Permits and licenses to start a car buying and selling business

If you want to open a car buying and selling business, you should know that you will have a car dealership and as such will sell used cars.

Therefore, you must comply with the Federal Trade Commission regulation, which regulates used cars.

Well, car dealerships that sell or offer for sale more than five used vehicles in 12 months are required to comply with their regulations. For this reason, before starting to operate your business you need to know everything that has to do with the legal aspects.

Licenses to start a car buying and selling business

In principle, if you want to start a car buying and selling business you must apply for a new and used car dealership license or a used car dealership license if you only plan to sell used cars and you will limit yourself to this type of sale.

Distributor License

When you apply for a dealer license you will be subject to a criminal background check, because in the event that you have received an arrest sentence, you can submit a shortened application for a fee of $175.

However, to make the application you will need to buy a bond, an insurance policy and establish a place for your business, but keep in mind that depending on the circumstances, it is likely that upon conviction, your application may be denied.

But if you don’t have any criminal problems, continue with the application and depending on the type of vehicle you want to sell, you will be asked for a motor vehicle dealership license or a used motor vehicle dealership license.

Documentation required for the license of business dealer license car buying/selling business

When applying for the distributor’s license, you must submit the following documentation:

  • A copy of the business license issued by the appropriate entity in your county.
  • The resale permit.
  • The declaration of the fictitious name of your company in case your surname is not in the commercial name of the business.
  • The lease of the commercial premises.
  • Photograph of the main entrance of the business.
  • Photograph of the area where vehicles can be viewed.
  • A photograph of the facilities in general.

8, The original certificate of completion of dealer education in the event you sell used cars.

Trolley dealer license fees

When you apply for a dealer license, you must pay these fees:

  • The non-refundable application fee of $175.
  • The $1 family support program fee.
  • The $71 dealer plate fee.
  • New Vehicle Board charge of $300,

However, keep in mind that the latter charge applies only if you open a new car dealership, commercial, off-road or recreational trailer dealership.

If you need the fingerprint card, you will have to pay a $42 fee.

Commercial license

As a new or used car dealership or car dealer, you should know that you require a business license.

But first of all, keep in mind that each state has its own regulations regarding vendor licenses with different requirements.

However, in most cases you will have to follow the same steps.

Requirements to obtain the commercial license of a car buying and selling business

When thinking about starting a business of this kind, unless you sell your own used car to a third party, the state will require you to complete an application to sell a new or used car as an authorized dealer.

Some states even require a training program aimed at doing business so that you know the internal operations of the automotive industry.

Some, in turn, deepen the application process and require you to undergo background checks and fingerprints.

Well, the state needs to make sure you don’t have a criminal record while doing business with the public.

Additional documents: Your state may also require you to study your business by requesting additional documents such as: proof of insurance, a business certificate, a bond, franchise agreements, lease agreement, photos of the physical space of your business and may also require that your business premises have a operable telephone to locate you.

Steps to obtain the commercial license of a car buying and selling business

  • You should check to see if your state can offer you a manual from car dealerships and a guide like the state of California and Texas that offers this help to all those who want to enter professionally into vehicle sales.
  • Also, keep in mind that the name of the initial licenses for a business varies from state to state, so do an online or phone survey to find out the exact name of the form you need to fill out.
  • Once you complete the application, you will pay the license fee and send it along with the required documents.
  • Make sure you accept the payment method so that your application is not denied.
  • It is important to know that the average waiting time varies by state, so if you are in a hurry to start your business, you should keep in mind that you will wait several weeks or months until the application is processed.

Professional license

The Department of Motor Vehicles is responsible for processing the professional license application for the distributor and retailers.

It is also in charge of renewing the license, which must be carried out before the expiration date in order to avoid sanctions.

You must renew your license every year. However, after your initial license has been granted, as a distributor you must attend a continuing education program of no less than 4 hours every two years in order to renew your license, but you will be notified by the Department when you need to renew it.

Seller’s license

By acting as a car dealer and as an authorized dealer, you must obtain a license or permit issued by the DMV, as it is the Department that provides you with the forms for you to apply.

Honoring: When you file your application, you will be required to pay the Department certain fees such as:

  • A non-refundable application fee of $51 for the original issuance of the license.
  • In the case of renewal, the charge is also $51.

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