DL
Dealer License by State
Illinois dealer license overview
Unofficial summary – verify with state regulator

Illinois Motor Vehicle Dealer License Requirements – 2025 Overview

To operate as a motor vehicle dealer in Illinois you must be licensed through the Illinois Secretary of State’s Vehicle Services Department. This summary highlights key requirements for typical used and new dealers.

Important: This is an unofficial summary, not legal or compliance advice. Statutes, rules, and forms change. Always confirm details with the official Illinois Secretary of State – Vehicle Services Department resources before you apply or make business decisions.

1. Who regulates dealers in Illinois?

Dealer licensing in Illinois is handled by the Illinois Secretary of State (SOS) – Vehicle Services Department, which administers both new and used dealer licenses as well as dealer training.

  • Regulator: Illinois Secretary of State – Vehicle Services / Dealer Licensing
  • Dealer & remitter portal: Dealers and Remitters – ilsos.gov
  • Instruction packet: often published as form VSD‑659 / VSD‑324 for dealer applications and instructions.

2. Illinois dealer license types

Common license types for auto retailers include:

  • New vehicle dealer – franchised dealers selling new vehicles.
  • Used vehicle dealer – independent dealers selling used vehicles at retail.
  • Remittance agent and other specialized categories.

First‑time used vehicle dealer applicants must complete state‑approved dealer training before the license can be issued.

3. Illinois business location and facility standards

Illinois requires an established place of business suitable for the type of dealer license requested.

  • A permanent office with desk, phone, and secure storage for records.
  • Display space for multiple vehicles offered for sale.
  • A permanent, clearly visible business sign bearing the dealership name.
  • Evidence of zoning approval from the municipality or county.
  • Books and records must be available for inspection and kept for at least three years.

4. Entity, taxes, dealer training, and bond

4.1 Business entity and tax registration

  • Organize your entity and register with the Illinois Secretary of State (for corporations/LLCs).
  • Obtain your FEIN and register under the Retailers’ Occupation Tax Act with the Illinois Department of Revenue.

4.2 Mandatory dealer training

First‑time used car dealer license applicants must attend an eight‑hour pre‑licensing training course provided by the Secretary of State’s office. Proof of completion must accompany the license application.

4.3 Surety bond and insurance

  • Illinois used vehicle dealers are generally required to carry a $50,000 surety bond (amount can vary by license type and current statute).
  • The dealership must also maintain appropriate liability insurance for operations and dealer plates.

5. Illinois dealer license application steps

  1. Form your entity and complete all state tax registrations.
  2. Secure a compliant dealership location and obtain zoning approval.
  3. Attend the required 8‑hour dealer training (used dealers).
  4. Purchase the required dealer surety bond and liability insurance.
  5. Complete the Illinois dealer application (VSD‑324 or current equivalent) and gather all required supporting documents.
  6. Submit the application, fees, bond, and proof of training to the Illinois Secretary of State.

6. After approval: ongoing Illinois compliance

  • Renew your dealer license and bond as required by SOS.
  • Maintain books and records for at least three years and make them available upon request.
  • Follow state laws for title transfer, temporary registration permits, and advertising.
  • Notify the Secretary of State of changes in ownership, location, or business structure.