There are six kinds of car dealers in the States – the independent dealer, the franchise seller, service facility, wholesale dealer, auctions and salvage. To be able to enter the business of Car auctions, you must furnish the necessary requirements and know the process on how to apply for auction license specifically for car auctions. Car auction sellers are authorized to sell used cars by bidding and not through retail selling.
The first step on how to apply for auction license is to know initially, who to consult with your plans. Yes you may know a colleague or a friend or a relative who can guide you through the ins and out of selling vehicles through an auction but the first person you should ask is your local department of motor and vehicles. It is always wise to know that auction license application regulations vary from state to state, so always, consult your local motor and vehicle department.
You will need to furnish some forms that cost around $300 per location. Also, you can also check out the website of your respective state. There are usually very detailed instructions and requirements for applying dealer and auction licenses.
Starting this business will entail a lot of investment and financing. For auction dealers, be prepared to furnish a bond or a bank credit not less than $25,000 for insurance and security reasons and $10,000 for personal insurance. Should you need to apply to other departments to arrange financing, you need to secure permits from them too. For other states like Texas, one must secure a permit from Office of the Consumer Credit Commissioner for these purposes.
Once you have secured the financing, you will need to secure the physical location where you will be selling your wares. This physical business location may either be owned or leased. Ideally, the location must be a warehouse or an open space that is not in anyway the same address as your place of residence. If you decide to auction your vehicles to the public, then make sure that your location is accessible. For a retail dealer, your location should have at least five paved parking spaces. The space must also have an office and telephone line.
A pre-licensing car dealership training syllabus must be completed by any one who aspires to apply an auction license.
Apart from what were mentioned above, you must not forget to furnish copies of important documents such as registration of official business name, sales tax number, corporate papers and employer identification. These are important steps on how to apply for auction license.
Passing the exam and meeting all the requirements are all important steps on how to apply for auction license and getting your license approved. Getting an auction license is important especially if you will be selling five cars annually. Don’t make a mistake of not applying for a license or else, a misdemeanor case may be charged.
Applying for auction license, Car dealership license, Requirements for car dealership license