How to Get a Car Dealer License to Sell Cars

Each of the 50 states has its own specific guidelines to get a car dealer license. While each state may have variances, there are certain common things that you must do in each state to get your car dealer license. Here are some of the things you might expect to have to do to get a car dealer license.

Instructions

1. Get your legal paperwork in order before you even begin the application process. You need a federal identification number. This is different than your Social Security number. You also need a sales tax number.

2. Draw up any legal forms of incorporation or partnership and get them signed by the necessary parties. The same is true if you plan to operate as an LLC (Limited Liability Company.)

3. Apply for your surety bond. This may take a while to come back, so allow plenty of time before you plan to open your business. Also take out liability insurance for your building and lot at this time.

4. Fill out the paperwork required by the Department of Motor Vehicles. Be sure to proofread your application when you finish because if you forget something, it can't pass. Remember to sign and date the application.

5. Send in your fingerprints to the appropriate authorities as part of the application. This provides the state a background check on any past legal problems you might have encountered. Without a clean background check, you may not get a dealer license.

6. Set up your place of business. Make sure it complies with local zoning laws. Expect an inspection, usually from a representative from the State Highway Patrol. You need a visible sign on or near your door that clearly states your hours of operation and your phone number. Depending on the state, you may have to provide proof that you only do business as a car dealer from the building. You may also have to provide proof that you have safety stations set up as well as restroom facilities for your customers.

Tips & Warnings

• Some, but not all, states require you to take and pass a dealer license test.