Starting a dealership
Dealer licence requirements in the UK
The UK does not issue a single 'dealer licence' — but there is still a stack of registrations and permissions every used car dealer needs.
TL;DR
There is no formal used-car dealer licence in the UK. Instead you need: HMRC registration, motor trade insurance, FCA authorisation if you sell finance, ICO registration for data, and — usually — trade plates from the DVLA.
Why there is no single licence
Unlike jurisdictions such as the US, the UK does not require a specific "used car dealer licence". Instead, motor traders are regulated through a mix of general company law, consumer protection statutes and sector-specific bodies.
The registrations you do need
- HMRC — self-employed or limited company, plus VAT if you cross the threshold.
- Motor trade insurance — road risk as a minimum, combined for premises.
- FCA — a Limited Permission Consumer Credit licence is required to sell or introduce finance.
- ICO — data protection registration, currently £52/year for most dealers.
- Local authority — planning permission and, in some cases, environmental permits for storing scrap or waste oil.
Trade plates from the DVLA
Trade plates let you move untaxed stock on the road for legitimate trade purposes: collections, deliveries, MOT tests and test drives. Apply through the DVLA with form VTL301. You must keep a record of every use — Lotra logs this against the vehicle automatically.
Optional trade bodies
Membership of the Motor Ombudsman, RMI or NFDA is optional but signals professionalism. The Motor Ombudsman's TISA code provides a structured complaints process, which many buyers now look for.
General information only, not legal advice. Rules change — check with the FCA, DVLA and your local council before you trade.
Frequently asked questions
Is there a UK dealer licence?
No. Unlike the US, the UK does not issue a specific licence to sell used cars. Instead you must satisfy a set of registrations and consumer-law obligations.
Do I need trade plates?
Most dealers do. Trade plates from the DVLA let you drive untaxed vehicles that are part of your stock. A pair costs £165 for 12 months and £96 for 6 months.
Do I need to be a member of a trade body?
Not legally — but joining the Motor Ombudsman or NFDA can help with consumer trust and access to a formal disputes process.
Do I need planning permission?
If you display or sell cars from a fixed premises, yes. Most residential addresses will not have permission for commercial vehicle sales.
Do I need to notify anyone when I buy stock?
Yes — the DVLA must be notified via the V5C 'sold to the motor trade' section within your record-keeping cycle.
Related guides
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