How to Get a Dealer License for Car Auctions

How to Get a Dealer License for Car Auctions: The Complete Guide

If your dream is to buy and sell vehicles at auction for profit, then getting a dealer license is essential. Without a license, you can’t legally participate in wholesale auto auctions and dealer-only sales.

But obtaining a dealer license does take some work. You’ll need to meet requirements set by your state’s Department of Motor Vehicles (DMV) and probably pass tests on vehicle sales laws. It can get complicated fast.

This guide breaks down exactly how to go from an auction outsider to an insider with a dealer license in your pocket. We’ll cover:

  • Types of dealer licenses available
  • Key steps in the dealer licensing process
  • License renewal info
  • Benefits of having a dealer permit

Types of Dealer Licenses

There are a few license options, each with different access levels to buying and selling vehicles:

  • Retail Dealer License – Allows you to buy/sell vehicles at wholesale, dealer-only, and public auctions. Gives access to the widest variety of inventory. Needed to operate a dealership open to the public.
  • Wholesale Dealer License – For buying and selling vehicles strictly between licensed dealers. Limits you to dealer auctions only. Easier to obtain than a retail license.
  • Motor Vehicle Dealer License – A general dealer license required for buying and selling vehicles commercially in most states. Can cover retail or wholesale activities.

As you’re planning your business, decide if you need to interact with the public or just deal at the wholesale level. That will help determine if a retail, wholesale, or general license is best.

Key Steps to Get Licensed

While state requirements vary, most include these core dealer licensing steps:

1. Submit License Application

Start by completing your state DMV’s dealer license application form. This will collect info on your business structure, finances, background, etc. There is usually an application fee too.

2. Get Business Registered

You’ll need to legally register your dealership as a business in your state, get a tax ID number, and obtain any required sales tax permits.

3. Pass Background Checks

Expect to go through credit checks and fingerprinting for criminal record searches before being approved.

4. Acquire Insurance and Bonds

Dealer general liability insurance and surety bonds that protect customers are usually required. This guarantees you run your dealership ethically.

5. Secure Dealer Location

Most states require proof you have an office, dealership lot, and display space meeting requirements before issuing a license.

6. Complete Dealer Education

Some states mandate completing an approved dealership education course on vehicle sales laws and regulations.

With all that handled, you can get your dealer license approved and become auction-eligible!

Renewing Your Dealer License

Licenses typically expire annually and must be renewed to stay active. The good news is renewal is simpler than the initial application process.

You’ll mainly fill out a renewal form, pay a renewal fee, show you still meet location and insurance rules, and possibly update any business structure changes.

As long as you stay complaint over your first year, the renewal should go smoothly. Just be sure to complete it before the expiration deadline.

Benefits of Having a Dealer License

Going through the licensing process takes dedication, but the payoffs can make it very worthwhile:

  • Auction Access – The #1 benefit is gaining entry to dealer-only wholesale vehicle auctions with huge inventory and pricing advantages.
  • Buy/Sell Vehicles Commercially – A license allows you to legally buy and sell an unlimited number of vehicles for profit each year.
  • Consumer Confidence – Being licensed proves to customers you are a legitimate regulated dealership they can trust.
  • Dealer Perks – From special auto finance rates to opportunities to acquire off-lease vehicles, dealers get VIP access.

For aspiring dealers, access to the wholesale market is huge. That makes attaining a dealer license well worth the effort for most.


In summary, working through the steps to get dealer certified takes dedication. But the rewards of wholesale auction access and running a bona fide dealership make getting licensed incredibly worthwhile. Use this guide to start your journey to auction success!

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Steve is a former licensed car dealer located in the State of Florida.  He has many years of experience buying, selling, and working on cars mechanically and started Autohitch to help buyers and Sellers navigate the complex lands of Car Buying.