Illinois Auto Dealer Bond$50,000 Per Location

Under 625 ILCS 5/5-102, Illinois requires a separate $50,000 bond or certificate of deposit for each location at which you intend to act as a vehicle dealer. This per-location requirement is more stringent than many states that require only one bond regardless of the number of locations. Each bond ensures that consumers at every dealership location are protected against dealer violations.

Illinois auto dealer bonds ($50,000) typically cost $500-$5,000 annually per location. With excellent credit (750+), expect $500-$1,000 (1-2%). Good credit (680-749) costs $1,000-$2,000 (2-4%). Fair credit (620-679) ranges $2,000-$3,500 (4-7%). Lower credit may pay up to $5,000 (10%). Multi-location dealers should budget for bonds at each site.

First-time used car dealer license applicants must attend an eight-hour training provided by the Illinois Secretary of State's office before a license can be issued. The training covers licensure requirements, applicable taxes, consumer protection laws, and other topics affecting dealerships. The training must be completed before your scheduled licensing date. Contact the Dealer/Remitter Licensing Section at (217) 782-7817 for scheduling.

The annual Illinois vehicle dealer license fee is $1,000. If your scheduled class date (for the 8-hour training) is prior to June 15, you pay the full $1,000. If your class date is June 16 or later, you pay a prorated fee of $500. Payment must be by check or money order payable to the Illinois Secretary of State.

Illinois vehicle dealers must be bonded for the first 60 consecutive months of business operations, provided they have not been delinquent or deficient in transmitting title/registration fees or taxes during that period. The surety must notify the Secretary of State Dealer Licensing Section at 501 S. Second St., Springfield, IL 62756 thirty days prior to any bond cancellation.

Illinois requires an established place of business per Administrative Code Section 1020.10. The business office cannot be located in a residence. During the facility inspection, Secretary of State personnel verify compliance with all requirements including adequate office space, vehicle display area, signage, and accessibility. The location must be open to the public during posted business hours.

Yes. Illinois allows either a $50,000 surety bond or a $50,000 certificate of deposit in the business name and the Secretary of State's name. The CD must be from an Illinois financial institution. Most dealers choose the surety bond because it does not require tying up $50,000 in capital -- you only pay the annual premium (1-10% of the bond amount).

Yes. We work with specialized carriers for higher-risk applicants and regularly approve applicants with credit scores as low as 500. Rates for the $50,000 Illinois bond with challenged credit typically range 5-10% ($2,500-$5,000 per location).

The Illinois Secretary of State, Vehicle Services Department, Dealer/Remitter Licensing Section regulates all motor vehicle dealers in Illinois under the Illinois Vehicle Code (625 ILCS 5). The licensing section is located at 501 S. Second St., Springfield, IL 62756 and can be reached at (217) 782-7817.