To sell motor vehicles in Indiana, you need a dealer license from the Secretary of State’s Auto Dealer Services Division, and the core Indiana motor vehicle dealer requirements are a $30 application, a $25,000 surety bond, liability insurance, a qualifying physical location with proper zoning, a federal EIN, an Indiana Registered Retail Merchant Certificate, and (for first-time used-vehicle dealers) a pre-licensing training course. Those pieces have to be in place before the Division will issue a license, and most of them have to stay current for you to keep it.
Who Regulates Dealers and What the License Covers
The Auto Dealer Services Division inside the Secretary of State’s office handles applications, renewals, and enforcement for anyone selling motor vehicles in Indiana. The governing statutes sit in Indiana Code Title 9, Article 32, with accompanying administrative rules at 75 IAC 6. When you apply, you tell the Division whether you plan to sell new vehicles, used vehicles, or both; the base application fee is $30 for either category.
What Goes in the Application
The application is submitted to the Auto Dealer Services Division on a form prescribed by the Secretary of State. You’ll need to supply the business information the Secretary considers necessary to evaluate your qualifications, along with:
- Evidence of the required surety bond
- Proof of liability insurance coverage
- A federal Employer Identification Number from the IRS
- A Registered Retail Merchant Certificate from the Indiana Department of Revenue
- A zoning affidavit from the local zoning enforcement officer confirming your proposed location is zoned for a dealership (or, where no zoning authority exists, a statement to that effect from the local government executive)
The EIN application is free through the IRS, but it must be completed in a single online session and requires the Social Security number of the responsible party in control of the business. Dealers who arrange financing, extend credit, or lease vehicles will need the EIN regardless.
The $25,000 Surety Bond
Every applicant must post a $25,000 surety bond running in favor of the state. The bond secures payment of any fines, penalties, or costs the Secretary of State assesses after a hearing, and it also covers damages awarded to consumers harmed by a dealer’s violations. Annual premiums for a bond of this size typically run from less than 1% to 10% of the bond amount, depending on your credit history.
Location and Facility Standards
Indiana requires every dealer to maintain a permanent, established place of business. The site must include:
- At least 1,300 square feet of indoor space
- A minimum 100-square-foot office
- An outdoor display area that can hold at least ten vehicles
Dealers who use the internet to facilitate sales still have to keep all transaction records at their established Indiana business location. Any change to the dealership’s name or location requires notice to the Secretary of State. Online dealers must notify the Division within ten days of any change to a name, address, or phone number documented in business records created from Indiana transactions.
Pre-Licensing Training for New Used-Vehicle Dealers
If you’ve never held an Indiana dealer license and plan to sell used vehicles, you have to complete a pre-licensing training course administered by the Indiana Independent Automobile Dealers Association before submitting your application. New-vehicle-only applicants aren’t subject to this specific course requirement.
What You Have to Do Once You’re Licensed
Keep Records and Open Them to the Division
Licensed dealers must create and maintain records of their vehicle transactions and make those records available to Auto Dealer Services Division staff on request. The record-keeping and access rules sit in Indiana Code Title 9, Article 32, Chapter 16. New-vehicle dealers also have to file and maintain a current copy of each franchise agreement with the Secretary of State.
Disclose Salvage and Rebuilt Status
Selling, exchanging, or transferring a rebuilt or salvage vehicle without disclosing that status to the buyer is classified as an unfair practice under Indiana law. This is one of the more common violations the Division investigates.
Advertise Accurately
IC 9-32-13-20 prohibits false, deceptive, or misleading advertising. Advertisements must accurately represent the vehicle, including its price and condition. The statute covers deceptive acts or practices broadly, so verbal misrepresentations during negotiations can trigger the same liability as a misleading print ad.
Cap Document Preparation Fees at $200
You can charge a document preparation fee, but Indiana caps it at $200 (subject to annual adjustment tied to the Consumer Price Index). The fee must be included in the advertised sale price, disclosed in writing during negotiations as a specific dollar amount, and shown as a separate line item on the buyer’s bill of sale or purchase contract. Charging above the cap or hiding the fee is itself an unfair practice.
