How to Get a Car Dealer License in PA: Facility, Fees, PALS

To get a car dealer license in PA, you register your business, secure a facility that meets the state’s inspection rules, post a $20,000 surety bond, carry the required insurance, clear a criminal background check, and apply through the State Board of Vehicle Manufacturers, Dealers, and Salespersons using the Pennsylvania Licensing System (PALS). The application fee is $190, plus a $60 assessment to the Motor Vehicle Transaction Recovery Fund. Before the Board issues your license, a Vehicle Board agent will inspect your dealership in person.¹²

Do You Actually Need a Dealer License

Pennsylvania defines a dealer as anyone engaged in the business of buying, selling, or exchanging new or used vehicles for compensation. There is no numeric threshold like “five cars a year.” The test is whether you are acting as a business. Advertising vehicles, soliciting buyers, negotiating sales for someone else, or consigning vehicles all count as dealer activity under the Board of Vehicles Act.²

Two agencies split the work. The State Board handles the license itself, and PennDOT handles dealer registration plates and title processing.³

Pick the Right License Type

Pennsylvania issues separate licenses depending on what you sell. The type you choose determines whether you need a franchise agreement and, in one case, changes the bond amount.

New vehicle dealer: sells new and used vehicles and must hold a written franchise from the manufacturer or distributor for each line-make.
Used vehicle dealer: sells only pre-owned vehicles, trailers, or semitrailers. Fleet owners selling directly to retail buyers fall here.
New or used manufactured housing or mobile home dealer.
New or used recreational vehicle dealer. New RV dealers need a franchise, and RV dealers post a separate $30,000 bond under the Board of Vehicles Act.²
Mobility vehicle dealer.

Motorcycle dealers follow the same process with different plate fees and display area rules. Each branch lot needs its own license at the same $190 application fee.¹

Get the Facility Ready Before You Apply

This is where applications stall most often. The Board will inspect your location, and the specifications are strict. Get everything in place before you file, because you will fix any deficiency and resubmit before approval.

Building and Office

You need a permanent enclosed building dedicated to the dealership. An office trailer with a permanent foundation and skirting qualifies. The space must be physically separated from any adjoining business or residence by partitions or walls. Inside, you need a private office, separate from display, repair, or service areas, with room to store your books and records.⁴

The dealership cannot operate out of a residence or share space with a non-vehicle business. A working telephone listed and billed in the dealership’s name is required.

Display Area

Your display area must hold at least five vehicles of the type you sell, with doors open. For manufactured housing and recreational vehicle dealers, the minimum is 5,000 square feet unless a statutory exemption applies. The area can be indoors, outdoors, or both, but it cannot include wrecked vehicles, vehicles awaiting reconditioning, or inventory not actively offered for sale.⁴

Outdoor lots must be graded and surfaced with concrete, asphalt, gravel, or similar material, and visibly separated from adjacent parking using grass strips, painted lines, ropes and pennants, or another conspicuous barrier. Evening hours require adequate lighting.

Signage, Zoning, and Occupancy

You need a permanent exterior sign showing the dealership name and business hours. The location must comply with local building codes and zoning ordinances, and you need a certificate of occupancy issued under the Pennsylvania Construction Code Act.⁴

Documents to Gather

Assemble everything before starting the application. Missing paperwork is the second-most-common cause of delay after facility issues.

Articles of Incorporation or Organization filed with the Pennsylvania Department of State.
A $20,000 surety bond for each place of business. If the bond ever drops below $20,000, your authority to operate is void. RV dealers post $30,000 instead.⁵
Proof of garage liability insurance, plus workers’ compensation if you have employees.
Pennsylvania State Police criminal history record checks for all owners and principals.⁶
Zoning approval from your municipality and a certificate of occupancy.
Deed or lease for the dealership location.
Interior and exterior photographs of the dealership.
Pennsylvania Sales Tax License number and Federal Employer Identification Number.
A recent phone bill showing the dealership’s listed number.
For new vehicle dealers, the written franchise agreement.

The surety bond is not insurance for you. If your dealership fails to deliver a title, misrepresents a vehicle, sells a stolen car, or does not remit sales tax, a consumer or state agency can claim against the bond. The bonding company pays the claim and then collects from you. Annual premiums typically run 1% to 10% of the bond amount depending largely on your personal credit, so roughly $200 to $2,000 per year for a $20,000 bond.

Fees You Will Pay

The dealer license application fee is $190.¹ Add a $60 assessment to the Motor Vehicle Transaction Recovery Fund, paid by check to the Commonwealth of Pennsylvania.⁷

Dealer registration plates are separate and go through PennDOT. A one-year plate is $70 for a new or used vehicle dealer and $35 for a motorcycle dealer. Two-year plates are $140 and $70, respectively. Personalizing dealer plates costs an additional $136.⁸

Submit Through PALS and Pass the Inspection

Applications go through the Pennsylvania Licensing System at pals.pa.gov. Create an account, select the Board of Vehicle Manufacturers, Dealers, and Salespersons, upload your documents, and pay the fees. A paper application can be mailed to PennDOT’s Bureau of Motor Vehicles, but online is faster and lets you track status.⁹

After the Board receives your application, a Vehicle Board agent schedules an inspection. The agent verifies the building, private office, display area surfacing and size, signage, lighting, and separation from adjacent properties. If your grading is incomplete or your sign is not permanently installed, the inspector flags it and you fix the issue before resubmitting.

