To apply, you must:
9 Alabama Dealer License Requirements
Alabama Dealer Licenses are issued by the Alabama Department of Revenue (ALDOR), Motor Vehicle Division. This page covers Alabama's 4 Dealer License types, their requirements, bond size, costs, and how to apply.
Name your Dealership
Your company name is the first step, because you use it through the entire Dealer License process. Alabama's Master Dealer License application accepts 5 forms of organization: Individual, Partnership, Limited Liability Company (LLC), Limited Liability Partnership (LLP), and Corporation.
An LLC keeps your business separate from your personal life and adds trust to the name. With an LLC, you add or remove members on ALDOR's Officers page at renewal.
Choose your Dealer License Type
Alabama's 4 Dealer License types are checked off on one Master Dealer License application, so a Dealer can hold any combination. Most people start as a Used Motor Vehicle Dealer. Off-road vehicle dealers need the Master Dealer License too (§40-12-401).
| License Type | What It Lets You Do |
|---|---|
| Used Motor Vehicle DealerThe type most people start with | Buy and sell used vehicles at retail. Up to 10 dealer license plates |
| New Motor Vehicle Dealer | Sell new vehicles. A Master Dealer License held as a New Motor Vehicle Dealer also entitles you to operate as a used dealer, wholesaler, and rebuilder. Up to 35 dealer license plates |
| Motor Vehicle Wholesaler | Sell only to other licensed Dealers, never to the public. The same office rule as retail |
| Motor Vehicle Rebuilder | Rebuild vehicles for sale, checked on the same Master Dealer License application |
Alabama also issues 3 licenses separately:
- Motor Vehicle Wholesale Auction License. $125, on the same $50,000 bond form, for running a wholesale auction (§40-12-447)
- Off-Site Sales Event License. $25 per event, up to 3 events a year of 10 consecutive days each; used-vehicle sales stay inside your own county or city
- Automotive Dismantler and Parts Recycler License. $225, under a different part of the law; a Master Dealer License does not cover a wrecking yard
Get your Dealer Bond (Surety Bond)
An Alabama Master Dealer License requires one $50,000 surety bond for all 4 Dealer types, payable to the Alabama Department of Revenue (Code of Ala. §40-12-398). The bond protects customers if you break Alabama's dealer laws. A $50,000 Dealer Bond costs only $500 a year, after a credit check.
It is a continuing bond: coverage starts the day the license issues and stays in force until cancelled. Every Alabama Dealer is also a Designated Agent of ALDOR, the role that processes titles, and this one bond covers that too. If the surety cancels without a same-day replacement, ALDOR revokes the license and the Designated Agent status.
| License Type | You Pay | Bond Amount |
|---|---|---|
| Master Dealer LicenseAlabama - New or Used Motor Vehicle Dealer ($50,000) | $500/yearabout $42 a month | $50,000 |
| Automotive Dismantler and Parts Recycler LicenseAlabama - Automotive Dismantler and Parts Recycler ($50,000) | $500/yearabout $42 a month | $50,000 |
Get your Dealer Liability Insurance
An Alabama Master Dealer License requires blanket liability insurance on your business and inventory vehicles, filed with the application (Code of Ala. §40-12-392(c)). The statute says the application “shall be denied” without satisfactory proof.
The minimums are Alabama's ordinary auto limits: $25,000 bodily injury per person, $50,000 per accident, and $25,000 property damage. A $75,000 combined single limit also works. Those are the limits, not the cost; your agent quotes the price. Your insurer verifies the coverage electronically or on form MVD-1 before the license issues, and a lapse revokes the license.
Set up your Dealer Office
An Alabama Master Dealer License requires a permanent location, and 1 rule covers all 4 Dealer types, wholesaler included (Ala. Admin. Code 810-5-12-.01). It must be zoned for business, have posted operating days and hours, and have an area designated as display space for your inventory.
The rule never bans a house by name. An ordinary house on a residential lot fails the business-zoning test in most Alabama cities, and it has no display area or street sign. The table below is the standard for every location.
