Illinois Form VSD 866 Dealer Recovery Trust Fund Affirmation – Illinois vehicle dealers must comply with specific requirements related to the Dealer Recovery Trust Fund. Form VSD 866, issued by the Illinois Secretary of State Vehicle Services Department, is the official affirmation used by certain dealerships to confirm exemption from the Annual Dealer Recovery Fee. This guide explains the form’s purpose, who must file it, fee details, completion steps, and how it protects consumers across the United States, with a focus on Illinois law.
What Is the Dealer Recovery Trust Fund?
The Dealer Recovery Trust Fund was created under Illinois law (625 ILCS 5/5-102.7) to protect vehicle buyers when a dealership closes without fulfilling key obligations. The fund reimburses consumers (and in some cases other dealers) in situations such as:
- A dealer fails to pay off the lien on a customer’s trade-in vehicle as agreed in the purchase contract.
- A buyer purchases a vehicle from a defunct dealer that has an undisclosed lien.
The fund is administered outside the State Treasury by a private Fund Administrator under the oversight of the Dealer Recovery Trust Fund Board. The Board includes designees from the Illinois Secretary of State and the Illinois Attorney General, plus a representative of Illinois automobile dealers. Claims are reviewed at regular public meetings, and payments are limited (generally capped at $35,000 per claim) once the Board determines the dealer has filed for bankruptcy under Chapter 7, had its license revoked, or otherwise terminated operations.
Official information on the fund and Board meetings is available from the Illinois Attorney General’s Office and the Illinois Vehicle Code.
Purpose of Form VSD 866
Form VSD 866 — Dealer Recovery Trust Fund Affirmation is the document used by qualifying Illinois dealerships to affirm that they are not required to pay the Annual Dealer Recovery Fee. According to the official form (revision April 2023 — VSD 866.2), Public Act 97-480 and subsequent updates require dealers that sold more than 25 vehicles in the prior calendar year to pay into the fund. Dealers that sold 25 or fewer vehicles, or that primarily sell mobile homes, trailers, or recreational vehicles, are exempt from the fee but must submit the completed, signed, and notarized affirmation.
Dealers required to pay the fee do not complete Form VSD 866. Instead, they remit a separate check, draft, or money order payable to the Dealer Recovery Trust Fund.
The current official form is available directly from the Illinois Secretary of State:
Download Illinois Form VSD 866 (PDF)
Who Must File Form VSD 866?
You must complete and submit Form VSD 866 if your dealership is an existing Illinois licensed vehicle dealer and either of the following applies:
- You sold 25 or fewer vehicles in the prior calendar year, or
- You primarily sell mobile homes, trailers, or recreational vehicles.
In these cases, no Annual Dealer Recovery Fee is due, but the affirmation is mandatory. The form requires the authorized representative to swear under penalty of perjury that the dealership meets the exemption criteria. False statements can result in suspension or revocation of the dealer license.
Dealers that sold more than 25 vehicles in the prior year must pay the fee instead of filing the affirmation.
Annual Dealer Recovery Fee Schedule
For the dealer’s established place of business, the Annual Dealer Recovery Fee (when required) is based on the number of vehicles sold in the prior year:
- $0 — 25 or fewer vehicles (affirmation required)
- $150 — 26 to 199 vehicles
- $300 — 200 to 299 vehicles
- $500 — 300 or more vehicles
Each additional dealer location is assessed a $50 fee. These amounts appear on the official Form VSD 866 and are consistent with the graduated schedule set forth in the Illinois Vehicle Code for license renewals (625 ILCS 5/5-101 and 5-102). New license applications may follow a different structure, and collection of the fee can be suspended in years when the fund balance exceeds $3,500,000 (subject to eligibility rules).
Payment must be made by separate check, draft, or money order payable to the Dealer Recovery Trust Fund. Failure to pay when required can lead to license revocation by the Secretary of State.
How to Complete and Submit Form VSD 866?
Follow these steps carefully:
- Download the current official PDF from the Illinois Secretary of State website (link above).
- Enter the full legal name of the dealership in the affirmation statement.
- Provide the dealer number assigned by the Secretary of State.
- State the number of vehicles sold in the prior year.
- Have an authorized representative sign the form and print their name, title, and the date.
- Have the form notarized (required for dealerships claiming the 25-or-fewer exemption).
The completed, signed, and notarized form (along with any other applicable fees or forms) must be mailed to:
Secretary of State
Vehicle Services Department
Dealer Licensing Section
501 S. Second St., Rm. 069
Springfield, IL 62756-5100
Always use the most recent version of the form published by the Illinois Secretary of State. Forms and related publications are listed on the official Dealers and Remitters Publications and Forms page.
Consumer Protections and Claim Process
The Dealer Recovery Trust Fund exists solely to help victims of dealership closings. Eligible claimants (retail customers or, in certain cases, other dealers) must generally file within two years of the transaction date. Claims are considered only after the Board determines that the dealer has entered Chapter 7 bankruptcy, had its license revoked, or otherwise terminated. The Board votes by two-thirds majority, and awards are paid to the appropriate secured party to release liens or titles.
Consumers who believe they qualify should contact the Illinois Attorney General’s Consumer Fraud Bureau or review the claim process information published by that office. The fund does not replace other legal remedies; civil actions remain available.
Why Compliance Matters for Illinois Dealers?
Accurate completion of Form VSD 866 (or timely payment of the fee when required) is part of maintaining a valid dealer license in Illinois. The Secretary of State actively enforces these requirements. Dealers who primarily sell mobile homes, trailers, or recreational vehicles, or who operate at low volume, should retain records of vehicle sales counts to support the affirmation if requested.
For the most current forms, fee details, and licensing guidance, always refer to official sources:
Staying current with Illinois dealer licensing rules helps protect both your business and the consumers you serve.