How To Get A Dealer License For Car Auctions

What’s A Florida Car Auction License

The FLHSMV issues ten different types of motor vehicle, recreational vehicle, and mobile home dealer/broker licenses. If you want to sell vehicles at an auction, the type youll need is the vehicle auction dealer license.

With this license type, you can legally hold auctions at which vehicles are sold to the highest bidder. You can sell recreational vehicles at auctions with this license type, too.

But there are a couple of important caveats here. First, the buyers at your auction need to be licensed motor vehicle dealers. Secondly, if you plan to sell vehicles for retail price at your auction, youll need to get a vehicle independent dealer license, too.

Decide On A Dealer License Type

California has two types of Dealer licenses for selling pre-owned vehicles Retail and Wholesale. A Retail Dealer License permits you to sell vehicles to the public, other Dealers, or at auctions. Retail Dealers are required to have an approved office and car lot where they are allowed to display vehicles for sale. A Wholesale Dealer License permits you to sell to other Dealers or auction but not to the public, in California. The DMV allows Wholesale Dealers to operate their business from a residence and are not required to have a commercial office or car lot. Some Wholesale Dealers work in partnership with a Retail Dealer who has already met the States requirements. Essentially you would be working as a Dealer under a Dealer to sell through to consumers. Both Retail and Wholesale Dealers may buy vehicles from any source including Dealer-only auctions.

Prepare & Submit Your Application

For either license type, youll need to complete a Used Dealer Application. The DMV has a great Checklist that details everything you need to include with your application. We recommend that you drop off your completed application in person at your nearest DMV Occupational Licensing Office. Youll meet your local DMV Inspector there and can set up an appointment for your location inspection. We have an excellent program that includes all the required DMV forms and step-by-step video instructions on how to complete them. Application Forms & Instructions

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Types Of Dealer Licenses

Florida has 10 types of dealer licensing, each with different auto dealer license requirements and dealer license application forms. The licenses are listed below. You can find further details for each license on the Florida Department of Highway Safety and Motor Vehicles FLHSMV official website.

• License Type VI: Vehicle Independent Dealer
• License Type SD: Salvage Dealer
• License Type VF: Vehicle Franchise Dealer.
• License Type SF: Service Facility
• License Type VA: Vehicle Auction Dealer
• License Type VW: Vehicle Wholesale Dealer
• License Type DH: Mobile Home Dealer
• License Type BH: Mobile Home Broker
• License Type RV: Recreational Motor Vehicle Dealer
• License Type RU: Recreational Used Motor Vehicle Dealer

Anyone who wants to sell automotive vehicles at an auction in the state of Florida needs to be appropriately licensed by the Department of Highway Safety and Motor Vehicles or DHSMV. While there are six different types of motor vehicle dealer licenses in Florida, only the licenses below allow a dealer to sell their motor vehicles through an auction process:

• License Type VW: This allows the dealer or licensee to buy and sell wholesale with other dealers or through auto auctions.

• License Type VA: This license is specifically for dealers who buy and sell cars at an auction, however, not on a retail basis.

What Documents Are Needed To Get A Car Auction License In Florida

Getting all the documents for licensure can be confusing, so it pays to collect all the forms at once before starting the application process. The main document you need for an auction license is the Florida Dealer License Application Form .

Complete this form and include:

• Your fingerprints.

• Your certificate of completion for your dealership training course.

• Proof that you’re owning or leasing an office.

• You must also include your business registration form and your surety bond. Since motor vehicles are dangerous to transport, Florida requires dealers to get garage liability insurance with single-limit liability coverage of $25,000 and personal injury protection coverage of $10,000. Make sure you include proof of this insurance with your Florida Dealer License Application Form.

Finally, you may need to include forms related to your business structure, such as Articles of Incorporation if you’re a corporation, a Partnership Agreement if you’re partnering with someone else, and an Operating Agreement with Articles of Organization if you’re a Limited Liability Company. Proof of how you plan to elect corporate directors, such as corporate papers or meeting notes, may also be required.

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Wholesale Motor Vehicle Auction Dealer

A person who is in the business of providing auction services solely in wholesale transactions to motor vehicle dealers license by the state of any other jurisdiction, and who neither buys, sells nor owns the motor vehicles he or she auctions in the ordinary course of business.

Required Application Documents:

• Transaction Privilege Tax License
• Criminal background check

**Each partner and each applicant who owns 20% or more of an entity and who seeks a new license must provide a personal history form and fingerprint card to enable Motor Vehicle Division to conduct a criminal records check.

The criminal records check may not apply if the application is for a subsequent license, or each partner and each applicant owning 20 percent or more of an entity has completed a criminal records check through MVD during the past five years, or is currently licensed.

An applicant, as referenced above, who has been convicted of fraud or an auto-related felony within the last ten years or any other type of felony within the last five years will have his or her license application denied.