| What Alabama Requires | |
|---|---|
| Location | A permanent location. Not a shared or common space with other tenants, space rented by the hour or day, a cubicle, or a temporary, virtual, or rotating office. Only 1 Dealer under the same roof |
| Zoning | Properly zoned for business. Local zoning decides; ALDOR sets no statewide standard and asks for no certificate of occupancy |
| Display space | An area designated as display space for your inventory. No minimum vehicle count and no minimum square footage |
| Sign | The licensed business name, identifying a motor vehicle dealer's place of business, in letters at least 6 inches high, legible from the street fronting the display area or from 50 yards, whichever is greater. Freestanding, a permanent structure, or attached to the building |
| Hours | Operating days and hours posted |
| Parking | No minimum number of spaces |
Prove the location is yours with 3 of these 9:
- Your driver's license or non-driver ID is issued by Alabama (individual applicants)
- The corporation, partnership, LLC, or LLP is incorporated in Alabama or registered with the Alabama Secretary of State as a foreign entity
- The corporation's principal owner is a resident of Alabama
- You filed an Alabama income tax return for the previous tax year
- You paid Alabama real estate or personal property taxes in the business's name
- You receive Alabama utility bills in the business's name
- You hold an Alabama certificate of title or motor vehicle registration
- You have a lease agreement or mortgage statement for the address on the application
- Other factors that clearly show the business's legal residence in Alabama
Background Check — Not Required
An Alabama Master Dealer License requires no background check, no fingerprints, and no criminal history question. The application asks for 4 documents: the bond, proof of insurance, ID copies for all owners, partners, members, officers, and directors, and a dealership photo (810-5-12-.01(d)). Some bond websites say Alabama requires fingerprints or an ALEA check; the rule lists neither.
If you have a record
- No conviction bars you. ALDOR's 10 reasons to deny or revoke a license are about fraud, records, stolen vehicles, odometers, and tax returns. A criminal conviction isn't one of them (§40-12-396(b))
- No waiting period. Nothing in the statute or rules sets a time after a conviction or release
- Felony or misdemeanor, same answer. Neither word appears in the licensing law
- Nothing to disclose. The application has no conviction question; the only accuracy rule is that a material misstatement is grounds for denial
- If denied for any reason, you can appeal to the Alabama Tax Tribunal (§40-12-392(a))
Submit your Dealer License Application
You apply online through ALDOR's dealer license portal, and the application fee is $125. Every owner, partner, member, officer, and director gives an SSN and a copy of a driver's license or non-driver ID from any state. An LLC, LLP, partnership, or corporation adds its FEIN. Every fee is itemized under costs.
Alabama licenses Dealers in 2 layers, and the law sets the order (§40-12-391(a)):
- State first. The Master Dealer License from ALDOR, $125 a year
- County second. A privilege license from your county Probate Judge or License Commissioner: Section 51 for automobiles, Section 62 for motorcycles, Section 169 for trailers and road machinery. It costs $46 to $211, set by the population of the city where the lot sits
- The order is fixed. The county can't sell its license until you show the Master Dealer License, and ALDOR's Handbook tells county clerks the same
Submit your Dealership Photo
Alabama verifies your location from 1 photograph, not a site visit. You submit a photo of the dealership and its principal sign with the application (810-5-12-.01(d)(4)). ALDOR may also ask for any documentation it needs to verify the application, during review and before the license issues. The photo is required once; renewals skip it unless the sign or location changes.
Get your Dealer License Plates
Alabama dealer license plates come from ALDOR, not the county, once your county privilege license is proven. A Used Motor Vehicle Dealer can buy up to 10 dealer and motorcycle dealer plates combined; a New Motor Vehicle Dealer up to 35. A Dealer with 300 or more title transfers in the prior license year can buy 25 more (§40-12-264).
Dealer tags let you drive your inventory. Owners, partners, corporate officers, and employees can drive on them, and a prospective buyer for up to 72 hours. They go only on vehicles in dealership inventory, not on a rental, lease, tow truck, or service van. A dealer plate doesn't replace registering a vehicle you keep.
- $25 per dealer plate and $17 per motorcycle dealer plate, plus a $2 issuance fee each; non-refundable
- $5 dealer transit plate, good for 7 days, to move inventory between locations or to and from repair
- $5 auction transit plate, good for 7 days, for a licensed wholesale auction
Dealer License Cost
An Alabama Master Dealer License costs $125 a year. The county privilege license adds $46 to $211, set by the population of the city where your lot sits. Every other fee on this page is in the table.
| Fee | Amount |
|---|---|
| Master Dealer License | $125 initial$125 renewal, every year$5 per additional location |
| County privilege licenseSection 51, 62, or 169, by the population of the city where the lot sits | $46 population 2,500 or less, or unincorporated$76 2,500 to 5,000$98.50 5,000 to 10,000$121 10,000 to 25,000$151 25,000 to 50,000$211 over 50,000Half rate for a second location in the same city |
| Dealer Bond | $500 a year, $50,000 bond, credit check required |
| Liability insurance | $25,000 / $50,000 / $25,000 minimum limits, or a $75,000 combined single limit; priced by your agent |
| Dealer plates | $25 per dealer plate$17 per motorcycle dealer plate$2 issuance fee per plate$5 dealer transit plate, 7 days$5 auction transit plate, 7 days |
| Off-Site Sales Event License | $25 per event; a separate facilitator pays its own $25 |
| Motor Vehicle Wholesale Auction License | $125 |
| Automotive Dismantler and Parts Recycler License | $225 application$500 a year, $50,000 bond |
| Late renewal penalty | 15% of the license fee, after the 30-day grace period |
Dealer License Renewal
An Alabama Master Dealer License is valid October 1 to September 30 and renews by October 1 every year (§40-12-392(b)). Renewal is $125, the same as the application fee. A 30-day grace period runs to October 30 with no penalty; after that, ALDOR adds 15% of the license fee. The county privilege license renews on the same October 1 cycle.
