Acquire your used car dealers license and pay low overhead
Thank you purchasing the program on how to acquire a used car dealers license, and pay low overhead. The information your about to receive is very valuable, and worth every penny you paid for it. Today is your lucky day. You're not going to have to learn the hard way like I had to.
I'm about to squash the myth that you need to get a car lot in order to get a used car dealers license. Lot's of people never get their license because there afraid there going to have pay a ton of overhead, and that it's too risky.
I'm going to tell you how I was able to get my license in California. The DMV in each state has different regulations. I'm not sure how different or similar each states rules apply to acquiring a used car dealers license. Some states can make it easier some harder. If you can't apply this information where you live, I'll reimburse you your money.
In California if you get a retail dealers license you can both retail, and wholesale cars. Retailing is selling to the public, and wholesaling is selling to other dealers. Getting a wholesale license is much easier because you don't have to have a display area. Wholesalers can only sell to other dealers. In order to get a retail license you have to have a display area. Some people will get their wholesale license, and sell to the public anyway. If they get caught they'll get arrested.
What most people don't know
In California, the minimum size your display area can be is two parking spaces. You can get your license by having an office in a small building and having a designated two parking spaces for your display area. Thats it! you don't have to have a large lot, and pay $3500 to $5000 a month in rent. All you need is your office, and the two parking spaces! Your office, and display area will have to meet certain requirements though. You can also have additional display areas within a radius of 1,000 feet from your office without having to get a separate license.
Sign
Your going to have to have a sign made. Every such sign erected or posted, on an established place of business, shall have an area of not less than two square feet per side displayed and shall contain lettering of sufficient size to enable the sign to be read from a distance of at least 50 feet. This section shall not apply to a dealer who is a wholesaler involved for profit only in the sale of vehicles between licensed dealers. Have your sign made at a place like Kinkos. Make sure all the required information is there.
Where to keep your vehicles
You can have two of your cars parked in your display area, and the rest of them parked in a storage facility or on the street. You can park your cars on the street with current registration. If you have more than two cars with expired tags you'll have to rent some more parking. You'll be doing most of your advertising over the internet since you wont have a large display area on a major street.
With the dealers license you'll be able to sell the car at a higher retail price because you'll be able to offer financing. Most well known finance companies like Fireside bank, and Westlake financial will not work with a dealer working in an office with a two car parking display. They work with dealers that have lots. You'll have to do in-house financing, or establish a relationship with a smaller finance company.
Meeting zoning requirements
You have to find an area where the city will allow auto sales. If you see a potential place to rent an office, and set up a display area, you'll have to go to the city and find out if they allow auto sales in that region. Part of your dealer application package is having the city sign A DMV form called "property use verification form." If the region you want to sell cars is zoned for auto sales, the city will sign the form for you.
Look on craigslist for offices for rent. Check out different places, and talk to the owner or property manager. Not only will you be renting an office but you'll also have to rent two parking spaces for your display area. The parking spaces shouldn't be anymore than $75 a piece. You'll also have to make sure it will be alright with the owner of the building to put up your sign. You have to have a sign on the building with your dealership name, and address.
You can't have two different businesses in the same office
Whatever office you get you can't share it with another business. Say you have a friend who wants to get his dealers license too. You can't have two different dealerships in the same office. It doesn't matter how many rooms are in the office. You can't go through one business to get to the other.
Office requirements
Shall be located on the ground floor, and shall be so constructed as to provide a direct entrance into the room or rooms from the exterior of the building. If the office you're interested in is not on the ground floor forget it. You can't have it on the second floor even if the entrance is from outside. Have you noticed that all entrances to dealerships are from outside? Wholesalers, and autobroker's shall have an office, but a display area is not required. The established place of business of an automobile dismantler shall have an office and a dismantling area located in a zone properly zoned for that purpose by the city or county. Make sure you're aware of all the requirements before you sign a lease on an office.
DMV Inspector
You know how the DMV is, they just treat you like another number. DMV inspectors generally hard to get a hold of so you'll have to be persistent. Go to the DMV website to find out who the DMV inspector is in your area. Your local DMV inspector is the one who approves your license.
Bond
You'll will have to get bonded to get your license. If you have poor credit it'll be very difficult for you to get the bond. You'll have to go through a lot of red tape, and you'll have to pay a high annual fee. If you have poor credit don't be discouraged. Find a partner to get the license, and then you can get a salesman's license under their dealership. You'll have all the same privileges.
