How to get a used car dealer license in Illinois
A practical walkthrough of the Used Vehicle Dealer application — fees, bond, timeline, and what to expect at each step. Verified against the official agency as of June 2026.
Getting a Used Vehicle Dealer used-car dealer license in Illinois:
- Surety bond required
- $50,000 (per location)
- Application fee
- $1,000 (or $500 if after June 1)
- License term
- Annual (calendar year)
- Typical timeline
- 4 – 8 weeks
- Typical first-year cost
- $1,200 – $2,800
This guide is informational and does not replace official Illinois requirements. Always verify with the Illinois Secretary of State, Dealer/Remitter Licensing before applying.
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Who can apply for a Used Vehicle Dealer license
Illinois requires a used vehicle dealer license to operate a dealership buying and selling used vehicles. It's issued by the Illinois Secretary of State's Dealer/Remitter Licensing Section.
In Illinois this is also commonly called an auto dealer license, car dealer license, or motor vehicle dealer license — all the same Used Vehicle Dealer authority to sell used vehicles.
- An established place of business in Illinois zoned for vehicle sales, with an office, display lot, and signage
- A $50,000 surety bond per licensed location (required for the first 60 months of operation)
- A registered Illinois business entity and a sales-tax (ROT) account
- A clean background for the applicant and owners
- Proof of liability insurance on the dealership
- A passing inspection of the dealership location
Step-by-step process
- 1
Secure a compliant location
Get an Illinois location zoned for vehicle sales with a permanent office, a display lot, and signage. Confirm local zoning allows vehicle sales before you commit, since the location is inspected.
- 2
Register your business and tax accounts
Form your Illinois business entity, get an EIN, and register for a Retailers' Occupation Tax (sales-tax) account so you can collect and remit tax on sales.
- 3
Post your $50,000 surety bond
Buy a $50,000 surety bond for each licensed location. Illinois raised the amount from $20,000 to $50,000 in 2018; new dealers must stay bonded for the first 60 months of operation. You pay an annual premium, not the full bond.
- 4
Submit the application and fee
File the dealer application with the Secretary of State's Dealer Licensing Section. The fee is $1,000 if you apply before June 1, or $500 if you apply after June 1 (it's prorated for the calendar-year term). Include your bond, insurance, and business documents.
- 5
Pass the location inspection
The Secretary of State inspects the dealership to confirm the office, lot, and signage meet the requirements. Have everything operational before the inspector arrives.
- 6
Receive your license and dealer plates
Once approved, you're a licensed Illinois used vehicle dealer and can obtain dealer (DL) plates to operate, buy at auction, and retail used vehicles.
Illinois dealer license cost — fees breakdown
| Item | Amount |
|---|---|
Dealer license fee $1,000 if applying before June 1; $500 if after. | $1,000 / $500 |
Surety bond premium (annual) 1-3% of the $50,000 bond, by credit. | $500 – $1,500 |
Dealer plates Per-plate fee, obtained after licensing. | Varies |
Business registration + sales-tax account IL entity filing + ROT registration. | Varies |
Liability insurance Required on the dealership. | Varies |
Surety bond requirement
Illinois requires every used-vehicle dealer to post a $50,000 surety bond. The bond protects buyers from misconduct (odometer fraud, undisclosed liens, deceptive trade practices) and the state from unpaid taxes.
You don't pay the full bond amount up front — you pay an annual premium to a surety company, typically 1-3%of the bond's face value. Your actual premium depends on personal credit and business history.
Illinois requires a $50,000 surety bond per licensed location (raised from $20,000 in 2018). New dealers must maintain the bond for the first 60 consecutive months of operation, provided they stay current on title/registration fees and taxes. You pay an annual premium (1-3%), not the full bond.
Renewal
Illinois dealer licenses run on the calendar year and renew annually. Keep your $50,000 bond and insurance current and your location compliant. New dealers stay bonded for the first 60 months; after that, the bond requirement may ease if you've remained in good standing — confirm with the Secretary of State.
Common questions
Why is the Illinois dealer fee $1,000 — or $500?+
The Illinois dealer license fee is $1,000 if you apply before June 1, and $500 if you apply after June 1. That's because the license runs on the calendar year, so applying later in the year costs less for the shorter remaining term.
How big is the Illinois dealer bond?+
A $50,000 surety bond per licensed location, raised from $20,000 in 2018. New dealers must keep the bond in force for the first 60 months of operation. You pay an annual premium (typically 1-3% of the bond), not the full amount.
Who licenses car dealers in Illinois?+
The Illinois Secretary of State's Dealer/Remitter Licensing Section licenses and regulates motor vehicle dealers — not a separate board or the DMV. They handle the application, bond, and location inspection.
Can I sell cars from home in Illinois?+
No. Illinois requires an established place of business with an office, display lot, and signage, in an area zoned for vehicle sales, that passes a state inspection. A residence won't qualify unless it's separately zoned and set up for vehicle sales.
How long does it take to get licensed in Illinois?+
Most applicants are licensed in about 4 to 8 weeks once the location is ready, the bond is posted, and the application is complete. Scheduling and passing the Secretary of State inspection is usually the longest step.
How much does a Illinois dealer license cost?+
Plan for about $1,200 – $2,800 in the first year. That covers the $1,000 (or $500 if after June 1) application fee and the $50,000 (per location) surety bond — you pay an annual premium of roughly 1-3% of the bond, not the full amount — plus business-formation, facility, and dealer-plate costs. See the full fees breakdown above.
How do I get dealer plates in Illinois?+
Dealer plates are separate from the license itself. Once your Used Vehicle Dealer license is approved, you apply for dealer plates and pay a per-plate fee (listed in the fees breakdown above). You can't obtain dealer plates before the license is issued.
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