:
Step 1: Secure a Business Location
You must establish a physical business location that meets specific state requirements:
- Required amenities: Office with a desk, chair, locking file cabinet, telephone (preferably landline), signage, lighting, heat, and hard-wired electricity.
- Lot requirements:
- Must be visible from a public road
- Space to display a minimum of 10 vehicles
- Customer parking
- Surface area must be paved, stone, or similar (no dirt or grass)
- Exterior signage
- Access to a repair facility (either on-site or within 5 miles via a written contract)
Note: Wholesale dealers are exempt from this requirement.
Step 2: Gather Required Documents
You’ll need the following documentation for your license application:
- Federal Tax ID (EIN): Obtain this from the IRS website or by calling 1-800-829-4933.
- Criminal Background Check: Fill out form CS-011 and submit with your application.
- Zoning Approval: Use form CS-053 to confirm your location complies with local zoning laws.
- Business Registration: Register your business via the Maryland Department of Assessments and Taxation.
- Repair Facility Agreement: If using an off-site repair location, submit form CS-125.
- ERT Contract: Partner with an Electronic Registration and Titling (ERT) provider. Accepted providers include:
- CVR: 1-800-333-6995
- DealerTrack: 1-800-876-2312
- Title Tech: 1-866-689-0578
- Trader’s License: Apply through the Maryland OneStop Portal. Required to legally buy/sell goods in your county.
- Franchise Agreement (for new vehicle dealers): Must be licensed and verified by the MVA.
Step 3: Obtain a Maryland Motor Vehicle Dealer Bond
You’re required to secure a bond. Bond amounts vary based on license type and the number of vehicles you sell. These bonds protect customers by ensuring dealers meet their legal obligations.
Here’s a sample of bond requirements:
| License Type | Vehicles Sold | Bond Amount |
|---|---|---|
| New Vehicle Dealer | 1–500 | $50,000 |
| 2500+ | $300,000 | |
| Used Vehicle Dealer | 1–250 | $15,000 |
| 2500+ | $150,000 | |
| Wholesale Dealer | 1–250 | $15,000 |
| 2500+ | $150,000 | |
| Trailer Dealer | Under 15′ | $5,000 |
| Over 15′ | $15,000 |
You can easily get bonded through providers like SuretyNow by completing a short online form and receiving your bond via email.
Step 4: Get Insurance Coverage
You’ll need both liability and workers’ compensation insurance:
- Liability Insurance: Covers injuries or property damage that occur on your business premises or in vehicles. Providers like NEXT Insurance offer affordable plans.
- Workers’ Compensation: Covers medical expenses and lost wages for injured employees. You can apply for a policy through SuretyNow or other insurance companies.
Attach a Certificate of Insurance to your application once your policy is in place.
Step 5: Complete the Dealer License Application
Fill out and submit the CS-042 Motor Vehicle Dealer Application. This form will ask for details about your business, ownership, location, and the documents you’ve collected. Make sure all forms are signed and submitted as a complete package to avoid delays.
License Renewal
Dealer licenses in Maryland must be renewed annually. You’ll receive a renewal notice with instructions. Keep your insurance, surety bond, and business documents up to date to ensure a smooth renewal process.
Final Thoughts
Getting your auto dealer license in Maryland may seem complex, but by following this step-by-step guide, you’ll be prepared to navigate the process with confidence. From selecting the correct license type to gathering documents, securing a surety bond, and submitting your application — each step brings you closer to legally operating your dealership.
