There are three ways to buy and sell cars.You can buy cars from auctions and sell them to car dealers.As a retailer, you can buy cars from auctions and dealers and sell them directly to the public.You can work as a broker, who facilitates sales between buyers and sellers and takes a cut of the profits.You must have a license from the California Department of Motor Vehicles to participate in any of the activities.
Step 1: Do you need a license?
You don't need a license if you sell your own car.If you are going to be buying and selling cars for the purpose of making a profit, you will need a license from the Department of Motor Vehicles.It is illegal to sell cars for profit without a license.If you are caughtcurbstoning can involve hefty fines.If you don't know if you need a license, contact the Department of Motor Vehicles.In the last few years, CA has been cracking down on curbstoners.
Step 2: Do you want to be a wholesale dealer or a retail dealer?
Whether you need to have retail space or not is one of the main distinctions.The same paperwork is required for both retail and wholesale dealer licenses.A wholesale dealer can buy cars from another dealer and sell them to other dealers.A dealer can also sell cars to other countries.A wholesale dealer may not sell directly to the public.A wholesale dealer doesn't need a sign or a space for displaying vehicles if they have an office.A retail dealer can buy cars from other dealers and sell them to the public.A retail dealer can also sell cars to other countries.There is an office, a sign, and a space for displaying vehicles.
Step 3: Do you want to add an auto broker endorsement to your license?
You can act as a middleman between buyers and sellers with an auto-broker endorsement.An auto-broker endorsement can be added to a retail or wholesale dealer license.The only way to sell directly to the public is if you have an auto broker endorsement.There is no need for additional paperwork to get an auto-broker endorsement.There is a check box on your application.
Step 4: You can contact the Occupational Licensing Inspector.
If you need to complete an abbreviated background check, the Inspector can help.In order to become a car dealer in CA, you have to complete a full background check.CA offers an abbreviated background check for people who don't know if they'll pass the full check.If you have criminal convictions, bankruptcies, or civil judgments against you, you should complete an abbreviated background check before investing too much money in your business.There is a list of Occupational Licensing Inspectors on the website.
Step 5: Take the Personal History Questionnaire.
The form inquires about your education and work history.Do you have any civil judgments against you?Tell the truth in your answers.An independent review of your background will be done by CA.You can't get a license if you leave out any information.
Step 6: Copies of arrest records and court documents are needed.
You need to submit these with the Personal History Questionnaire.You can get copies from the jurisdiction where you were arrested or went to court if you don't have copies on hand.
Step 7: The Occupational Licensing Inspector will review the paperwork.
A check for $176 is required to cover the cost of the abbreviated background check.
Step 8: Wait for the decision of the Department of Motor Vehicles.
Depending on your background, this will take several weeks.There is no hard and fast rule as to what is disqualifying you for a license.Any evidence of moral turpitude is what the DMV is looking for.
Step 9: A business name can be created.
Unless you will be doing business under your own name, you need to register your business name.You can file the paperwork at your local recorder's office.There is a fee.
Step 10: You have to apply for a business license.
Ask to speak with the tax and license division at your local Town Hall.If you create a fake business name, register it with the city.There are many ways to register your business.You can register any number of business entities.It is best to talk to a lawyer before making any decisions about your business.What kind of entity you set up and your annual revenue will affect the cost of your business license.
Step 11: Get a surety bond.
Purchase a surety bond in California and find a bonding company.A surety bond is needed to make sure that you meet your obligations as a car dealer.You can expect to pay between $1,000 and $15,000 per year for surety bonds.
Step 12: Do you want to work out in your home or another place?
You can run a wholesale dealership from your home.You will need to lease or purchase a space if you don't have an office in your home.
Step 13: You should set up an office.
It is ok for it to be a home office.You do not need a sign or space for a car to be a wholesale dealer.
Step 14: Obtain a copy of your lease.
If you rent an office, you will need a copy of your lease.A copy of your mortgage is required if you own an office.
Step 15: An office should be set up.
It is ok for it to be a home office.It makes sense for the retail space to be in the same location as the office space since you need both.
Step 16: The sign needs to be at least two square feet.
Since you will be selling to the public, you must have a sign that says you are a car dealer.
Step 17: At least two cars should be able to fit in a big space.
Since you are going to be selling cars to the public, you need a place to keep them.You can have more space than the minimum required by the Department of Motor Vehicles.
Step 18: Obtain a copy of your lease.
If you rent your space, you will need a copy of your lease.A copy of your mortgage is required if you own a space.
Step 19: Either a wholesale or retail license is required.
You need a license before you can become an auto broker.
Step 20: You should set up an office.
You can use a home office if you add the broker endorsement to your license.
Step 21: The sign needs to be at least two square feet.
If you want to add the broker endorsement to your retail dealer license, you need a retail space that can fit at least two cars.
Step 22: You must complete the CA licensing class.
The class is required to become a car dealer.You will learn about the laws that regulate car dealers in the class.The class is offered by various private organizations.The California Department of Motor Vehicles website has listings.Depending on which organization you choose, the cost is $125.
Step 23: You need to pass the licensing test.
You will take a test once you have completed the class.The test is expensive.
Step 24: You need to apply for an original occupational license.
You can get a paper copy of the application at the Department of Motor Vehicles.If you want to add an auto-broker endorsement to your license, the application will ask if you are applying for a wholesale dealer license.When you fill out the application, have your paperwork, surety bond, and financial information with you.
Step 25: Send copies of your paperwork to the Department of Motor Vehicles.
You need to have a surety bond, driver's license, lease or mortgage, business license and photographs of your retail location.As you go through the application process, keep copies of everything.
Step 26: Copies of your paperwork can be sent along with your application.
The best way to do this is via certified mail.It will take a while to make a decision.You can begin selling cars once your application is approved.