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5 Easy Steps to Getting Your Car Dealer License

If you’re in the business of buying and selling vehicles for a profit, you likely need an auto dealer license to operate your business. With an auto dealer license, you are able to have either a physical or online dealership that offers new or used vehicles to customers in your city or state. While this seems fairly straightforward, getting your car dealer license can be a lengthy process. However, if you’re looking to start your dealership, here are five easy steps to getting your auto dealer license sooner rather than later.

Check Your State Requirements

The very first step in becoming a licensed auto dealer is understanding the requirements you must meet in the state where your business is located. Each state has varying requirements for car dealers which may include detailed information about your dealership type and location, the type of vehicles you plan to sell or buy, and specifications for outdoor dealership locations.

You can find out your specific requirements for getting an auto dealer license by visiting your local Department of Motor Vehicles or Department of Licensing. This resource also provides detailed information about what you can expect with state requirements for getting your car dealer license.

Determine Your Dealership Type

When getting your auto dealer license, it is also necessary to select the type of dealership you want to operate. In today’s digital environment, you may seem the opportunities with operating an online dealership, or you may want to go a more traditional route with a physical location. In either case, an auto dealer license is likely required.

You will also need to determine if you want to sell new or used vehicles, or a combination of the two. New vehicle dealerships may have different requirements than used car lots, so it is necessary to know which you plan to pursue before continuing on to the next step.

Complete the Auto Dealer License Application

The next thing you need to do is complete your auto dealer license application. This can take some time as it may require you to provide detailed information about your business, yourself, and financial records. Some states also require auto dealers to submit to a background check as well as a review of the potential dealership location for physical lots. Take the time to follow the instructions provided on the auto dealer license application so you aren’t delayed by missing a requirement.

Secure Your Auto Dealer Bond

Nearly all states require auto dealers to have an auto dealer bond. This is not insurance, but instead works as a type of protection to help safeguard customers when they purchase a new or used car from your business. If something goes wrong or your business practices aren’t in line with state regulations, a customer can file a claim against your bond to recoup losses.

Fortunately, securing your auto dealer bond is not a lengthy process. You can work with a surety agency to determine your bond amount, the cost of your bond, and submit an application all online or over the phone. Once approved, your auto dealer bond certificate is sent to you directly. As a note, an auto dealer bond is a required cost of doing business, but working with the right surety agency and having your business and personal documents in order will help you save on this expense.

Submit Your Paperwork

The final step in getting your auto dealer license is submitting the required paperwork, including your auto dealer bond certificate, to your state’s licensing agency. They will review your business details and, if you have followed the steps above, provide you with your license once approved. Once your license is in hand, you can start working as an auto dealer in your state, helping customers get the vehicle they need and making a profit in the process.

Eric Weisbrot is the Chief Marketing Officer of JW Surety Bonds. With years of experience in the surety industry under several different roles within the company, he is also a contributing author to the surety bond blog.

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5 Easy Steps to Getting Your Car Dealer License