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How To Get Your Connecticut Auto Dealer License

How To Get Your Connecticut Auto Dealer License

Connecticut requires a number of different licensing options in the motor vehicle industry. This short article is going to focus on bringing clarity to the process of submitting your auto dealer license application so it gets approved the first time.

Expect to understand:

  • The breakdown of the application sections and what's required
  • The details of your dealership location and legal requirements
  • The surety bond requirement and how to save money purchasing your bond
  • A breakdown of all the fees and costs to get your application approved

Before getting into each section of the application, here's a quick overview of the types of dealer licenses in Connecticut.

Types of Connecticut Auto Dealer Licenses

There are 5 main Connecticut auto dealer license classifications which include new and used vehicle dealers, general and limited repairer licenses, leaser license, and recycler license.

  • New vehicle dealer with a franchise agreement with a manufacturer
  • Used vehicle dealer
  • Repairer license responsible only for the repair and maintenance of vehicles. No retail sales of vehicles
  • Leaser license is a dealer who leases vehicles

Repairers are further broken down into:

  • General repairers offer a full set of repair services like overhauling, adjusting, assembling, or disassembling
  • Limited repairers offer a "limited" set of repair services like tires, upholstering, welding, or machine work on parts

Each license type has a similar application process but with different requirements. Again, this post will focus on new and user dealers but the details for repairers will also be covered.

1. Individuals Required To Be On The Application

The application will require the personal identification and address of all owners (or yourself if you're the sole owner), partners, and officers or members.

Auto Dealer Experience Review

Each of these individuals will have their experience verified by the Connecticut DMV. If relevant experience is from an out-of-state employer or business, an official letter, on official business letterhead is required to provide:

  • Time employed
  • The position or positions held
  • All specific and relevant responsibilities performed

If relevant experience is from an in-state business that is no longer in business, the DMV will accept a letter from the applicant outlining the same details as if the business were out-of-state.

Criminal Background Check

Each individual listed on the application will have to enroll in a fingerprint background check provided through the Department of Emergency Services and Public Protection.

Only one individual is required to sign the final application.

2. Business Entity Requirements

If you're part of a business entity like an LLC or Corporation that is getting licensed, there is additional paperwork you must include with your application.

For both LLCs and Corporations:

  • Certificate of Existence from the Connecticut Secretary of State
  • Corporate/Company Agent for Service or Process (obtained from the Secretary of State as well)

Additional requirements only for LLCs:

  • Copy of the LLC operating agreement
  • Copy of Articles of Organization and all recorded amendments

3. Dealership And Business Location Requirements

Dealerships have location requirements including passing the minimum requirements to pass inspection, following all the dealership sign requirements, providing a dealership site drawing, even drainage requirements.

The dealership may not be the only business location as you'll see in a minute.

For a new, used, and both repairer licenses, the location where vehicles are sold or repaired will have to be inspected and approved by the:

  • DMV commissioner
  • Municipal authorities
  • The municipal police

Location Minimum Requirements To Pass Inspection

General and Limited Repairers

  • Repairers need a building large enough to hold one vehicle for repairs
  • A large enough office space suitable to conduct business
  • Dedicated storage space for parts and accessories

New and Used Auto Dealers

  • A display area for the vehicles being sold (the size is not specified by the Connecticut DMV)
  • A repair department capable of accommodating at least 2 vehicles for the purpose of repair and inspection
  • A large enough business office
  • Dedicated storage space for parts and accessories for the use of the repair department

These minimum requirements are typically required for each dealership/repairer location, but they can be waived if the additional location is adjacent to the primary location.

However, the adjacent location will require its own application process including insurance, surety bond, dealer plates, and associated application fees.

Dealership Sign Requirements

Unlike many states that have specific size requirements, Connecticut only requires specific signs to be displayed.

A photo of each of these signs is required with the application.