Perform Delivery Prep and Honor Warranties
New-vehicle dealers must perform the delivery and preparation work specified in the manufacturer’s or distributor’s preparation agreement. Willfully skipping those steps is a separate unfair practice under IC 9-32-13-2, and willfully failing to honor warranty obligations is independently listed as well.
Federal Rules That Apply on Top
State licensure isn’t the whole picture. Several federal laws impose independent obligations on Indiana dealers, and the penalties can far exceed what the Secretary of State can impose.
FTC Buyers Guide
Every used vehicle offered for sale must display a window sticker called the Buyers Guide. It must state whether the dealer is offering any warranty and, if so, spell out the warranty’s duration, which systems it covers, and what percentage of repair costs the dealer will pay.
IRS Form 8300 for Cash Over $10,000
Any dealer who receives more than $10,000 in cash from a single transaction or a series of related transactions must file IRS Form 8300 within 15 days. Transactions are considered related if they occur within 24 hours or if the dealer knows they’re part of a connected series, even across multiple days. Failing to file can trigger both civil penalties and criminal prosecution.
Gramm-Leach-Bliley Act and Safeguards Rule
Dealers who extend credit, arrange financing or leasing, or provide financial advice qualify as financial institutions under the Gramm-Leach-Bliley Act. You must notify customers about the information you collect, explain who you share it with, and give customers the right to opt out of certain third-party sharing. The FTC’s Safeguards Rule also requires a written security program with administrative, technical, and physical safeguards for customer data.
Truth in Lending Disclosures
When you arrange financing, the Truth in Lending Act requires written disclosures before the buyer signs. The form must show the Annual Percentage Rate, total finance charge, amount financed, total of all payments, number of payments, late fees, and whether prepayment triggers a penalty. The form has to be filled in completely; handing a buyer a blank disclosure violates the rule.
Odometer Disclosure
Federal law requires a written odometer disclosure statement with every vehicle transfer, certifying whether the reading reflects actual mileage, exceeds the odometer’s mechanical limits, or is inaccurate. Dealers must retain these records. Some vehicles are exempt, including those with a gross vehicle weight rating over 16,000 pounds, non-self-propelled vehicles, and older vehicles based on model year.
Emissions Tampering
The Clean Air Act makes it illegal to remove, disable, or tamper with a vehicle’s emissions control systems and separately prohibits selling or installing defeat devices. Civil penalties run up to approximately $5,761 per vehicle tampered for individuals, with higher amounts for dealers and manufacturers.
Renewing Your License
Indiana dealer licenses and dealer plates expire annually on a staggered schedule tied to the first letter of your business name. Dealerships starting with “A” or “B” expire February 1, “C” names expire March 1, continuing through the alphabet, with “W” through “Z” expiring January 1. You can renew up to 90 days before expiration, and renewals must be completed online.
A few mechanics matter at renewal time:
- You have to be linked to the dealer account as the Primary User or Admin User.
- Your bond and insurance must have expiration dates that fall after the license expiration date.
- The insurance certificate holder must be listed as the Indiana Secretary of State, not the BMV.
- Plate invoices are sent separately after the license renewal is approved.
Letting a license lapse can bring penalties and a suspension of operations until the renewal is completed.
What Non-Compliance Costs
The Auto Dealer Services Division can impose civil penalties of up to $10,000 for each violation of IC 9-32 or 75 IAC 6, and it can suspend or revoke a dealer’s license outright. Losing a license also strips your access to dealer plates, which effectively shuts down the business. Indiana’s unfair practices chapter lists more than 30 specific violations, and each one can be penalized separately, so compounding fines add up fast.
Federal penalties stack on top of state ones. Odometer fraud alone carries a civil penalty of up to $10,000 per vehicle with a maximum of $1,000,000 for a related series of violations, plus criminal penalties of up to $250,000 in fines and three years of imprisonment. For a corporate dealer, individual officers who authorized or participated in the fraud face personal liability.
One boundary worth noting: wholesale dealers, automobile auctioneers, and brokers follow most of the same rules as retail dealers under 75 IAC, but a wholesale dealer may not sell vehicles to the general public, and some retail consumer-facing disclosures won’t apply in the same way. If you’re licensing as a wholesaler or auctioneer, check the specific provisions before assuming retail guidance covers your operation.