If application is denied, MVD will notify the applicant in writing of the denial and the grounds for the denial. The applicant may appeal the denial by requesting an administrative hearing and, if the denial is upheld, appeal to the Maricopa County Superior Court. See ARS 28-4365 for more information.

Obtain The Application Checklist

To obtain the application checklist, contact the office of your local DMV or refer to their website for the requirements. I have included appropriate links to the various DMVs and their dealership license requirements. So, when you finish reading this article, click the link with the name of your state to redirect to your DMVs site to obtain the downloadable forms and other requirements as I list below.

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The Car Auction License Requirements

While licensing requirements for car auction dealers differ from state to state, a majority of the requirements are similar. Of course, make sure to check with your Department of Motor Vehicles to learn more about how to get a car auction license in your state.

That said, you can expect to have to meet the following requirements.

Contact Your Local Dmv Or Dol

Every state has individual requirements for becoming a car dealer. Your local DMV or DOL will know what those requirements are, so contacting them is the first step.

Your state will familiarize you with what is needed to get your dealer license. They will also give you any necessary paperwork to fill out and provide you with further guidance.

Recognize that there are different types of dealer licenses to apply for:

• New vehicle dealer license

• Passing a background check

Worried about a felony or conviction on your record? Check out this post on Getting a Dealer License With a Felony.

Some states might require further steps, like passing a car dealer license test or providing a hazardous waste generator number if you have a repair shop on site.

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How Do You Get A Dealers License Without A Lot

understandably, this is a question aimed at those who want to do the right thing and buy vehicles legally.however, they hope that you’ll notice that it’s not just about money. if the only qualification was $25 per car and they suddenly had all their own cars legit and registered imagine how much fuel we’d be wasting as would-be car thieves drive around looking for targets.

Complete Car Dealer License Application

Your local DMV will provide you with the proper car dealer license application for your business. The U.S. Small Business Administration can be a valuable asset in this part of the process too. Before sending in your car dealer license application, be sure to double-check that you filled out all areas and signed in all the necessary places. Applications can take a long time to process, and missing information only lengthens the time it will take to get approved.

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Even Dealer Auctions Are Cracking Down Onout

At my local Manheim dealer auction there is a huge sign that says:

“OUT OF STATE DEALERS: If you purchase a vehicle, it MUST be exported outside of this state.”

Not all auctions have this policy, but the trend is for more and moreauctions to follow this rule. The auction does this per the state’srequest because the state knows most out of state dealers who buy, will try tosell that car in the state the car was purchased in. This is aback-door method that the state is using to further crack down on unlicensedauto dealers.

What this means is that the dealer auction will NOT release the car to youbecause you have an out of state license – you need to show the auction a billof lading from a trucking company that says the car is going to be transportedout of state. This can be MAJOR problem if you have an out of statelicense! Do it the right way – get a dealer license in your OWN statein your OWN name.

Complete An Automotive Training Program

You have to register for a dealership education program with any of the automotive management institutes online. Below are some of the best platforms to complete the dealer education program.

• org

A dealership education certifies and trains you on how to manage the business.

A training program costs between $600 and $3,000 depending on the institute and the training package you select. Dealership programs take a few hours to a month to complete depending on the package, especially if you sign up for an online course. Note that you must pass the dealer test to be certified.

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There Is No Dealer Auction License

I receive calls and emails asking me, How do I get a dealer auction license? Heres the answer.

Let me explain where the cars at the auction come from.

Then Ill show you how to get an equivalent of an dealer auction license so you can attend all the wholesale dealer only auctions.

There are over 250 dealer only auctions around the country. They are closed to the public. Last year over 10 millions vehicles were sold at these auctions!

Here are the sources of these vehicles.

So thats where the vehicles come from.

You can see in bad economic times when these sources are not producing as many of these used vehicles, the supply goes down. In bad economic times there are fewer new cars purchased by consumers so the demand for used cars goes up. Supply is down and demand is up which equals higher prices for used cars.

So now how do you get into auctions? The majority of the auctions use a service called AuctionAccess. This is from their website..

AuctionACCESS is the number one dealer registration system in North America. In-person or online, AuctionACCESS gets you in the lanes quickly, easily and efficiently.

After you get your dealer license, you register with AuctionAccess and they issue you an access card to enter the dealer only auctions that use their registration service.

Auction Access Card

So there is no dealer auction license, you get access to dealer auctions by being a licensed dealer or an employee of a licensed dealer.

Used Motor Vehicle Dealer

A person, other than a new motor vehicle dealer, who buys, sells auctions, exchanges or offers or attempts to negotiate a sale or exchange of any interest in, or who is engaged in the business of selling, seven or more used motor vehicles in a continuous 12 month period.

*Used motor vehicle dealer does not include a wholesale motor vehicle auction dealer or public consignment auction dealer.