Photo of each required sign New Dealer Used Dealer Repairer
Lemon Law in repair and service areas Required Required Not
VIN etching cost sign Required Not Not
Dealer Conveyance fee sign Required Required Not
Customer Rights sign Required Required Required
Labor and Storage Price sign Required Required Required

Additional Dealership Signs Required by New and Used Dealers

  • Business hours on the primary customer entry door
  • Waste oil tank identification if applicable
  • Front or building showing service bays
  • Tools and equipment signage
  • Business office signage
  • Floor drains in a repair service if applicable

Dealership Location Site Drawing

A detailed drawing of the dealership with measurements is required. The Connecticut DMV stresses the drawing should be on an 8 by 11.5 piece of paper.

Here are the requirements for the drawing:

  • Outline of the property, shaded to identify the licensed area with accurate dimensions
  • The point of access to public roads at the highway line and the gutter line
  • All rights of way into and through the property
  • All buildings on the property with accurate dimensions of the size
  • Every door to every structure
  • The structures used for parts and storage
  • The business office location
  • The display area location
  • If you have a waste oil retention facility with the minimum 250 gallon tank, this needs to be clearly identified
  • Gas pumps on the property if any
  • All vehicle service floor drains and the location of the oil separator tank if discharge is made to a sewer or holding tank
  • Every storm drain
  • If applicable, the spray booth with any exhaust stack or exhaust point with the minimum distance to the nearly property line
  • All revisions made on this drawing must be signed and dated by the individual who signs the application

4. The Auto Dealer Surety Bond Requirement

All auto dealer classifications except recyclers are required to purchase a surety bond or auto dealer bond before a license can be issued. This is an insurance contract that ensures you'll conduct business with your customers in a fair and ethical way.

A surety bond is a type of insurance contract purchased by the licensed dealer and required by the Connecticut DMV to hold licensed auto dealers accountable for providing honest and ethical business services to their customers.

One of the responsibilities of the Connecticut DMV is to protect the public from dealerships or repairs who engage in fraudulent business activities to increase profits or steal from their customer base.

It's unfortunate, but there are dealerships who will:

  • Falsify a title
  • Improperly transfer a title
  • Lie about the history of a vehicle
  • Misrepresent the odometer readings
  • Steal from deposits or down payments
  • Fail to report and pay sales tax on sold vehicles

These are the purposeful actions a surety bond protects a dealer's customer and the Connecticut Department of Revenue against.

If a dealer is found guilty of financially harming a customer or the state on purpose, the surety bond provides financial protection up to the amount of the bond.

How Much Does an Auto Dealer Surety Bond Cost?

The Connecticut DMV requires each license to provide a surety bond with the following amount:

Dealer License Requires an Auto Dealer Surety Bond Bond Amount
New Vehicle Dealers Yes $60,000
Use Vehicle Dealers Yes $60,000
Vehicle Leasing Companies Yes $15,000
General Repairer Shops Yes $25,000
Limited Repairer Shops Yes $10,000
Recycler (Junk Yard) No --

This amount is the maximum financial protection available to customers and the state.

The price of the surety bond depends on the type of license you're obtaining.

New and Used Auto Dealer License Surety Bond Cost

For new and used dealer licenses, the cost of the surety bond is determined by a rate quoted from a surety.

You can learn the details about the surety bond agreement, but a surety is the insurance company that issues the surety bond.

The rate quoted by the surety will depend on several factors including:

  • Personal credit
  • Business and industry experience
  • Any past claims on auto dealer bonds if you've had past dealerships

The rate (a small percentage) multiplied by the bond amount will be the price you pay.

General and Limited Repairer License Surety Bond Cost

We've already secured low fixed prices for the repairer surety bond and no credit check is required.

This means you can instantly purchase your bond today and have it issued to you within one business day.

The pricing is as follows:

Dealer License Bond Amount Get Pricing Today
New Vehicle Dealers $60,000 Click for FREE Quote
Use Vehicle Dealers $60,000 Click for FREE Quote
Vehicle Leasing Companies $15,000 Click for FREE Quote
General Repairer Shops $25,000 Click for FREE Quote
Limited Repairer Shops $10,000 Click for FREE Quote

If you prefer to speak with a bond specialist to get any lingering questions answered, call 1-800-608-9950.

Why Use Surety Bonds Direct To Purchase Your Bond?

Surety Bonds Direct is a specialized surety agency and we'll help you get the lowest price by working with our network of sureties who specialist in auto dealer surety bonds.

