Q:

How do you obtain a dealer license?

A:

Quick Answer

The requirements for obtaining a vehicle dealership license are governed by the Department of Motor Vehicles but vary from state to state. The specific requirements for each state are listed on the DMV website.

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Full Answer

The sale of new and used vehicles is a closely monitored market in the United States due to the high value of the merchandise and the potential for criminal involvement. All states undertake the licensing of dealers carefully, and applications can take as long as 120 days to process.

Most states require general information, such as an official business certificate and proof of identity, before granting a dealership license. However, some states have unique requirements. New York State DMV, for instance, requires a surety bond of $10,000 to $50,000 and proof of insurance covering all vehicles to be traded.

The state of California requires all applicants to undergo a background check for criminal behavior. The state also requires applicants to complete a one-day training course on subjects such as unlawful dealer activity, sales taxes, warranties, contracts and truth in lending. In many states, DMV inspectors visit the proposed business premises to inspect details such as the size of the lot, the size of advertising sign and the arrangement of phone lines.

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