To help manage their workload, many state governments allow independent businesses to act as a middleman, performing certain driver-service functions that would normally fall under the Department of Motor Vehicle's purview. Auto tag distributors issue license plates, process car registrations, perform title transfers, renew driver's licenses and deal with other common driver needs. The job requires attention to detail and the ability to understand and follow sometimes complex regulations. The exact process for becoming an auto tag distributor varies from one state to another, but is generally overseen by your state's DMV.

The Business

Auto tag distributors sometimes make this their sole business or fold it into a larger business, such as a car dealership or garage. Auto tag distributors make money on a cost-plus pricing basis. This means the state DMV sets the cost for various auto services. The distributor collects this amount on behalf of the DMV and then charges an additional fee for his service. States may limit the amount of this service fee. This might only be a minor issue if you will offer auto tag services as part of another business. If you plan on specializing in auto tag distribution alone, you will need to set yourself apart from your competitors to survive.

Tag Distributor Requirements

New auto tag distributors must submit an application form and fee to the DMV. Applicants also are required to submit to a background check and must provide a surety bond to prove they have insurance. The exact amount of coverage required varies by state and may be affected by the amount of business you conduct. Zoning approval forms and inspections also might be required to prove you are legally able to do business in your desired location and to ensure you have all the necessary equipment. Your state also might require you to participate in a training session or make additional requirements.