Florida Salvage Dealer License: Bond, Training, and Fees

To get a Florida salvage dealer license, you need a qualifying non-residential business location, a $25,000 surety bond, a pre-licensing training certificate dated within the last six months, fingerprint-based background checks on every owner and officer, a complete application on FLHSMV Form 86056 with a $300 fee, and a passing on-site inspection by a state compliance examiner. The license is issued under Florida Statutes Section 320.27 by the Florida Department of Highway Safety and Motor Vehicles (FLHSMV), which codes it with an “SD” prefix.¹

Who Needs the Salvage Dealer License

Florida defines a salvage motor vehicle dealer as any person in the business of buying salvaged or wrecked motor vehicles to resell the vehicles themselves or their parts.¹ You need the license before you conduct a single transaction, not after you have built up volume.

One boundary matters up front. The SD license covers reselling vehicles and parts in their salvaged condition. If your plan is to rebuild salvage vehicles and sell them at retail or wholesale for road use, that activity falls under the independent motor vehicle dealer classification, and you will need that license in addition to the SD license.

Business Location Standards

Your location has to be a permanent, non-residential structure with an office that can handle daily operations and store your records. The site must have enough open space to store every vehicle you have for sale, and salvage dealing has to be the principal business there.¹ A home address will not qualify.

Zoning is a separate hurdle from the state application. Salvage operations usually require commercial or industrial zoning, and many Florida municipalities impose additional conditions on auto salvage yards, such as fencing or screening. A permanent sign showing the dealership name must be installed and visible from the nearest public road. Confirm the local requirements before you sign a lease, because a zoning denial can sink an otherwise complete application.

The $25,000 Surety Bond

Every salvage dealer must post a $25,000 surety bond, or an irrevocable letter of credit for the same amount, before FLHSMV will issue the license.¹ The bond protects consumers and the state against a dealer’s noncompliance. It runs on the same term as the license, which expires April 30 each year, and it must be renewed on that cycle.

Salvage dealers get a notable cost break on insurance. Florida exempts them from the garage liability and personal injury protection requirements that apply to other dealer types, as long as the vehicles on the lot cannot legally be driven on public roads.¹ Other dealer categories must carry at least $25,000 in combined single-limit liability coverage plus $10,000 in personal injury protection. If you hold an SD license and an independent dealer license, the insurance obligation returns on the independent dealer side.

Pre-Licensing Training

You, or an employee you designate, must complete a training seminar at a state-licensed motor vehicle dealer training school before the application goes in. The certificate of completion has to be dated within six months of your submission.¹ The seminar is capped at eight hours of FLHSMV-required content, though schools can bolt on additional hours covering other agencies’ rules.

There is one exemption. If you held a valid Florida motor vehicle dealer license continuously within the past two years and remain in good standing, you can skip the pre-licensing course.

Application Package and Background Check

The application form is FLHSMV Form 86056, which asks for your business name, physical address, ownership structure, and the names and addresses of every owner, partner, or corporate officer.² Along with the form, you need to assemble:

Articles of Incorporation or Articles of Organization filed with the Florida Division of Corporations, plus corporate minutes electing directors where applicable.
A copy of the property lease, or the deed if you own the location.
Your Federal Employer Identification Number (FEIN).
Your sales tax registration number from the Florida Department of Revenue.
The original $25,000 surety bond, executed on the state’s required form.
Proof of completing the pre-licensing seminar within the past six months.
Your receipt for electronic fingerprints submitted to the Florida Department of Law Enforcement.

Every owner, partner, and corporate officer has to be electronically fingerprinted through an FDLE-approved service provider, which submits the prints directly to FDLE and gives you the receipt that goes into your application package.³ The applicant pays the fingerprint processing cost. A felony conviction is grounds for the department to deny the license, so anyone with a criminal history should address that question before spending money on bonds, leases, and training.¹

Fees, Submission, and Facility Inspection

The initial application fee is $300. You can extend the first license period to two years by adding $75, for a total of $375 at submission.¹ The completed package goes to the FLHSMV Bureau of Dealer Services regional office that covers the county where your business will operate.⁴

Once the paperwork is in and reviewed, a compliance examiner schedules an on-site inspection. The examiner confirms the location matches the application: a non-residential office, enough storage for your vehicles, proper signage, and the ability to keep records on site. No inspection pass, no license. This is where unfinished applicants lose weeks. If the sign is not up or the office is not set up on inspection day, the visit gets rescheduled.