Required Application Documents :

• Criminal background check

**Each partner and each applicant who owns 20% or more of an entity and who seeks a new license must provide a personal history form and fingerprint card to enable Motor Vehicle Division to conduct a criminal records check.

The criminal records check may not apply if the application is for a subsequent license, or each partner and each applicant owning 20 percent or more of an entity has completed a criminal records check through MVD during the past five years, or is currently licensed.

An applicant, as referenced above, who has been convicted of fraud or an auto-related felony within the last ten years or any other type of felony within the last five years will have his or her license application denied.

If application is denied, MVD will notify the applicant in writing of the denial and the grounds for the denial. The applicant may appeal the denial by requesting an administrative hearing and, if the denial is upheld, appeal to the Maricopa County Superior Court. See ARS 28-4365 for more information.

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How To Get An Auction License In Florida

• You first need to take the pre-licensing education that usually takes 16 hours. It can be taken online at your place as well. It is to get the certificate at the end, which is attached with the application.
• Then you need to select a fingerprint service provider. Note that the Florida Department should approve it of Law Enforcement .
• You will need a surety bond along with liability insurance. Garage liability insurance also works. The minimum amount of bodily injury is $25000, and property damage is $10000
• Then you need to register yourself to start your business legally. It should also be attached with the application
• You will need a place where you can hold your auctions thus buy your dealership location.

Buying Cars At Dealer Auctions

Obtaining a dealer license can be a time-consuming and expensive endeavor, but those who do so gain access to a bounty of vehicles that may serve as the basis of a profitable business.

With that said, keep in mind that cars bought at dealer auction are also subject to extra auction fees and transport costs, so that low hammer price isnt entirely accurate. And, while sellers are required to disclose significant issues , that seemingly pristine late-model SUV quickly rolling across the auction block may be hiding a host of costly gremlins.

As with all auction vehicles, it’s best to bid with a buyer beware mentality.

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Determine Which Type Of License You Need:

• New Motor Vehicle Dealer: Buy/sell new and used motor vehicles
• Used Motor Vehicle Dealer: Buy/sell only used motor vehicles
• Automotive Recycler: Acquire motor vehicles for dismantling, selling, or disposing of their parts
• Broker: Arrange or assist in the purchase of motor vehicles, in exchange for a commission or a fee
• Public Consignment Auction Dealer: Conduct public vehicle consignment or provide related services
• Wholesale Motor Vehicle Auction Dealer: Conduct vehicle auctions or provide related auction services on a wholesale basis
• Wholesale Motor Vehicle Dealer: Sell to licensed motor vehicle dealers on a wholesale basis

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What Documents Are Needed

As you can tell from perusing the application itself, you need to send in quite a bit of paperwork to complete the process and get your Florida car auction license. Beyond the fee, you need to include:

• Proof of identification
• A copy of your lease or proof of ownership for your dealership location
• Proof of your electronic fingerprints
• The certificate of completion you got when you finished your 16-hour pre-license course
• Your original surety bond

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Purchase Motor Vehicle Dealer Bond

Not sure how to get an Auto Dealer Bond? Use this interactive tool to help you out.

Almost every state will require you to purchase a car dealer bond. A car dealer bond is a type of surety bond that protects your customers. If your customers feel you are running an unethical business, they can make a claim against your bond.

The dollar amount of the bond will vary state to state, and the cost of the bond will vary on your individual and business financial credentials.

The best way to find out what you’ll pay for your bond is to get a free quote.

Do not overlook this step. Obtaining a car dealer bond is vital to ensuring your customers that you will stand in good faith behind your actions. The bond guarantees your customers they will be protected should something go awry in a business transaction.The Surety Solutions blog has individual blog posts on how to obtain a car dealer bond for almost every state. Check out our tutorials to get started.

Wholesale Motor Vehicle Dealer

• Criminal background check

**Each partner and each applicant who owns 20% or more of an entity and who seeks a new license must provide a personal history form and fingerprint card to enable Motor Vehicle Division to conduct a criminal records check.

The criminal records check may not apply if the application is for a subsequent license, or each partner and each applicant owning 20 percent or more of an entity has completed a criminal records check through MVD during the past five years, or is currently licensed.

An applicant, as referenced above, who has been convicted of fraud or an auto-related felony within the last ten years or any other type of felony within the last five years will have his or her license application denied.

If application is denied, MVD will notify the applicant in writing of the denial and the grounds for the denial. The applicant may appeal the denial by requesting an administrative hearing and, if the denial is upheld, appeal to the Maricopa County Superior Court. See ARS 28-4365 for more information.

• Articles of Incorporation **Unless filing as an individual or general partnership. General Partnership agreement must be submitted.
• Lease Agreement , Copy of Deed if applicable **If office is not located in the home.
• Plate Application
• Physical Location Pictures – Must include: All four sides of building, entire lot, Office area, secure file cabinet, business sign ,and days/hours of operation

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