13 Steps How To Get A Used Car Dealership License

(doylc.com) How to Get a Used Car Dealers License - If you plan to sell more than 3 or 4 cars in a year, most states require you to obtain a car dealership license. The requirements vary from state to state. Some states may require that you have insurance and an established place of business before you can even apply. However, in other states, you may only need to provide proof of insurance for the used cars you intend to sell. This article provides a general description of common procedures, but you must check with your state's Department of Motor Vehicles for specific information that applies to you.

• Take the first steps to be ready to apply

1. Decide what type of license you need. In many states, the application process and the license you receive may vary depending on the type of vehicle you intend to sell. Some options you may need to consider cover a wide spectrum :

- New or used

- Cars

- Motorcycles

- Boats

- Follower

- Mobile shelters

- Wholesale (as opposed to retail sales)

- Emergency vehicles

2. Study the application process in your federal state. The application process for obtaining a car dealership license alone is extensive. Some states, like Texas or California, publish a dealership manual that explains the car sales business and the application process. Check with your state's Department of Motor Vehicles to see if such a guide is available, and then take the time to study it.

3. Prepare your setup.In many federal states, you must already have an established company location as part of your application. For example, in Washington, you must have a gated building with a permanent, permanent outside sign, a telephone number that is listed on directory assistance, and minimum business hours of at least five days per week. New Jersey adds specific requirements for you to show you have a desk, chair, landline phone, and a safe to store documents. Indiana sets requirements for the square footage you need to display vehicles. You must research the minimum requirements for your state so that your location is ready when you apply.

4. Prepare the paperwork. In addition to the application form itself, most states have a variety of other forms that you must submit. Visit your state's Department of Motor Vehicles website for complete requirements. Some examples of the extra work you need to prepare are:

- Building Permit Form (Maryland)

- Certificate of Sales Tax Registration (New Jersey)

- Company Records from the Secretary of State, if applicable for the company (Ohio)

- Child Support Certification Form (New York)

- These are just examples. Check with your state for specific information.

5. Take care of insurance and liability. In most states, in order to operate and obtain a license as a car dealer, you must show that you have adequate insurance. Insurance is designed to protect the business from inventory losses and also protect people from accidents while they are on your property. Each state sets its own limits and requirements for sums insured.

6. Prepare the required fees. Each state has its own fee system that accompanies the filing and receipt of a dealer license. In some cases, such as For example, in New York, the fee is a fixed amount. In other states like Ohio, the fee can vary depending on the size of the business you wish to operate.

7. Get the necessary background check. In many cases, you will need to include a criminal record extract with your application. In some states, this includes fingerprinting and reference checks. These processes can take some time, so start well before submitting your application.

• How to applying for a car dealer license

8. Complete the application form and any other required documentation. When you feel you are done with all the preparations, get the license application form from your state's motor vehicle department and fill it out carefully. In many cases, a single form will be used for multiple types of licenses, so read and fill out the form carefully.

A useful reference site is DMV.org. Although this website is not officially affiliated with any state's Department of Motor Vehicles, DMV.org has links to most official forms from all 50 states.

9. Submit your application and other materials. If you've planned ahead, it might just mean gathering up the paperwork you've been working on and delivering it to the Department of Motor Vehicles. In some federal states you can even submit your application by computer and upload additional documents.

It's a good idea to contact your DMV beforehand to find out if they will accept or even request that you make an in-person appointment.

10. Cooperate and participate in the review process. Once you have submitted your application and supporting materials, your application will be assigned to a licensing agent for review. This person checks your entire package for completeness and correctness. There may even be a site visit at your business location. It is in your best interest to be involved in this process to ensure it runs smoothly. Note that it may take several weeks to complete the application process before your license is issued.

• How to maintaining dealer license

11. Renew your license as needed. You must ensure that your license is current at all times. This usually requires an application for renewal (much simpler than the original process) and payment of a renewal fee. For example, in Florida, you can pay a $75 fee and renew each year, or opt for a two-year license and pay a $150 fee. In Connecticut, you can renew online by using a credit card to pay the fee.

12. Fulfill all reporting obligations in a timely manner. As a running business, you are now required to file a variety of reports including sales reports, tax returns, and others. If you fail to comply with reporting requirements, you may lose your dealer license. Contact the Department of Motor Vehicles and the Secretary of State's Office to keep up with your local needs.

13. Avoid violations. It is important that you continue to meet your state's expectations in operating your business or you could lose your license at any time. For example, the New Jersey Motor Vehicle Commission publishes a list of violations that may result in suspension or revocation. Some things to avoid are selling additional unlicensed locations, failing to keep records, failing to report accurate sales and tax information, and misusing merchant identifiers.