How to Get a Used Car Dealers License

Taking Initial Steps to Be Ready to Apply

1. 
   Decide what type of license you need. In many states, the application process and the license you obtain may vary based on the kind of vehicle that you wish to sell. Some options that you may have to consider cover a wide range:^[1][2]

   1. New or used
   2. Cars
   3. Motorcycles
   4. Boats
   5. Trailers
   6. Motor homes
   7. Wholesale (as opposed to individual retail sales)
   8. Emergency vehicles
2. 
   Study your state's application process. The application process alone for obtaining a car dealer's license is extensive.^[3] Some states, such as Texas or California for example, publish a car dealer manual that explains the business of car sales, as well as the application process. Find out from your state's Department of Motor Vehicles if such a guide is available, and then take the time to study it.
3. 
   Prepare your establishment. In many states, as part of your application, you must already have an established business location. For example, in Washington, you are required to have an enclosed building, with a fixed, permanent, exterior sign, a phone number listed in directory assistance, and minimum business hours for at least five days a week.^[4] New Jersey adds particular requirements that you must be able to demonstrate that you have a desk, chair, landline telephone, and a safe for storing documents.^[5] Indiana sets requirements on the square footage space that you need for displaying vehicles.^[6] You will need to research the minimum requirements for your state so that your location is ready when you apply.
4. 
   Prepare the paperwork. In addition to the application form itself, most states have a variety of other forms that you must submit. Check your state's Department of Motor Vehicle web site for the complete requirements. Some examples of the additional work you must prepare include:

   1. Zoning Approval Form (Maryland^[7])
   2. Sales Tax Certificate of Authority (New Jersey^[8])
   3. Corporate filings from the Secretary of State, if applicable to the business (Ohio^[9])
   4. Child Support Certification Form (New York^[10])
   5. These are just examples. Check with your state for specific information.
5. 
   Take care of insurance and bonding. In most states, in order to operate as a car dealer and obtain a license, you must show that you are adequately insured. The insurance is to protect the business from loss related to the inventory, and also to protect individuals from accident while they are on your property. Each state sets its own limits and requirements for insurance amounts.^[11]
6. 
   Prepare the necessary fees. Each state has its own system of fees that go along with submitting and obtaining a dealer's license. In some cases, such as New York, the fee is a set amount.^[12] In other states, like Ohio for example,^[13] the fee may vary depending on the size of the business you intend to operate.
7. 
   Obtain the necessary background check. In many cases, along with your application, you will have to submit a criminal background records check. In some states, this will include fingerprinting and reference checks. These processes can take some time, so begin working on this well before you wish to submit your application.^[14]