How Can You Become a Licensed Car Dealer?


Quick Answer

Becoming a licensed car dealer requires researching your state's specific regulations and requirements and following state licensing application procedures. Generally, states require applicants to submit numerous forms, such as dealer applications and forms that provide financial information. States commonly require that prospective car dealers obtain a surety bond through an insurance company. A business license and proof of commercial property rental may also be required.

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Full Answer

To obtain a detailed list of the requirements for your state, visit the car dealer licensing page on the website of your state's Department of Motor Vehicle website. States provide a listing of car dealer application forms and information about the application process, which may vary by state. The first step is deciding what category of license you want to obtain. As a car dealer, you can choose to sell new or used vehicles as a retailer or become a vehicle wholesaler.

A Class A new vehicle dealer license allows you to purchase new model vehicles and sell them to the public, and this license is typical for car dealerships who have franchise agreements with car manufacturers. If you wish to buy and sell used vehicles a Class B license is required. Wholesale used car dealers must have a Class W license and can only buy and sell vehicles with licensed car dealers. A Class D broker license is required to arrange vehicle sales transactions between buyers and sellers.

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