Opening An Automotive Dealership In New York (NYS): Five Important Steps You Need Know
So you are thinking of opening a new automotive dealership business in New York State (NYS). There are a few steps that need to be taken in order to do so.
- Pick A Name: Before you can apply with the NYS DMV and open your new automotive dealership, you need to have proof of your business name. You can not submit your application without it. If you have a Corporation or LLC you will need a copy of your filing receipt from Department of State. Partnerships and individuals must submit a copy of your Business Certificate. Also including your certificate of authority from the NYS Department of Tax and Finance.
- Find a Location: You will need a location. DMV rules and regulations have become stricter in the last couple of years and working out of your home is not acceptable. You will need a commercial location for your new venture. You will need to provide proof that you have permission to use the property as a business location as well.
- Before you can apply you will need a Surety Bond – this is a very important step. If you are expected to sell less than 50 cars a year then you need a $20,000 motor vehicle dealer bond and if you sell 51 or more you need a $100,000 bond for the automotive dealership. Franchised dealers have different bond requirements.
- If your entity is a corporation or LLC with more than 2 owners/officers/members or you have employees, in NYS you are required to carry Workers’ Compensation and Disability Insurance including Paid Family Leave Benefits. More information on this topic can be found in a previous blog article here.
- Original Facility Application: You can download an Application from the NYS DMV website and submit to the NYS DMV along with the above information and a copy of your NYS driver’s license and for anyone else listed on the application, a receipt for your purchase of the dealer’s starter kit and signs (available on DMV website), be sure to include all required fees.
From an insurance standpoint – you need the dealer bond first. Then if you are leasing space and your landlord requires proof of insurance you will need a general liability or garage liability policy. If you don’t need it right away or are not conducting business right away, you can wait for the garage liability policy until it gets closer to the final steps. You will know you are getting close when an inspector from NYS DMV makes an appointment to come to see you.
Once you receive your approval letter you will need a garage liability policy to obtain your plate or plates from NYS DMV. They type and cost of this policy varies based on several factors, is your business a retail or wholesale auto dealership? Where in NY is your business located? How is your driving record? In addition to more rating factors behind the scenes.
We are the auto dealer experts, not just when it comes to the bond and insurance. We can help you through the entire application process from start to finish. We are independent agents and know what companies have the best value for auto dealers.
Contact Lisa in the Oneida Office at 315-363-1255 for more information or to start the process of opening an automotive dealership in New York.