How to Get a Used Car Dealer License and What Are The Benefits: A Complete Guide

By Ryan Skidmore | May 1, 2019

If you’re looking to open a used car dealership, you’ll first need to get a used car dealer license. How to get a used car dealer license varies slightly depending on the state you’re in, but most states have the same general process. Having a license will allow you to sell cars without limit and get exclusive perks. Read on to learn more about how to apply and about the benefits of having a dealer’s license.

The Process

1. Learn Your State Requirements

Every state has slightly different requirements to apply for a dealer’s license, so the first step is to make sure you know exactly what documents you need to gather, or what paperwork you need to fill out to get the title of a used car dealer. Make sure you are educated on which type of license you want to apply for.

2. Get Started On Your To-Do List

Once you know your state requirements, it’s time to get to work! Create a to-do list and tackle one thing at a time, including getting application forms, starting a background check, applying for a small business license, and whatever else is applicable in your state.

3. Complete Your Application

Complete your application, complete the rest of the steps, then submit your application without delay.

4. Buy a Car Dealer Bond

A car dealer bond is a type of insurance you’ll need in order to protect yourself and customers who purchase a used car from you. Apply for the bond before you submit your application. The bond will likely be granted if you have a good credit history.

5. Submit Your Application

Don’t delay getting your application in once you’ve completed all the steps. Every state has different processing times, but it could take several months before you’re officially licensed

For more information see this article from wikiHow.

Benefits of Having a Dealer’s Licence

1. Start Your Own Business

As a used car dealer, you’ll become an entrepreneur with the potential to start a successful dealership of your own. Those with a used car dealer license can become savvy small business owners and enjoy certain tax breaks and write-offs.

2. Earn a Profit Selling Cars

The main reason anyone gets a used car dealer license is to sell cars without restriction. Most states have a cap on how many cars you can sell without a license, but you’ll be able to sell as many cars per year as possible with your dealer license.

3. Get Access to Car Auctions

Auctions are the best place to get great cars at a lost cost, but they’re usually only accessible to dealers. One of the biggest benefits of having a car dealer license is being able to attend all the auctions you want.

4. Enjoy Special Insurance Perks

Those with a used car dealer license get four dealer plates that will protect your vehicles under special insurance. This usually waives car registration and other potential fees.

5. Save Money on Your Personal Vehicle

If you’re looking into getting your dealer license, you probably love cars. Save money on the car of your dreams by buying it at a lower price at a dealer-only auction.

6. Become an Auto Broker

After you’ve earned your used car dealer license, you’ll be eligible to become an auto broker and start helping people purchase new cars as well as used vehicles.

7. Buy Discounted Car Parts

As a used car dealer, you won’t just save money on cars—you can also purchase car parts for up to 20 percent off and enjoy some tax-free purchases with your license.

Learn More Today

By following these steps, you’ll have everything you need to know about how to get a used car dealer license, as well as the benefits of having a license. Learn even more by checking out this complete guide to opening and managing your own used car dealership.