What You Will Have to Do Once Licensed

Several ongoing obligations begin the day the license is issued, and they belong in your startup budget rather than coming as a surprise.

Record Keeping

Florida requires licensed motor vehicle dealers to keep records of every purchase, sale, or exchange for five years, available for FLHSMV inspection at all reasonable hours.⁵ If you use the state’s Electronic Filing System and scan documents into ORION, the physical originals must be shredded or stamped “VOID” within five business days of approval.

NMVTIS Reporting

Federal law requires salvage dealers to report every vehicle acquired to the National Motor Vehicle Title Information System each month. The report includes the VIN, acquisition date, who you got it from, and whether the vehicle was crushed, sold, or exported.⁶ Missed reporting carries a civil penalty of up to $1,000 per violation.⁷ If you already report inventory to the state and the state passes that data to NMVTIS, separate federal filing is not required. Confirm Florida’s arrangement with FLHSMV before deciding you are covered.

Stormwater Permit

The Florida Department of Environmental Protection classifies automobile salvage yards under Sector M of the Multi-Sector Generic Permit for industrial stormwater discharges. If your yard has the potential to discharge stormwater to surface waters or into a municipal storm sewer system, you likely need coverage under that permit.⁸ You file a Notice of Intent with the DEP’s NPDES Stormwater Notices Center and develop a stormwater pollution prevention plan for the site. This has nothing to do with your FLHSMV license, but it can shut your operation down just as fast.

Resale Certificate

After you register with the Florida Department of Revenue to collect sales tax, you receive an Annual Resale Certificate that lets you buy vehicles and parts tax-free when you intend to resell them.⁹ You hand the seller a copy at purchase; signatures are no longer required. The certificate only covers items you actually resell. Pull a part off a tax-free vehicle for your own shop equipment or personal use, and you owe use tax on it at the same rate as sales tax, reported on your sales and use tax return. The certificate expires December 31 each year, and Florida applies criminal and civil penalties to fraudulent use.

What Happens If You Skip the License

Operating as a salvage dealer without a license is a second-degree misdemeanor in Florida and also qualifies as an unfair and deceptive trade practice under Chapter 501.¹ FLHSMV can also go to court for an injunction to stop unlicensed activity, and a single violation is enough for a judge to issue one.

Once licensed, violations are met with civil fines up to $1,000 per occurrence, and the department can suspend or revoke the license. Grounds for denial, suspension, or revocation include fraud on the application, a felony conviction, failure to honor payments, misrepresentation to buyers, failing to transfer titles within the required timeframe, and violating odometer disclosure rules.¹ A dealer convicted of a crime that bars them from the industry cannot hold any role at a dealership afterward, including management, sales, or a financial interest beyond reasonable compensation for selling their ownership stake.

1
Online Sunshine. Florida Statutes 320.27 – Motor Vehicle Dealers
2
Florida Department of Highway Safety and Motor Vehicles. Application for a License as a Motor Vehicle, Mobile Home, or Recreational Vehicle Dealer
3
Florida Department of Highway Safety and Motor Vehicles. Motor Vehicle, Recreational Vehicle and Mobile Home Dealer/Broker Licenses
4
Florida Department of Highway Safety and Motor Vehicles. Division of Motorist Services Bureau of Dealer Services Regional Offices
5
Florida Highway Safety and Motor Vehicles. Electronic Filing System Records Retention
6
National Motor Vehicle Title Information System. What Data is Required to be Reported to NMVTIS
7
GovInfo. Federal Register Vol. 84, No. 47 – NMVTIS Notice
8
Florida Department of Environmental Protection. NPDES Stormwater Multi Sector Generic Permit Guidance – Sector M
9
Florida Department of Revenue. Annual Resale Certificate for Sales Tax