Why participate in dealer car auctions?
How do dealer car auctions work?
Where can I find dealer car auctions?
What is the purpose of a car dealer license?
How much does it cost for a car dealer license?
Types of car dealer licenses for car auctions?
TLDR: Dealer car auction is a hidden gem for buying quality vehicles at below-market price. However, to participate in a dealer car auction, a dealer license is required. Getting a dealer license can be a complicated process at a first glance. However, this article breaks it down into simple steps you can follow. You first need to decide on the type of dealership you plan to operate, then you can simply follow the defined application process for your dealership, subject to specific state requirements
Car auctions is a medium where cars are traded between participants. There are many different types of car auctions, but all auctions can be categorized into two categories:
Dealer car auction is a specific type of private auction in which car dealers buy, sell or trade new and used vehicles. As an auto dealer, you don’t want to miss car auctions.
Affordable Price: Price of cars at a dealer car auction tends to be much more competitive than other mediums
Exclusivity: cars sold at dealer car auctions are only available to dealers. Sometimes, you can find great cars at these auctions
At an in-person auction, prior to the start of the bidding, each vehicle to be auctioned is driven into the auction hall. Then, the auction participants will be given a few hours to inspect the vehicles up close. After the inspection period, the auctioneer presents each car on stage, describing its features to all the bidders. It is crucial to pay close attention to the auctioneer’s presentation because the statement of the presentation is a legally binding statement on the sale of the vehicle.
More often than not, there is more than one bidder for a car. Therefore, you should expect multiple bids on the same vehicle and the price would probably go up. Bidding happens when you raise your hand with a catalog and the process goes on until you are the only bidder with the highest bid. That’s when the hammer will be rang, which indicates that you have won the final bid and the car is yours. Once you won the bid, you are obligated to follow through with the purchase at the final bid price. Not complying with this requirement could lead to possible penalties or legal consequences.
If you are new to car dealer auction, it is a good idea to participate in a dealer car auction as a member of the audience vs bidder. Being an audience and seeing how the auction works really helps you prepare for your career as an auction bidder
There are many dealer-only car auctions. There are spontaneous live auctions or 24/7 online dealer auctions marketplaces. To find one near you, you can simply Google “auto dealer only auction near me”. Typically, you need to fill out an application online to register for the auctions. Below are some examples of dealer only auto auctions.
Many states require a dealer license to buy, sell or exchange new or used vehicles if you are registering a dealership and doing it professionally. In different states, there are different requirements when you need a dealer license. For example, the state of California requires anyone wanting to sell (or flip) even one car for profit to get a dealer license. On the other hand, individuals can sell up to four vehicles per year without a dealer license if all the vehicles are titled in your name before sell.
The dealer license ensures that the individuals licensed to sell, buy, and trade cars professionally understand the rules and regulations of the auto dealer industry in their states and follow these rules when conducting business
It varies per state. It generally costs close to $1,000 for a dealer license. For example, it costs $700 for a used car dealer license in Texas.
The main one-time costs of getting a dealer license includes the following:
The variable cost of getting a car dealer license is mainly the lease of your dealer lot.
There are many different types of car dealerships. Some dealership requires a license but some don't. Whether you need a license or not depends on the type of vehicles you intend to sell (used, new, salvage, etc.), the nature of your dealership (wholesale, independent, etc.), and state regulations where your dealership operates
1. Complete an online dealer education course, depending on the state
2. Take and pass a dealer examination
3. Decide on your dealer license type
4. Set up your business
5. May need to pass background check / criminal record check through fingerprint scanning
6. Lease a business building and lot with sufficient space. You may need to provide a copy of the lease agreement to the licensing department.
7. Some states, such as Florida, may require you to buy a garage liability insurance.
8. Obtain the dealer license surety bond
9. Apply and pay dealer licensing fee
Below you will find some additional resources on dealer licensing of the following states: