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All state guides Alabama dealer license

How to get a used car dealer license in Alabama

You apply online to the Alabama Department of Revenue for a master dealer license, backed by a $50,000 continuous bond and blanket liability insurance. You need a permanent location with a sign and display area, and a county privilege license before dealer plates are issued.

  • Sourced to ALDOR
  • Checked October 2026
  • Free
License
Master dealer license (used motor vehicle dealer)
Surety bond
$50,000
State fee
$125
Pre-license course
None before licensing
Background check
Owner ID copies, no fingerprints
License term
1 year, renew October 1
What the state asks for

Alabama dealer license requirements

The figures a first-time used car dealer needs before applying to ALDOR. Each row shows how well it is supported.

Surety bond
$50,000Official source

A continuous surety bond payable to ALDOR. It also covers the bond you need as a designated agent for title work, so you do not buy a second one.

State license fee
$125Official source

Master dealer license fee for each license year. Each additional location is $5. Dealer plates ($25 each) and the county privilege license are paid separately.

Pre-license education
None before licensingOfficial source

ALDOR's application rule lists no course or exam. Once licensed, you must finish ALDOR's online designated agent training before you can process title applications.

Background check
Owner ID copies, no fingerprintsOfficial source

The application asks for the home address, Social Security number and a copy of the driver license or ID card of every owner, partner, member, officer and director. The rule does not list fingerprints.

Insurance
25/50/25 or $75,000 CSLOfficial source

Blanket liability coverage on business and inventory vehicles: $25,000 per person, $50,000 per accident and $25,000 property damage, or a $75,000 combined single limit. Your insurer verifies it to ALDOR.

Business location
Permanent lot, sign, display areaOfficial source

A permanent location zoned for business with posted hours, a display area and a sign with letters at least 6 inches high. Shared space, virtual offices and two dealers under one roof do not qualify.

License term and renewal
1 year, renew October 1Official source

The license year starts October 1 and every license is renewed on October 1. You get 30 days of grace, then a penalty of 15% of the license amount applies.

Sales allowed without a license
Fewer than 5 per calendar yearOfficial source

You count as a used motor vehicle dealer once you sell five or more vehicles in a calendar year that were never titled or registered in your name, or if you display vehicles for retail sale to the public.

Processing time
About 3 to 5 business daysOfficial source

ALDOR says processing takes about 3 to 5 business days, counted from the day it receives your documents.

“Official source” means the state agency’s own page, form or law. Where the state’s sources did not settle a point, the row says so instead of showing a guess.

Who issues the license

Alabama Department of Revenue, Motor Vehicle Division

License you apply for

Master dealer license (used motor vehicle dealer)

Official licensing page

Check the fee and filing method in MyDMV

ALDOR's own pages do not fully agree. The licensing page says supporting documents are mailed, while an ALDOR FAQ says to upload everything to MyDMV. One page gives used dealers 10 dealer plates and a FAQ says 5. State law also lets ALDOR recalculate the $125 fee every five years. Follow your transmittal sheet and the fee MyDMV shows when you file.
Step by step

How to get a Alabama dealer license

The order that works for a first application. Tick each step off as you finish it.

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  1. Set up the business and its tax accounts

    Form the entity or register the trade name, get an EIN (a sole owner does not need one) and a state sales tax number, which the application asks for. Use exactly the same legal name and address on the lease, the bond and the insurance policy.

    EIN and state sales tax number

  2. Secure a permanent location and put up the sign

    Check zoning before you sign a lease. ALDOR does not accept shared space, a virtual office or a second dealer under the same roof. Post your operating days and hours, mark out a display area, and install a sign with letters at least 6 inches high that can be read from the street.

    Rule 810-5-12-.01

  3. Apply through Alabama Partner Registration

    File the master dealer license application online in MyDMV and pay $125, plus $5 for each extra location. List every owner, partner, member, officer and director, with a copy of each person's driver license or ID card. When you submit, the system gives you a transmittal sheet listing the documents ALDOR needs.

    MyDMV, $125

  4. Send the bond, insurance proof and photos

    Get the $50,000 continuous bond with the surety's power of attorney. Both must carry the same issue date. Your insurer verifies the blanket liability policy electronically or on form MVD-1. Add photos of the dealership and its sign. The bond and insurance forms are generated only after you start the application.

    $50,000 bond, form MVD-1

  5. Print the license once ALDOR approves it

    ALDOR says processing takes about 3 to 5 business days after it receives your documents. Licenses are not mailed. You get an email telling you to log in to MyDMV and print yours.

