Alabama Dealer License

Alabama Dealers Licenses are granted by the Alabama Department of Revenue in Montgomery, Alabama. Beginning August 1, 2012 you must apply for an Alabama Dealer License electronically. The Alabama Department of Revenue no longer accepts mailed dealer license applications, your electronic dealer application can be easily completed by following the steps below or play the video for step by step Alabama Dealer License Instructions.

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Dealer License


Alabama Dealer License Steps

The first step in obtaining an Alabama Dealer License is to file an electronic Alabama Dealer License application at Just select Register to begin the process.

For instructions on how to properly complete the electronic Alabama Dealer License Application click here:

If you have questions about the Alabama Dealer License Application process you may call the Alabama Motor Vehicle Division at 334-353-7827 or email the Alabama Motor Vehicle Division at All Alabama Dealer Licenses expire on September 30th of every year. You must reapply for your Alabama Dealer License every year.

When filing out your dealer license application you must use the legal name of the business, address of the Alabama dealership location, you must declare whether you business is an individual, partnership, limited liability corporation, limited liability partnership, or a corporation. Be sure to seek legal or tax advice before you decide what type of business organization you are forming because there are different legal and tax ramifications depending on your type of business structure. You may also contact the Alabama Secretary of State’s Office at 334-242-5324 to answer questions about starting an Alabama business. You will need to choose what type of Alabama Dealer License you are applying for, whether it is a used motor vehicle license, a wholesalers license, a motor vehicle reconditioner license, or a motor vehicle dealer license.

You will need to include the email address of the person completing the application. All correspondence from the Alabama Department of Revenue will be sent to this email address.
When you have finished the online application for your Alabama Dealer License, you will be charged a $10 fee for you initial location and a $5 fee for any supplemental locations. You must include the online payment receipt when mail all of your documentation to the Alabama Department of Revenue. Be sure to mail all of your Alabama Dealer License application documentation to the Alabama Department of Revenue in one big envelope. We will call this application the Alabama Dealer Application Packet.

Federal Tax Identification Number

If you are filing any business organization other than an individual, you will need to apply for a free Federal Tax Identification Number. You can apply for your Federal Tax Identification number by clicking here. If you are starting an Alabama dealership as an individual, you will not need to submit a Federal Tax Identification number to the State of Alabama.

State of Alabama Sales Tax Number

If you are applying for a new Alabama motor vehicle license or used Alabama motor vehicle license, you will need a State of Alabama sales tax number. You can apply for your Alabama Sales Tax Number by clicking here: You may also complete the Combined Registration form by clicking here: or calling the Alabama Business Registration Unit at 334-242-1584.

Alabama Dealer Garage Insurance

The Alabama Department of Revenue requires you to obtain Dealer Garage Insurance policy before you are granted an Alabama Dealers license. You will need to obtain this policy from a licensed Alabama insurance agent. Some Alabama insurance agents do not sell these policies but I would advise contacting your insurance agent for a quote, if he or she does not sell dealer policies, ask them for a reputable agent that does. The Alabama Department of Revenue requires $25,000 bodily injury/accident, $50,000 combined bodily injury/accident, and $25,000 property damage/accident or a combined single limit of $75,000 per accident. You must include a copy of your proof of dealer insurance in your Alabama Dealer License Application Packet. You may obtain your Alabama dealer insurance by clicking here.

Alabama Dealer Surety Bond

The Alabama Department of Revenue requires all dealer license applicants to apply for a Dealer Surety Bond. New automobile dealers must file a dealer surety bond in the amount of $25,000 and used Alabama automobile dealers must file a bond in the amount of $10,000. You can obtain a dealer bond from most insurance agents or a bonding company. The price of your dealer surety bond is dependent on your credit score. If you have good credit a $25,000 dealer surety bond will cost about $200 per year. If you have a few blemishes on your credit score, your dealer surety bond price can increase substancially. Be sure to include your original Alabama dealer surety bond in your Alabama Dealer License Application Packet. If your Alabama Dealer Bond is ever cancelled your dealer license will be revoked by the State of Alabama.

Obtain an Alabama Privilege License

The State of Alabama wants to know of every business that is operating within the Alabama State limits, therefore the State of Alabama requires each business to obtain an Alabama Privilege License. The Alabama Privilege license can be obtained by the Probate Judge or License Commissioner in the county where the business operates. Be sure to check with the city you are operating your dealership in, you may be required to obtain a city business license as well. You may check with your County License Commissioner to find out your exact fees, which are based on a number of factors, including population of your area. To find out more about an Alabama Privledge License click here:

Business Photograph

You must include a photograph of your business in your Alabama Dealer License Application Packet. The Alabama Department of Revenue wants to know what your business location looks like. They will be placing the photograph of your business in your file so be sure it is less 8X10 inches or smaller. You may instead submit an electronic version of your picture, just make sure it is a clear picture and placed on a CD ROM that is enclosed in your Alabama Dealer License Application packet. The business photograph tends to be the most forgotten part of the dealer application packet, so be sure not to forget it, or any other documents that are required to be sent in. If you forget one document you will not get your Alabama Dealer License in a timely manor and can delay your dealer licensing process from 5 to 7 weeks.  If you have more than one location you must include a photograph for each location. Be sure to include all documentation in your Alabama Dealer License Application Packet!

Business Sign

The Alabama Department of Revenue requires you to have a business sign at your Alabama dealership location. You must have your business name on the sign. If your business name does not identify you as a motor vehicle dealer, you must have an additional sign that states new motor vehicle dealer or used motor vehicle dealer. The sign’s letters must be six inches or larger to qualify for approval of your Alabama dealers license. The Alabama Department of Revenue requires the sign to be viewable to the nearest roadway or from a distance of fifty yards, whichever is greater. The sign may be attatched to the front of the building or may be mounted in the vehicle display area. If the letters of your dealership sign are only 4 or 5 inches in height, they will be rejected by the Alabama Department of Revenue. Be sure the letters on your Alabama dealer sign are 6 inches or larger.

You can mail your orginal dealer surety bond, copy of dealer insurance, all printed documents from the electronic dealer application process, and Secure Power of Attorney to:

Alabama Department of Revenue
Motor Vehice Division-Dealer Licenses
PO Box 327643
Montgomery, Alabama 36132-7643

You may also hand deliver your application receipts and supporting documents to this location, however you must still apply for your Alabama Dealer License and pay all fees through the Alabama Dealer License website.

The Alabama Department of Revenue will notify you by email or mail when your application for your Alabama Dealer License is approved. If you have further questions, you can email, call 334-353-7827, or click on

Alabama Dealer License Forms

Electronic Dealer License Application:
Dealer Licesne Application Instructions:

Click here for a free Alabama Dealer Insurance Quote!

Good Luck In Obtaining Your Alabama Dealer License!

We are here to help you maintain your Dealership Compliance!

Dealer License  

Delus Johnson-Lead Instructor
Automobile Dealer Training Association