How to Get a Used Car Dealer's License

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A lot of special privileges come with having a used car dealer's license. You can go to exclusive "dealer only" auto auctions, use dealer transport plates on your cars, and even buy and sell cars quickly to earn extra money. The exact procedures vary slightly from state to state, but here are the basic steps that you need to take in order to obtain your dealer's license.

  • Get your credit in the best shape possible. This is important when starting any kind of business, especially in automotive sales where you'll most likely need to be bonded and insured. In order to qualify for a bond and commercial insurance at a reasonable rate your credit score will need to be relatively good, so the sooner you can get started working on this the better.

  • Secure a commercial property that has enough space for at least ten cars. Having a car lot or commercial property is one of the biggest hurdles that you need to jump in order to get your dealer's license, and nearly all states require some form of this to varying degrees. If you can find a business partner you can cut your costs substantially, but either way you'll need to have a property lined up before you apply.

  • Contact your state to get the specific application papers, as well as all of the information about their exact requirements. Most states have an entire informational packet that includes the application, and can be picked up in person at the agency (usually the DMV) that handles the dealer's licenses.

  • Complete the application, make sure that you meet all of the requirements, and return it promptly to the proper state agency. It's important to obtain bonding, insurance, and anything else your state requires you to have. Generally, you will be required to be licensed, bonded, insured, have a commercial property, and not owe any outstanding debt to your state's department of revenue. If you fail to meet any of the specific requirements that your state has laid out your application may be denied, so make sure that you are very thorough and don't miss anything.

  • Schedule and complete any necessary property inspections. Most states will send an inspector out to verify that your lot or commercial property complies with their guidelines. This is generally the last step in the approval process, so be as proactive as you can about getting this done.

  • Review your license and make sure that your information is correct. You'll need to read over your license along with any other documents from the state to make sure that your information is accurate, and notify the proper agency to make any corrections if your find a mistake.

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