    About 3 to 5 business days

  6. Finish designated agent setup and training

    Every Alabama dealer must become a designated agent to process title applications. Your dealer bond covers the designated agent bond. Complete the online designated agent training, because ALDOR does not grant title access in MyDMV until it is done.

    Online training required

  7. Buy the county privilege license, then order plates

    Take your state license to the county licensing office and buy the privilege license. ALDOR issues dealer plates only with proof of it. Request plates through your MyDMV account at $25 each.

    Dealer plates $25 each

Practical advice

Run three checklists side by side: the state dealer license, designated agent status for title work, and the county privilege license. Ask your county licensing office what it wants to see while the state application is pending. If you apply late in the license year, plan for renewal right away, because every license comes up for renewal on October 1.

Before you apply

Seven things to settle before any state application: the business, the owners, the money and the property.

Read the startup playbook
The lot and the office

Alabama dealer location requirements

What the state checks at the business address.

  • A permanent location with room to display at least one vehicle and to keep the books and records ALDOR may inspect.
  • The location must be zoned for business, have posted operating days and hours, and have an area set aside to display inventory.
  • A sign showing your licensed name that identifies the site as a motor vehicle dealer, with letters at least 6 inches high.
  • The sign must be readable from the street in front of the display area or from 50 yards away, whichever is greater.
  • Shared or common space, cubicles, virtual or rotating offices, and space rented by the hour or day do not count as a permanent location.
  • Only one dealer is allowed under the same roof.
  • Your first application includes a photo of the dealership and its main sign, one for each location.

Zoning comes first

A site that meets the state’s rules can still fail local zoning. Get written approval for vehicle sales from the city or county, and ask the landlord for a lease that depends on the license being issued, before you sign.
Once you are licensed

Keeping a Alabama dealer license

Renewal and ongoing duties

Renew by October 1 each year. There is a 30-day grace period, then a 15% penalty. Keep the bond and the blanket liability policy in force: a cancelled bond or policy leads to revocation, and going without insurance can bring a civil penalty of up to $5,000. Update MyDMV if you move, and buy a $25 off-site sales license at least 10 days before any off-site sale.

Federal rules that apply here too

  • The FTC Buyers Guide, posted on every used vehicle you offer for sale.
  • The FTC Safeguards Rule: a written plan for protecting customer financial information.
  • IRS Form 8300 when a customer pays more than $10,000 in cash.
  • A federal odometer disclosure on each transfer.
How each federal rule works
FAQ

Alabama dealer license FAQ

The questions first-time dealers ask most.

How do I get a used car dealer license in Alabama?

Apply online through Alabama Partner Registration in MyDMV for a master dealer license. You need a permanent location with a sign and a display area, a $50,000 continuous bond, blanket liability insurance and the $125 fee. After ALDOR approves the license, you complete designated agent training, buy a county privilege license and then request dealer plates.

How much is the dealer bond in Alabama?

$50,000. It is a continuous surety bond payable to the Alabama Department of Revenue, and it also satisfies the bond you need as a designated agent for title work. The bond must come with the surety's power of attorney carrying the same issue date.

How much does an Alabama dealer license cost?

The master dealer license is $125 for each license year, plus $5 for each additional location. Dealer plates are $25 each. The county privilege license, the bond premium and your insurance are separate costs.

Do I need a pre-licensing course in Alabama?

No pre-licensing course or exam appears in ALDOR's application requirements. After you are licensed, you must complete ALDOR's online designated agent training before you can process title applications in MyDMV.

Can I get an Alabama dealer license without a car lot?

No. You need a permanent location that is zoned for business and has posted hours, a sign and an area set aside to display inventory. ALDOR's rule excludes shared or common space, cubicles, virtual or rotating offices, space rented by the hour or day, and more than one dealer under the same roof.

How many cars can I sell in Alabama without a dealer license?

Alabama law treats you as a used motor vehicle dealer once you sell five or more vehicles at retail in a calendar year that were not previously titled or registered in your name, or if you offer or display vehicles for retail sale to the public. Operating without the license carries a $500 penalty for a first violation and $1,000 for later ones.

Sources

Checked October 2026. This is general information, not legal, tax or insurance advice. Fees, bond amounts and forms change, and local zoning rules vary. Confirm current requirements with ALDOR or your attorney before you sign a lease or pay a fee.

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