Starting a car dealership involves more than just parking a few cars in a lot and putting "For Sale" signs in the windows. State motor vehicle departments regulate the industry heavily and require a detailed and comprehensive application process. While the specifics vary by state, there are several common rules. Knowing what to expect can help you expedite the process.
Instructions
1. Determine what type of license you need. States require different location requirements for different licenses. In California, for example, a dealership selling new and used vehicles must have a display area, a sign, an office and space for the cars.
2. Form your business entity, as necessary, and apply for any relevant permits and licenses regarding sales tax, seller's permits, employer identification numbers, zoning permits and any other required permit or license.
3. Find a suitable location for your business. Make a copy of the lease or deed. In Pennsylvania, for example, you must show the licensing agency that you will occupy the property for at least six months. Note that state laws require certain elements to be present at the location, such as adequate lighting in the display area, permanent enclosures and private office space.
4. Take photographs of each location requirement, as specified by your state's rules and regulations. Typically, states require you to take pictures of the office space -- including filing cabinets and records storage -- as well as pictures of your dealership's sign and the display area. Include a drawn diagram of your business's layout.
5. Apply for and obtain any required surety bonds. In Georgia, for example, car dealers must obtain a $35,000 surety bond.
6. Pass the required dealer education programs. Course requirements vary by state. In Iowa, for example, an applicant seeking a used car dealership license must take an eight-hour pre-licensing education program.
7. Submit to a criminal background check. You may need to arrange to have your fingerprints taken at a state-approved location.
8. Complete your state's car dealership license application. Application forms vary by state. In general, you must supply information about the business, its owners and include copies of any required materials such as location photographs and certificates of completion for dealer education programs.
9. Take the completed application to a notary and have it notarized. File the application and any required supplemental material with your state's licensing authority and pay the required filing fee.
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