7 How To Become A Car Dealer In California

June 19, 2022 Post a Comment

(doylc.com) How to Become a Car Dealer in California - There are three ways to buy and sell cars in California. You can operate as a wholesaler who buys cars from auctions and sells them to car dealers. You can act as a retailer, buying cars from auctions and dealers and selling directly to the public. And you can act as a broker, facilitating sales between buyers and sellers and sharing in the profits. All three activities require a license from the California Department of Motor Vehicles.

Started

Decide if you need a license. If you only sell your own used car, you do not need a driver's license. However, if you are buying and selling cars to make a profit, you need a license from the DMV. Selling cars for profit without a license in CA is illegal. This activity is known as "curbside driving" and can be punished with hefty fines if caught.

If you are unsure whether your situation requires a license, contact the DMV. CA has cracked down on curbstoners in recent years.

Decide whether you want to become a wholesaler or a retailer. The main differences are whether you sell cars directly to the public and whether you must have retail space. The same documentation is required to obtain a wholesale license or a retail license.

A wholesaler can buy cars directly from other dealers and sell them to other dealers. A wholesaler can also export cars to other countries. However, a wholesaler may not sell directly to the public. A wholesaler must have an office but no sign or place to display vehicles.

A retailer can buy cars directly from dealers and sell them to other dealers and to the public. A dealer can also export cars to other countries. A retail detail requires an office, a sign and a place to display vehicles.

Decide if you want to add an auto-agent attestation to your license. With a car broker confirmation, you can act as a middleman between buyers and sellers. You can add an auto-agent acknowledgment to either a wholesale dealer license or a retail dealer license.

As a wholesaler, a car agent's endorsement is the only way to sell direct to the public.

There is no additional paperwork required to get an Autobroker verification. You only need to tick one box in your license application.

Complete an abbreviated background check

Contact the trade inspectorate in your area. The inspector can help you decide if you need to do an abbreviated background check. Everyone must complete a full background check to become a car dealer in CA. However, CA offers a cheaper abbreviated background check for people who are not sure they will pass the full background check. If you have a criminal conviction, bankruptcy, or civil conviction, you should do an abbreviated background check before investing too much money in your business.

A list of Disciplinary Inspectors is available at https://www.dmv.ca.gov/portal/dmv/?1dmy&urile=wcm:path:/dmv_content_en/dmv/fo/inspector_office.

Complete the Personal History Questionnaire. This form asks about your education and professional background. It also asks about your criminal history and whether you have any civil convictions against you.

Be absolutely honest in your answers. CA will conduct an independent background check on you. If you omit any information, you may be denied a license.

Gather copies of all arrest records and court documents. You must submit this along with the Personal History Questionnaire. If you do not have copies to hand, you can request them from the jurisdiction where you were arrested or tried.

Submit the documents to the Occupational Inspectorate. You must enclose a check for $176 to cover the cost of the abbreviated background check.

Wait for the decision of the DMV. Depending on the background, this takes several weeks. There is no hard and fast rule as to what can disqualify you for a license. In general, the DMV looks for evidence of "moral depravity."

Incorporation of company

Create a fictitious company name. Unless you are doing business under your own name, you must create and register a name for your business. Go to your local County Recorder's Office to submit the paperwork. The fee is $100.

Apply for a business license. Go to your local town hall and ask to speak to the tax and licensing department. Register your business with the city using your own name or the fictitious company name you have created.

There are many ways to register your business. You can register an LLC, corporation, partnership, or any number of other business entities. It's best to speak with an attorney before deciding what type of deal you want to have with your company.

The cost of your business license varies by city, the type of entity you are forming, and your annual revenue.

Get a guarantee. Find a bonding company in California and buy the required $50,000 bond.

A guarantee ensures that you meet your obligations as a car dealer.

The cost of guarantees depends on your credit score, but you can expect to pay around $1,000 to $15,000 per year.

Branch as a wholesaler

Decide whether you want to work from home or somewhere else. A wholesale business can be run entirely from home. However, if you don't have space for an office in your home, you will need to rent or buy a space.

Set up an office. Remember, it's okay if it's a home office.

You don't need a sign or space for a car to be a wholesaler.

Obtain a copy of your rental agreement. If you rent your office, you will need a copy of your lease. If you own your office, a copy of your mortgage is required.

Establishment as a retailer

Set up an office. It's ok if it's home office. But since a retail merchant also needs shop space, it makes more sense if office and shop space are in the same location.

Get a sign that is at least two square feet. Since you sell to the public, the DMV requires you to have a sign advertising you as a car dealer.

Have a space big enough for at least two cars. Since you are selling cars directly to the public, you need a place to store the cars. The DMV requires you to have enough space for at least two cars, but you can of course have a lot more space.

Obtain a copy of your rental agreement. When renting, you need a copy of your rental agreement. If you own your home, a copy of your mortgage is required.

Setup as a car broker

Obtain either a wholesale license or a retail license. Automatic agent acceptance is an add-on to your license. So you need a license before you can become an agent.

Set up an office. If you add a broker pledge to your wholesale license, you can use a home office.

Get a sign that is at least two square feet. If you are adding a brokerage promise to your retail license, you will need a retail space that can accommodate at least two cars.

How to get license

Complete the CA Licensing course. This class is required to become a car dealer in CA. The course lasts six hours and will teach you about CA laws that regulate car dealerships.

Various private organizations offer the course. Search for entries on the CA DMV website. The cost is around $125 depending on which organization you choose.

Pass the entrance exam. Once you complete the course, you will take a test that tests your knowledge of California dealership laws. The test costs $16.

Fill out the "Application for the professional permit in the original". You can request a paper copy of the application from the DMV or go online at https://www.dmv.ca.gov/portal/wcm/connect/2f99916d-285a-. 441d-b481-e01f7cb88fa5/ol248u.pdf?MOD=AJPERES. The application will ask you if you are applying for a wholesale license or a retail license and if you want to add automatic agent confirmation to your license.

Have all your company documents, sureties, and financial information ready when you fill out the application.

Gather copies of your paperwork to send to the DMV. You will need copies of the following documents: 1) Deposit; 2) driver's license; 3) Rent or mortgage your office and retail space; 4) Dealer Training Completion Certificate; 5) business license; 6) indication of the fictitious name; 7) Photos of your point of sale.

Keep copies of everything so the final application process goes smoother.

Submit your complete application documents with copies of your documents. It is best to send it by registered mail so that the DMV receives everything.

It will be several weeks before a decision is made. Once your application is approved, you can start selling cars.