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14 Steps How To Get A Car Dealer License To Sell Cars

( How to Get a Car Dealer License to Sell Cars - Selling your old car is pretty simple: put it online or in a magazine and wait for a buyer. However, if you want to sell cars commercially, you need to secure a car dealer license. This can be a long process, but it's important that you invest the time and effort necessary to get everything right. Requirements vary from state to state, so it's important to do your research before you begin.

How To Get A Car Dealer License To Sell Cars

  • How to make initial enquiries

How to Get a Car Dealer License to Sell Cars: 14 Steps

1. Know who needs a license. Before you start looking for a license, you need to be sure you know exactly who needs a license to operate. If you're just selling your old car, you don't need one. But if you intend to sell cars as a business in any way, do so. As a guideline, if you don't have a license, it's illegal to do the following:

Sell ​​more than a certain number of vehicles registered to you in a 12-month period, depending on the state.

Do not sell vehicles that are not registered in your name.

Buy and sell all vehicles only with the aim of making a profit.

If you have any doubts about your status, contact your local DMV.

How to Get a Car Dealer License to Sell Cars: 14 Steps

2. Recognize the different licenses. Depending on the type of car you want to sell, there are a few different types of licenses you can apply for. This can impact licensing requirements, so make sure you understand the nature of your business.

There are dealer wholesale licenses if you only want to sell to other car dealers.

There are licenses for car brokers (non-dealers) if you want to help private clients find cars from other dealers.

There are also separate licenses for new car dealers and old car dealers.

How to Get a Car Dealer License to Sell Cars: 14 Steps

3. Contact your state authority. Each state has specific requirements for becoming a car dealer, and you'll need to familiarize yourself with yours if you're going to do this properly. Requirements can vary significantly, so there is no shortcut to researching the rules and application procedures for your state.

For example, if you're applying for a license in Pennsylvania, you'll need to fill out at least five different applications, but if you're applying in North Dakota, you'll only need to do one.

Start by looking at the DMV website where you can easily access the information for each state.

How to Get a Car Dealer License to Sell Cars: 14 Steps

4. Receive all application forms. Once you have accessed the appropriate forms, you can download them and start reading through them and planning your responses to each question. Before you start filling out the form, you must have a very solid understanding of your proposed dealer.

Depending on the license, the forms may require you to provide detailed information about aspects of the business such as: B. lot size, telephone lines, office requirements, business hours and filing systems.

Use the forms to create a business plan that covers the key points.

  • Fulfillment of the admission requirements

How to Get a Car Dealer License to Sell Cars: 14 Steps

5. Pass the background check. Before you put too much work into the application process, make sure you pass the background check that most states and most bonding companies require. The tests are designed not only to determine that you have a solid financial history, but also that you have no past crimes that could pose a problem.

In addition to looking at past crimes, the exam looks for examples of what the DMV calls "moral depravity" that might indicate someone is not running an ethical dealership.

In California, it is possible to file an abbreviated application in the first instance. Talk to your local DMV and consider doing this before proceeding with a full application if you think you may have trouble passing the exam.

How to Get a Car Dealer License to Sell Cars: 14 Steps

6. Create a business plan. Creating a business plan is an essential element in any business. When starting a new car dealership it is crucial that you have a clear and well thought out business plan. This shows your creditors and approving authorities that you are serious, committed and business-minded.

Your business plan should set out your vision, goals, and goals for the company.

It should be the result of detailed market research that influenced your business strategy.

Be sure to include lots of detailed financial information about your projected income and expenses.

To get you started, you can search online for basic car dealership business plans.

How to Get a Car Dealer License to Sell Cars: 14 Steps

7. Obtain a business license . Before you can be a business of any kind, you must obtain your business license. Visit the US Small Business Administration where you can access information on rules and regulations and everything from naming your business to financing.

How to Get a Car Dealer License to Sell Cars: 14 Steps

8. Apply for a guarantee. You can usually get a quote from bond issuers for free or for a small fee. You must have good credit and your financial records must be in place to be successful. If the offer is favorable, you can apply for a deposit using the deposit company form. You must provide information about your company and the required level of commitment. You will also need to sign a credit release agreement.

Depending on your location and circumstances, it may be possible to submit cash, a deposit receipt payable to the DMV, or a passport account assigned to the DMV in lieu of a bond.

How to Get a Car Dealer License to Sell Cars: 14 Steps

9. Secure your point of sale. An important aspect of the application process is securing your retail location. You must submit a copy of a fully signed and authorized rental agreement or proof of ownership. There are a number of requirements for the website itself, which vary by location. However, your location must comply with all relevant local building codes, zoning and land use ordinances, depending on the merchant type.

Generally, you will need an outside sign to be affixed to the property or building that clearly identifies the name and type of business.

You will also need working telecommunications systems and a listed phone number.

You need enough space for all administrative and financial work.

You will probably need to include photos of your website with your application.

You should be ready to have the site approved by the DMV inspector.

How to Get a Car Dealer License to Sell Cars: 14 Steps

10. Complete your DBA name declaration. A DBA (doing business as) name is any name different from your own. For example, if your name is Sally Rose and your dealership is "Sally Rose ", do not use a DBA name. But if you basically want to call it something else, you are. "Big Car Shop", "7th Street Autos", anything that is not your real name is a DBA name.

You must register a fictitious name to receive the fictitious name declaration, which may take a few weeks.

This declaration must be submitted with your application.

How to Get a Car Dealer License to Sell Cars: 14 Steps

11. Determine if you need to file incorporation papers. In some cases, you will need to submit various incorporation documents along with your other application documents. This generally only applies if you are filing as a corporation, limited liability company or as a limited liability partnership. If in doubt, contact an adviser at your local DMV who can give you specific information about your case.

Documents that you must submit include a certificate of incorporation, a memorandum of association, or other documents that identify the shareholders, managers, and officers.

  • How to submission of the application

How to Get a Car Dealer License to Sell Cars: 14 Steps

12. Gather all documents. Once you've met all the requirements, it's time to gather your materials and make sure you haven't missed anything. Your state DMV will most likely be able to provide you with a checklist so you can make sure you haven't missed anything before proceeding with the application.

Don't skip any final checks that could save you time and money in the long run.

You can download some checklists online, but make sure you have information about your location.

How to Get a Car Dealer License to Sell Cars: 14 Steps

13. Fill out the forms. Once you have all the information and any additional documentation, you must complete all of the original application forms. It may be easier to do this after you have met all the other requirements as this process would have helped you get a very clear picture of your business. Learning by gathering all the additional information will help demystify some of the questions in the application form that can be a little confusing if you tackle them right away.

Note that some forms may need to be notarized or you may have to pay a fee. Make sure you've checked this out and met all the requirements so as not to waste time.

How to Get a Car Dealer License to Sell Cars: 14 Steps

14. Wait now Once you've submitted everything, you'll have to wait. Unfortunately, there is no set deadline for your application to be processed, and again this likely varies from state to state. California states that processing can take up to 120 days, so expect some waiting time.

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