Millions of Americans purchase a car each year, with recent NADA data predicting an estimated 16.8 million will do so in 2019. Over the last decade, vehicle sales have steadily risen, given licensed auto dealers an opportunity to take on or increase local or online market share. As more customers flock to the lot for their next new or used vehicle, those wanting to get in on the potential business revenues can do with the right understanding of the licensing process.
Getting an auto dealer license allows a business or business owner to legally sell vehicles to the public. While there are several steps in the process which must be followed to stay in compliance with federal and state regulations, new auto dealers can get their license relatively quickly. Here are the steps to follow to get your auto dealer license – fast.
Check Your Local Requirements
If you want to get your new or used auto dealer license in a hurry, your first step is getting in touch with your local Department of Motor Vehicles (DMV) or Department of Licensing (DOL). These organizations provided the detailed guidelines you need to follow in order to get your auto dealer license successfully. You may be able to check these requirements online or you can simply make a call to gather this information.
Once you’ve touched base with the local DMV or DOL, you’ll need to make a choice on the type of auto dealer license you want or need. You can choose from the following:
- New vehicle dealer license
- Used vehicle dealer license
- Wholesale vehicle dealer license
- Motorcycle dealer license
Meet the Guidelines
The second step in the process is meeting the requirements of your state’s auto dealer license process. For some regions, this list can be lengthy, so it is important to pay close attention to the details if you want your auto dealer license fast. Here are a few items you may need to complete before getting your license:
- Registering your business with the state
- Understanding the meeting zoning requirements for the vehicle lot
- Complete pre-licensing education or training
- Secure the right insurance for your lot
- Pass a background check
These requirements can take time to fulfill, but knowing what they are is half the battle.
Complete Your License Application
Next up is filling out the information requested on the auto dealer license application. Most states have a paper application you need to complete that includes questions about you, your business, your financials, and the requirements listed above. You aren’t yet ready to submit your application once you have completed it, but you’re well on your way to getting your new or used auto dealer license when this step is done.
Get Your Auto Dealer Bond
As part of the licensing process, you’ll also need to look into your state’s requirements for an auto dealer bond. This surety bond offers protections to your customers should your dealership cause them financial harm due to bad business practices. A surety bond for auto dealers comes at a cost, so be sure to understand how this fits into your budget before applying. Select a surety agency that works with many different auto dealers to make the process smooth. Many bond agencies allow you to submit an application online, and approval can be quick for those who have their financial and credit ducks in a row.
Submit Your Paperwork
Once the four steps mentioned above are complete, you are ready to submit your paperwork, including your license application, proof of insurance, business details, and bond certificate. Send in any additional documentation your state requires along with your application to ensure it is processed quickly. The DMV or DOL will inform you of your application’s status and approval once these pieces of information are received and reviewed.
After following through with these steps, you’re ready to start selling new or used vehicles to potential car buyers. Be sure to have a plan in place to meet the requirements set out by your state’s motor vehicle or licensing department before submitting your application, and don’t cut corners like failing to get your auto dealer bond. Taking the time to do things the right way will help you get your auto dealer license fast.
Eric Weisbrot is the Chief Marketing Officer of JW Surety Bonds. With years of experience in the surety industry under several different roles within the company, he is also a contributing author to the surety bond blog.