Licensing Your Salespeople

Every person you hire to buy, sell, or exchange vehicles for compensation needs a separate salesperson license. Pennsylvania does not require a degree, exam, prior experience, or continuing education.¹⁰

The application fee is $70 and biennial renewal is $141.¹ A salesperson can only be licensed under one dealer at a time. Licenses are issued to your primary location, and you are responsible for distributing them to the correct branch if the person works at a different lot. Out-of-state salespersons with a current, clean license in a state with substantially equivalent requirements can apply for a Pennsylvania endorsement under Act 41 rather than starting over.¹⁰

Federal Rules That Apply Once You Open

A Pennsylvania license is only the state layer. Federal obligations attach the day you start selling.

IRS Form 8300 Cash Reporting

Any dealership that receives more than $10,000 in cash in a single transaction or a series of related transactions must file Form 8300. Related means transactions within 24 hours of each other, or transactions further apart if you know or have reason to know they are connected. Recurring cash payments on a lease or loan that add up to more than $10,000 within 12 months also trigger a filing. File within 15 days of the payment that pushes the total past $10,000.¹¹

Wire transfers do not count as cash. A cashier’s check, bank draft, or money order with a face value over $10,000 is also not treated as cash for this purpose. If a customer refuses to provide a Taxpayer Identification Number, you still file and document that you requested it.¹¹

FTC Buyers Guide on Every Used Vehicle

Every used vehicle must display a Buyers Guide where both sides are visible, such as hanging from a mirror or attached to a side window. It cannot sit in the glove compartment or trunk. The guide lists make, model, year, VIN, and warranty status. Pennsylvania allows “As Is” sales, so use the “As Is—No Dealer Warranty” version if you are not offering a warranty. Sales conducted in Spanish require a Spanish-language guide. FTC penalties can reach $53,088 per violation.¹²

FTC Safeguards Rule for Financing Dealers

If you finance vehicle purchases, arrange financing through a lender, or lease vehicles for more than 90 days, the FTC treats you as a financial institution. You must develop, implement, and maintain a written information security program protecting customer data such as Social Security numbers, financial account information, and credit applications. Since May 2024, certain data breaches must be reported to the FTC.¹³

Dealer Plates and How They Can Be Used

After licensing, you apply to PennDOT for dealer registration plates. These let you move vehicles held for sale on public roads without registering each one. The $20,000 surety bond is required to get plates. Farm equipment dealers, mobile home dealers, and modular housing manufacturers are exempt from this bond requirement for plate purposes.¹⁴

Dealer plates can only go on vehicles your dealership owns or possesses that are held for sale, and only for specific uses: demonstrating to a prospective buyer for up to five days, loaning to a customer whose car is in your shop for up to 30 days, testing or inspecting or moving to a repair shop within 25 miles, transporting to or from a show, auction, or another dealer, or teaching in an approved driver education course. Misuse escalates from a one-month plate suspension for a first offense to full revocation on a third, with a one-year wait before reapplying.¹⁵

Renewing and Staying in Compliance

Pennsylvania dealer licenses expire on May 31 of each odd-numbered year. The current cycle runs from June 1, 2025 through May 31, 2027. Biennial renewal is $274 for a dealer license and $274 for each branch lot, handled through PALS.¹⁶ Salesperson renewals are $141 on the same cycle.¹

Between renewals, keep the facility in compliance, maintain accurate sales records, and display your license at your place of business. Report changes to your address, ownership, or corporate structure to the Board promptly. If your bond lapses below the required amount, your authority to operate is automatically void even if the license itself is current.⁵

What Happens If You Sell Without a License

Selling vehicles without a license in Pennsylvania is a summary offense. Each vehicle sold counts as a separate offense. The fine is $1,000 per violation or double the profit from the sale, whichever is higher. The Board can add a civil penalty of up to $1,000 per violation after a hearing. Ten unlicensed sales means at least $10,000 in criminal fines before civil penalties. Acting as an unlicensed broker, arranging sales for compensation without a license, carries the same exposure.²

1
Pennsylvania Code and Bulletin. Pennsylvania Code 49 – 19.4 Fees
2
Pennsylvania General Assembly. Board of Vehicles Act
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Commonwealth of Pennsylvania. State Board of Vehicle Manufacturers, Dealers, and Salespersons
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Pennsylvania Code and Bulletin. Pennsylvania Code 49 – 19.18 Established Place of Business for Dealers
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Pennsylvania Department of Transportation. MV-375 Surety Bond Form
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Commonwealth of Pennsylvania. Request a Criminal History Background Check
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Pennsylvania General Assembly. Pennsylvania Code Title 75 – Motor Vehicle Transaction Recovery Fund
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Pennsylvania Department of Transportation. Bureau of Motor Vehicles Schedule of Fees
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Commonwealth of Pennsylvania. Apply for or Renew Professional Licensing
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Commonwealth of Pennsylvania. Vehicle Salesperson Licensure Snapshot
11
Internal Revenue Service. Report of Cash Payments Over $10,000 Received in a Trade or Business – Motor Vehicle Dealership Q&As
12
Federal Trade Commission. Dealer’s Guide to the Used Car Rule
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Federal Trade Commission. Automobile Dealers and the FTC’s Safeguards Rule Frequently Asked Questions
14
Pennsylvania General Assembly. Pennsylvania Code Title 75 – Chapter 13 Registration of Vehicles
15
Pennsylvania Code and Bulletin. Pennsylvania Code 67 – 53.9 Sanctions for Violations by Dealer, Manufacturer
16
Commonwealth of Pennsylvania Department of State. License Renewal Cycle and Fees for Vehicle Manufacturers, Dealers and Salespersons