Dealer License FAQs
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Act 539 established the regulatory license for new motor vehicle dealers, used motor vehicle dealers, motor vehicle wholesalers, motor vehicle reconditioners, and motor vehicle rebuilders. These regulatory licenses are commonly referred to as Act 539 licenses and are defined below (reference Section 40-12-390, Code of Alabama 1975).
New motor vehicle dealer - Any person, firm, or corporation which holds a bona fide contract or franchise in this state in effect with a manufacturer or distributor of new motor vehicles and is engaged in the business of selling, advertising, or negotiating the sale of new motor vehicles or new and used motor vehicles, and the duly licensed new motor vehicle dealers shall be the sole and only persons, firms, or corporations entitled, other than in connection with the rental or leasing of new motor vehicles by persons engaged in the business of motor vehicle rental and leasing, to sell and publicly or otherwise solicit and advertise for sale new motor vehicles.
Used motor vehicle dealer - Any person, firm, or corporation engaged in the business of buying, selling, exchanging, advertising, or negotiating the sale of five or more motor vehicles at retail during a calendar year, whether or not the motor vehicles are owned by such person, firm, or corporation, or in offering or displaying motor vehicles for sale at retail to the public. The term "selling" or "sale" shall include lease-purchase transactions. The term "used motor vehicle dealer" does not include banks, credit unions, licensees of the State Banking Department, and finance companies which acquire motor vehicles as an incident to their regular business and does not include motor vehicle rental and leasing companies.
Motor vehicle wholesaler - Any person, firm, or corporation engaged in the business of buying, selling, or exchanging motor vehicles at wholesale to motor vehicle dealers and not to the public.
Motor vehicle reconditioner - Any person, firm, or corporation engaged in the business of refurbishing, repairing, or replacing damaged parts of motor vehicles for the purpose of preparing the vehicle for resale under the same identification and identity as the vehicle bore before the refurbishing.
Motor vehicle rebuilder - Any person, firm, or corporation engaged in the business of making or causing to be made extensive repairs, replacements, or combination of different motor vehicles to the extent of extinguishing the identity of the original vehicle to the extent that the finished motor vehicle shall be assigned a new identification to be issued by the Department of Revenue under the provisions of Chapter 8 of Title 32.
The Act 539 license period begins on October 1st and ends on September 30th of the following calendar year. All licenses expire on September 30th regardless of whether the license was issued on October 1st of the prior year or at some date later in the license year. Licensees who want to continue their license must renew it by no later than October 31st of the subsequent license year to maintain a valid license.
Effective August 1, 2012, all new regulatory license applications and regulatory license renewal applications and license application fees shall be filed electronically through the following dealer license website: https://dealerlicense.mvtrip.alabama.gov. Upon completion of the application, an application receipt must be printed and mailed to the Department along with supporting documents specified on the application receipt.
A copy of the completed insurance certificate is acceptable as long as it is legible and unaltered. All other documents must be originals.
Franchised new car dealers must post a $25,000 bond while all other licensees must post a $10,000 bond. If the bond is cancelled for any reason, the license will be revoked. If you decide to change your bonding company, you must deliver the new bond to the Motor Vehicle Division before the old bond is cancelled. Otherwise, the license will be revoked when the coverage ceases under the old bond. Note: a new bond must be provided when changing from one legal entity to another.
Licensed motor vehicle dealers, motor vehicle reconditioners, motor vehicle rebuilders and motor vehicle wholesalers must maintain blanket motor vehicle liability insurance coverage for all vehicles, including those held in inventory by the licensee, regardless of the party in possession of the vehicle, whether located at a licensed location of the licensee, or operated on any public street or highway within the State of Alabama. Evidence of such coverage, in the form of an insurance certification form generated through the dealer license website, must accompany the application receipt. The coverage amounts must be no less than the minimum amounts set for bodily injury or death and for destruction of property under Section 32-7-6(c), Code of Ala. 1975.
Yes, each application must be accompanied by a completed certificate of insurance generated through the dealer license website. If you decide to change your insurance company, you must deliver a new certificate of insurance to the Motor Vehicle Division before the old policy is cancelled.
A sales tax number assigned in the same name as the business is required if the licensee sells any motor vehicles to non-dealers.
No, application for a new or used retail dealer’s license will be accepted without a sales tax number for the business.
To apply or register for a sales tax number, you may go to http://revenue.alabama.gov/salestax/register.html. Read the Instructions prior to registering so that you will be prepared with the information required for registering. When you are done, click on the I Agree button at the end of the process and you will receive a confirmation number. If there are no problems with the application and you have selected the e-mail option, you should receive your account number within two to three days. A license will be mailed to you later. If you prefer to apply in person or through the mail, you may complete the Combined Registration/Application/Change Form, (form COM:101). Click here to download the COM:101 form. You may also contact the Business Registration Unit in Montgomery by calling (334) 242-1584 or pick up an application from your local Taxpayer Service Center. Remember to allow time for your Sales Tax Number to arrive before submitting an application for a retail dealer.
Yes, you are required to obtain a motor vehicle dealer’s license if you are publicly selling and soliciting the sale of motor vehicles on-line.
If you decide to relocate your business during the year, you must promptly contact the Motor Vehicle Division, in writing, to determine if the new location is acceptable for licensing. Furthermore, you must provide a new insurance certificate for the new location and proof of the new telephone number, if applicable. Retail dealers must also furnish photographs of the new location and sign. In addition, you must submit the applicable license fee.
There is no charge for the first location, but each additional location has a $5.00 charge.
An additional fee is only required when additional locations are added to the license.
Application receipts and supporting documents may be delivered to the Motor Vehicle Division 2545 Taylor Road; Montgomery, AL 36117. However, all license applications and payment of fees must first be processed through the dealer license website.
If you are a motor vehicle dealer (retail, wholesaler, rebuilder or reconditioner) you must have a permanent business location. Each permanent location must be owned or leased by the sole proprietor, a partner, LLC member or corporation. If you are a retail dealer, you are required to have a permanent sign that meets the sign requirements (see Rule 810-5-12-.01).
Yes. You may use digital photographs. However, they must be clear. (see Rule 810-5-12-.01 for details about sign and photograph requirements.).
A tent or off-site sale can only occur in the city or county where you are licensed as a used motor vehicle dealer or within your area of responsibility as a new motor vehicle dealer. The fee for an off-site sale is $25. The off-site license must be obtained at least 14 days prior to the beginning of the sale. The offsite license must be obtained through the dealer license website: https://dealerlicense.mvtrip.alabama.gov. Once this license is obtained, a Section 40-12-51 license should be obtained from the county probate office, as well as any city licenses required.
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