While each surety uses similar factors to determine a rate, they will determine their rate based on their own underwriting guidelines and rates filed with the Connecticut Department of Insurance.

This means rates can vary wildly and that means prices can vary by hundreds of dollars.

Surety Bonds Direct is a specialized surety agency that can shop for the lowest possible rate and get you the lowest price.

Plus the quotes we provide cost you nothing and you have zero obligation to purchase from us.

There's zero risk on your end. Let us prove to you that we can get you the best pricing.

5. Dealership Plate Requests

If you choose to request dealership plates, here are the rules:

  • Used dealers, general, and limited repairers can required up to 3 plates for the initial request
  • A Financial Responsibility Insurance Certificate is required even if you decide to require zero plates
  • If you deal with commercial vehicles, dealer plates are called SX plates

6. Proof Of Business Conduct

Finally, depending on the type of license you're applying for, you must provide completed forms to prove proper use and business conduct.

New and Use Dealer Licenses

  • Sales orders
  • Delivery sales invoices
  • Federal odometer statements
  • Buyers guide stickers
  • Estimate order and provisions for documenting oral authorization
  • Waiver of estimates
  • Loan agreements (dealer plates)
  • Repair orders
  • Supplemental ID cards for plate use
  • Inspections form of vehicles (vehicle inspection form) being sold (K 208)

Repairer Licenses

  • Repair orders
  • Waiver of estimates
  • Loan agreements (repairer plates)
  • Supplemental ID cards for plates use
  • Estimate order and provisions for documenting oral authorization
  • If towing... tow invoices

Sales Tax Permit (K-7)

This allows for the collection of sales tax on sold vehicles. You can obtain this form from the Department of Revenue.

Make sure the address on the sales tax permit matches the business address on this application.

Optional - Waste Oil Disposal Certificate Letter

If you are going to be a waste oil transporter, you will need to be approved by the CT Department of Environmental Protection.

  • This letter will list the name and address of the repair shop and/or dealership.
  • The repair/dealership must have an oil retention tank with a minimum capacity of 250 gallons
  • The applicant can request an exemption pursuant to 14-63-27

OPTIONAL - Vehicle Storage Rates Requirement Application

If you're going to store vehicles, not related to selling vehicles, a Vehicle Storage Rates Requirement application form must be on file.

This application includes:

  • Operating hours of storage
  • Type of security
  • Number of vehicles that most likely will be stored
  • Whether a wrecker is operated or if the vehicles will be towed into the location

Repairers Only : (Dealers Optional) - Certificate of Filing Etching of VIN

New and used dealers have the option to provide VIN etching service.

If the dealer chooses to provide this service, a Certificate of Filing Etching must be on file with the DMV and must be listed on each purchase order.

Recap of All Fees and Costs To Submit Your Connecticut Dealer License Application

Here is a full recap of all the costs and fees required before you can submit your application.

Non refundable $140 application fee for a 2 year license term.

Transaction Fee
New Dealer License $700
Used Dealer License $560
General or Limited Repairer License $340

 

Transaction Fee
Dealer or Repairer Plate $140 per plate
SX Commercial Plate $145 per plate
Safety Plate $5.00 per plate

Finally the auto dealer surety bond and the Financial Responsibility Insurance certificate are the variable costs.

Let Surety Bonds Direct Help You Pay Less For Your Auto Dealer Surety Bond

I hope this article helped bring some clarity to the steps and requirements.

While Connecticut has decent documents to help you get through this process, there are plenty of questions that popup along the way.

When you're ready to purchase your auto dealer bond, let Surety Bonds Direct help you find the lowest possible price.

Remember, providing you with a price quote costs you nothing and there's zero obligation to purchase.

Get your pricing today so you're able to make the best decision when it comes time to purchase.

If you have any questions about the surety bond requirement, call us at 1-800-608-9950.

Dealer License Bond Amount Get Pricing Today
New Vehicle Dealers $60,000

Get a FREE Quote

Use Vehicle Dealers $60,000

Get a FREE Quote

Vehicle Leasing Companies $15,000

Get a FREE Quote

General Repairer Shops $25,000

Get a FREE Quote

Limited Repairer Shops $10,000

Get a FREE Quote


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1-800-608-9950

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