Illinois Dealers and Auto Industry

The Illinois Secretary of State regulates vehicle dealers, regulating all paperwork requirements, eligibility requirements to sell cars and signage requirements.  There are strict guidelines that the dealer must follow and a wealth of information that the dealers must be aware of.  4DMV.com brings everything you need to know in this easy to follow guide.

Dealer Licensing Section

In Illinois, the Secretary of State’s Customer Services/Dealer Licensing Section of the Vehicle Services division is responsible for processing all applications and forms which relate to vehicle dealers.  The SOS DL provides other dealer related services such as:

  • Dealer licensing compliance audits
  • Remitter licenses and related agent ID cards
  • Certificates of Authority for dealers, auctioneers, scrap metal processors, repair shops and rebuilders
  • Dealer plates
  • Dealer, in transit repossession, and manufacturer applications
Applying for Your Dealer’s License

In order to apply for your Illinois Dealer’s License you will need to complete the Dealer License Application form.

The state also provides dealers with all the facts and information they need to know through their state published Instructions for Dealer License.

In order to become a licensed auto dealer of new or used cars in Illinois you will need to:

  • Secure a $20,000 certificate of deposit or bond
  • Provide a certificate of insurance that shows you carry a minimum of, $50,000 for property damage, $100,000 for bodily injury and $300,000 for each accident.  The name of the dealership should be the insured on the policy
  • Proof that your corporation is in good standing with the SOS Department of Business Services
  • If you are operating your dealership on a leased lot, then copy of the lease
  • Validity that your dealership is properly zoned
  • If you are a new vehicle dealer you must provide a copy of your manufacturer’s franchise agreement
  • If your dealership also performs repairs on vehicles, then you must provide your hazardous waste generator number which is issued by the state’s Environmental Protection Agency
  • All applicable fees
State Required  Background Check

Each dealer in the state of Illinois that is a new applicant must obtain a criminal background check.  Once the applicant passes the background check, they will then be required to be fingerprinted.

All background checks must be performed through FBI approved companies which are:

  • Sylvan/Identix Fingerprinting Centers
  • (800) 377-2080
  • Art's Investigations
  • (312) 932-9999
  • Verify
  • (217) 753-1190
Tax Collection Requirements

The sale of each vehicle sold includes sales tax, which the dealership is responsible for meeting the requirements.  Illinois dealers must complete the licensing process offered by the Illinois Department of Revenue office.  The state offers a guide which spells out all the requirements that the dealer is responsible for as well as covering leasing and trade in transaction taxes which can be found at Illinois Aircraft / Watercraft and Vehicle Tax Information Guide.

Dealer Licensing Fees

The dealer is responsible for fees which include startup fees and annual fees and are as follows:

$1,000 for your Authority Certification fee which is paid annually.  The fee will be reduced to $500 if paid during the dates of June 15th to December 31st.

$100 Supplemental Authority Certification for each additional location for new cars and for used cars there will be an annual fee of $50.  The fee will be reduced to half the amounts if paid during the dates of June 15th to December 31st.

Dealer license will expire annually on December 31st.

Dealer Plate Fees

The dealers are also responsible for the applicable dealer plate fees which are as follows:

  • Annual fee for master plates:  $45
  • Duplicate plate fee:  $13
  • Additional duplicates fee:  $78 (half this amount if paid after June 15)
  • Additional Identification cards:  $3
  • Additional Information
For more information regarding regulations for vehicle dealers, the state publishes a pamphlet that includes some of the various laws for dealers which can be downloaded for free at  Regulations for  Vehicle Dealers.

You can also contact the SOS Vehicle Services Department for more information at:

o    Vehicle Services Department

o    Dealer Licensing Section

o    501 S. Second St., Room 069

o    Springfield, IL 62756

o    (217) 782-7817

Dealer Salespersons

In order to become a dealer salesperson the only requirement is that you love your work!  The state of Illinois does not require any salesperson to be licensed.

Questions:

If you are interested in selling vehicle and have any questions or concerns you can contact the Vehicle Services Department at:

  • 217-782-7817
  • Dealer Licensing Section
  • 501 South 2nd Street, Room 069
  • Springfield, IL  62756
The state also provides a handy guide on the Regulations for Vehicle Dealers.

Dealer Related Information

The state of Illinois enforces what is called the Lemon Law, which most dealers must comply to.  The Lemon Law is designed to protect consumers from defective vehicles.

The state of Illinois requires all dealers who wish to obtain their license must attest that no major owner, shareholder holding 10% or more of the company or partner has violated any of the below statutes more than one time during the past three years.

  • The Retailers' Occupation Tax Act
  • Section 21 – 2 of the Criminal Code of 1961, Criminal Trespass to Vehicles
  • The Offenses against Registration and Certificates of Title Laws of the Illinois Vehicle Code
  • The Anti-Theft Laws of the Illinois Vehicle Code
  • The Dealers, Transporters, Wreckers and Rebuilders Laws of the Illinois Vehicle Code
  • The Certificate of Title Laws of the Illinois Vehicle Code
Dealers must also not have more than two of the following violations in the timeframe of a year:

  • The Consumer Fraud Act
  • Part 8 of Article XII of the Code of Civil Procedure
  • The Illinois Wage Assignment Act
  • The Interest Act
  • The Motor Vehicle Retail Installment Sales Act
  • The Retail Installment Sales Act
  • The Consumer Installment Loan Act
  • The Consumer Finance Act
  • The Consumer Fraud Act
New and Used Car Dealers

While there are many of the same requirements for both new and used dealers in the state of Illinois, there are some differences, with one of the biggest being that dealers who are selling used vehicles are responsible for additional paperwork in many situations.

To find a list of the statues that pertain to used vehicle dealer’s visit Illinois Compiled Statutes.

When changes in the law pertaining to dealers occur or when application requires it, the Dealers and Remitters Bulletin is issued.

Dealer Publications

The Dealers and Remitters Bulletin is required reading for all dealers.

There are dozens of forms which can be used by the dealer found on the Dealer and Remitter Forms page.

To obtain the Vehicle Tax Information Guide visit Illinois Aircraft/Watercraft and Vehicle Tax Information Guide

For other dealer related tax documents visitAircraft, Vehicles, and Watercraft Sales & Use Tax Forms

The licensing process for dealers to become licensed is extensive.  The SOS office does not currently publish a Dealer’s Handbook, but they do provide a regular newsletter which can be found at Dealers and Remitters Bulletin.

For other useful information the state published the Regulations for Vehicle Dealers pamphlet

For all questions specific to selling vehicles in Illinois contact:

o    Vehicle Services Department

o    Dealer Licensing Section

o    501 South 2nd Street, Room 069

o    Springfield, IL 62756

o    (217) 782-7817

Another great source of information is the Illinois Independent Automobile Dealers Associations