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Eligibility Requirements for Obtaining Dealer Plates in New York

March 25, 2025

Obtaining dealer plates in New York is a crucial step for licensed auto dealers, enabling them to operate legally and efficiently within the state. Dealer plates allow for the operation of vehicles owned or controlled by the dealer for purposes such as demonstration, transport, and sale. However, there are specific eligibility requirements and regulations that must be adhered to in order to qualify for these plates. This report outlines the comprehensive eligibility requirements for obtaining dealer plates in New York, including the necessary documentation, fees, and compliance with state regulations.

1. Understanding Dealer Plates

Dealer plates are special registration plates issued to licensed motor vehicle dealers in New York. These plates can be used for vehicles that are owned or controlled by the dealer and are held for sale or demonstration purposes. The use of dealer plates is governed by the New York State Vehicle and Traffic Law, specifically under Section 78.21, which outlines the conditions under which these plates can be utilized.

Types of Dealer Plates

In New York, dealer plates can be issued for various types of dealers, including: - Retail Motor Vehicle Dealers: These dealers sell new or used vehicles directly to consumers. - Wholesale Dealers: These dealers sell vehicles to other dealers rather than directly to consumers. - Specialty Dealers: This category includes dealers of motorcycles, trailers, and other specific vehicle types.

2. Eligibility Criteria

To be eligible for dealer plates, applicants must meet several requirements:

2.1. Licensing Requirements

  1. Valid Dealer License: The applicant must hold a valid motor vehicle dealer license issued by the New York State Department of Motor Vehicles (DMV). This license is mandatory for anyone intending to sell more than five vehicles in a calendar year.

  2. Business Registration: The dealership must be properly registered as a business entity in New York. This includes obtaining a Federal Employee Identification Number (FEIN) and registering with the New York State Department of State.

2.2. Physical Location Requirements

  1. Zoned Location: The dealership must operate from a location that is zoned for commercial use. This means that the property must comply with local zoning laws that permit the sale of motor vehicles.

  2. Signage: The dealership must display a sign that meets specific criteria set by the DMV. The sign must:

  3. Have a red background with white lettering.
  4. Measure at least 3 feet wide by 2 feet tall.
  5. Display the message “REGISTERED (Facility Number) STATE OF NEW YORK MOTOR VEHICLE DEALER” in two-inch block lettering.
  6. Be permanently mounted and visible from the nearest street or highway.

2.3. Documentation Requirements

  1. Application Submission: Dealers must submit an Original Facility Application (VS-1) along with the required documentation, which includes:
  2. Proof of ownership or lease of the business location.
  3. A copy of the Sales Tax Certificate of Authority.
  4. Proof of workers’ compensation insurance.

  5. A signed and sealed surety bond.

  6. Dealer Starter Kit: Dealers are required to purchase a dealer starter kit, which includes essential documents such as a book of registry, bills of sale, odometer statements, and warranty forms. This kit is necessary for compliance with state regulations.

2.4. Financial Requirements

  1. Surety Bond: A dealer must obtain a surety bond as part of the licensing process. The bond amount varies based on the number of vehicles sold annually:
  2. $20,000 bond for dealers selling 50 or fewer used vehicles per year.
  3. $100,000 bond for dealers selling more than 50 used vehicles per year.
  4. $50,000 bond for dealers selling new vehicles.

  5. No bond requirement for dealers selling trailers, motorcycles, and similar vehicles.

  6. Fees: The following fees are associated with obtaining dealer plates:

  7. Non-refundable application fee: $37.50
  8. Registration fee: $450
  9. Retail Certificate of Sale (Form VS-114I) Fee: $260.

2.5. Compliance and Good Standing

  1. Good Standing with DMV: Dealers must be in good standing with the DMV, meaning they should not have any violations, open investigations, or unpaid civil penalties. This ensures that the dealer is compliant with state regulations and maintains a reputable business practice.

  2. Inspection Requirements: After submitting the application, the DMV will conduct an on-site investigation of the dealership location. The Automotive Facilities Inspector (AFI) will verify compliance with all requirements, including the presence of the dealer starter kit, proper signage, and the physical condition of the business premises.

3. Renewal of Dealer Plates

Dealer licenses and plates must be renewed every two years. The renewal process can be completed online or by mail, and it is advisable to initiate the renewal up to 60 days in advance or within six months after the expiration date. During the renewal process, dealers must also renew their surety bond.

4. Conclusion

In summary, obtaining dealer plates in New York requires adherence to specific eligibility criteria, including valid licensing, proper business registration, compliance with zoning laws, and submission of necessary documentation. The financial obligations, including the surety bond and associated fees, are also critical components of the process. By fulfilling these requirements, dealers can operate legally and effectively within the state, ensuring compliance with New York's stringent automotive regulations.

For those considering entering the automotive dealership business in New York, understanding these requirements is essential for a successful and compliant operation.

References

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