Getting a Dealer's License and Why it Should be Difficult
Dear Miss Mota Mouth,
How can I get a dealer’s license easily? I want to start buying and selling cars.
Phil, Corona, CA
Dear Phil,
Usually you will have to complete a course taught by a licensed dealer who is approved to teach the license. In California it is a 1 day, 6 hour course. On that day you take an exam and if you pass you go to the local DMV and take a test there. If you pass then you can apply to have a retail location approved by the DMV and the local zoning board. Usually it needs a certain number of spots to park cars, a certain amount of total square feet, an office that is occupied and open a certain number of hours a week, has electricity, has a sign of a certain size that states the business name and license number and some other requirements. Usually only one license is allowed per approved address. Then you have to file a DBA with the state under the name that you will be doing business as and apply for a state sales tax number and business license. You will also need a commercial bank account.
Once all of that is in place you will have to obtain a bond, usually for $50K or more and the bond company will do a background check and credit history and charge you according to your risk. (if your bond ever has a claim against it for even .25 cents, you will lose your license)
Once you open you will have to use what you learned in the dealer school which is to do title transfers, pay the state taxes, etc. You will also need a dealer account with an agency like Carfax to get car history reports. You might need an ongoing relationship with a lender who can finance your venture and they will do a background check and credit history as well.
It isn't easy nor should it be to get a dealer's license because you have to be responsible for filing taxes properly, dealing with lenders, selling safe vehicles and protecting both your investment and you buyer’s investment legally.
Good luck!
Stumble It!
How can I get a dealer’s license easily? I want to start buying and selling cars.
Phil, Corona, CA
Dear Phil,
Usually you will have to complete a course taught by a licensed dealer who is approved to teach the license. In California it is a 1 day, 6 hour course. On that day you take an exam and if you pass you go to the local DMV and take a test there. If you pass then you can apply to have a retail location approved by the DMV and the local zoning board. Usually it needs a certain number of spots to park cars, a certain amount of total square feet, an office that is occupied and open a certain number of hours a week, has electricity, has a sign of a certain size that states the business name and license number and some other requirements. Usually only one license is allowed per approved address. Then you have to file a DBA with the state under the name that you will be doing business as and apply for a state sales tax number and business license. You will also need a commercial bank account.
Once all of that is in place you will have to obtain a bond, usually for $50K or more and the bond company will do a background check and credit history and charge you according to your risk. (if your bond ever has a claim against it for even .25 cents, you will lose your license)
Once you open you will have to use what you learned in the dealer school which is to do title transfers, pay the state taxes, etc. You will also need a dealer account with an agency like Carfax to get car history reports. You might need an ongoing relationship with a lender who can finance your venture and they will do a background check and credit history as well.
It isn't easy nor should it be to get a dealer's license because you have to be responsible for filing taxes properly, dealing with lenders, selling safe vehicles and protecting both your investment and you buyer’s investment legally.
Good luck!
Stumble It!
posted by Miss Mota Mouth@ 12:56 PM 0 Comments
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