Common Questions
Can you get an Alabama Dealer License with a felony?
Yes. Alabama's dealer licensing law has no criminal-history ground: the 10 reasons ALDOR may deny or revoke a license don't include a conviction (§40-12-396(b)). There is no waiting period, no felony-or-misdemeanor test, and no conviction question on the application. More under Background Check.
Can you get a Dealer License in Alabama without a lot?
Not from an ordinary house. Every Alabama Dealer location must be properly zoned for business, have a designated display space, and carry a permanent sign legible from the street. Alabama sets no minimum size or vehicle count for the display space. A business-zoned parcel with a display area and a roadside sign can qualify even if you also live there.
How many cars can you sell in Alabama without a Dealer License?
Alabama requires a Master Dealer License once you sell 5 or more used vehicles at retail in a calendar year (Code of Ala. §40-12-390(15)). Only vehicles not already titled or registered in your own name count toward the 5. The definition also covers anyone offering or displaying vehicles for sale to the public, at any count.
What do you need for an IAAI Dealer License in Alabama?
IAA doesn't issue a Dealer License; it's a salvage and repairable auction that admits licensed Dealers. In Alabama you bring the Master Dealer License from ALDOR, checked as a Used Motor Vehicle Dealer, with its $50,000 bond and $125 application fee. The same license opens Copart, Manheim, and the other dealer-only auctions.
Do I have to live in Alabama to get a Dealer License?
No. The business needs a permanent location in Alabama, proven with 3 of the 9 factors in the Office section. An owner living in Alabama is 1 of those factors, for a corporation, not a requirement. An out-of-state LLC or corporation qualifies by registering with the Alabama Secretary of State as a foreign entity.
What is an Alabama Designated Agent, and do I have to be one?
Yes. Every Alabama Dealer must also become a Designated Agent of ALDOR, the authorization to process vehicle titles (§32-8-34). You complete ALDOR's online Designated Agent Training before access is granted; ALDOR publishes no hours or price for it. Your $50,000 Dealer Bond covers the Designated Agent bond too, so there is no second bond.
How long does an Alabama Dealer License take?
No Alabama law sets a deadline for ALDOR to issue a Master Dealer License (§40-12-392(a)). ALDOR's own estimate is approximately 3 to 5 business days from the day it receives your documents, a customer-service estimate, not a rule. There is no site inspection to schedule, so the wait is document review.
Do I need a business bank account?
No. No Alabama statute or ALDOR rule requires a business bank account for the Master Dealer License. It isn't in the application information, the document list, or the 9 location factors. One is still useful for keeping sales tax and floor plan records separate.
Support
ALDOR's Motor Vehicle Division issues the Master Dealer License, the Wholesale Auction License, off-site sale licenses, Designated Agent status, and dealer plates. The county privilege license comes from your county Probate Judge or License Commissioner.
| Contact | Detail |
|---|---|
| Department | Alabama Department of Revenue, Motor Vehicle Division |
| Phone | (334) 242-9000 Motor Vehicle Division |
| [email protected] | |
| County license | Your county Probate Judge or License Commissioner; the title varies by county |
Additional sources (9)
The forms and the portal for each step are linked in the steps. These are the law, the rules, and the agency pages the page was checked against.
- Code of Ala. §40-12-391, the Master Dealer License — the two-layer rule: no county Section 51, 62, or 169 license without a Master Dealer License first
- Code of Ala. §40-12-51, the county automobile dealer license — the state portion of the county privilege license by city population, plus the county's half share
- Code of Ala. §32-8-34, Designated Agents — every Dealer is a Designated Agent of the department, and the $50,000 dealer bond serves in place of the Designated Agent bond
- Code of Ala. §30-3-194, Social Security numbers on licenses — the statewide law behind the SSN field on the application
- Ala. Admin. Code 810-5-12-.07, Wholesale Auction License (PDF) — the $125 fee, the bond, and the ID copies the auction license requires
- Ala. Admin. Code 810-5-12-.03, off-site sales (PDF) — the 3 events a year, 10 days each, and the county limit on used-vehicle sales
- Are all dealers required to be a Designated Agent? (ALDOR FAQ) — “All dealers are required to become a designated agent”
- Is the Designated Agent training required for new dealers? (ALDOR FAQ) — the online training every Designated Agent completes; no hours or price published
- LLC members to add or remove (ALDOR FAQ) — members are updated on the Officers page at renewal
