The Complete Guide to Getting Your Car Auction License [2021]

Category: Uncategorized
Published: Apr 7, 2021
 

 

To sell vehicles to the public or to other dealers at an auction you will need to get a car auction license. 

Depending on the requirements in your state, an auto auction license will usually allow you to either sell vehicles only to other dealers or to the public. Since states’ dealer license classifications differ, sometimes wholesale dealers are allowed to sell vehicles at an auction though usually only to other dealers. 

 

Want to know how to get a dealer license for car auctions? The following guide will take you through the process of getting a license in your state. Keep reading!

1. The Car Auction License Requirements

While licensing requirements for car auction dealers differ from state to state, a majority of the requirements are similar. Of course, make sure to check with your Department of Motor Vehicles to learn more about how to get a car auction license in your state.

 

That said, you can expect to have to meet the following requirements. 

Business and Tax Registration

To obtain a car auction license, you will first need to register your business. This is frequently done at the office of the Secretary of State. This process will require you to determine a structure for your business.

 

In addition, you will likely also need to apply to your state’s Department of Revenue to get a sales & use tax registration. You will require this to pay taxes on any vehicles you sell at auctions.

 

Finally, you may need to obtain an Employer Identification Number (EIN) from the IRS.

 

Established Place of Business

Auto auction dealers and wholesale dealers typically do not require a lot and a display space. Auctions are usually conducted at a third location, and you do not need to have your own lot for the purpose.

 

In case you do need to have a lot, you will need to obtain zoning approval from your municipality and comply with spatial requirements for your lot. You will also need to provide a lease agreement or proof of ownership of the lot.

 

To conduct business, you will need to have an office, though. You will need to have a business sign as well as business hours posted in front of your office and/or the building in which it is housed. 

Criminal Background Check

As part of your car auction license application, you can expect to be asked to pass a criminal background check. For this purpose, you will need to provide electronic fingerprints and possibly a personal history form.

2. Complete the Car Auction License Application

At this point, you can proceed with completing your car auction license application and submitting it to the DMV, along with your licensing fee. 

Car Auction License Application Form

Begin by downloading the relevant application form from your state DMV’s website. Some DMVs offer online applications though many still accept application packets via mail.

 

Along with completing the application, you will need to attach documentation confirming you have met the above requirements. This may include:

 

  • Business entity registration documents
  • A Certificate of Authority or a Good Standing Certificate
  • Proof of compliance with location requirements
    • Photographs of the outside of your office, business sign, business hours, and photographs of your lot / display space (if needed)
  • Lease agreement or proof of ownership (if needed)
  • Criminal background check and/or personal history form

Licensing and Application Fees

In addition to the above documents, you will also need to attach a check made payable to the DMV to cover your licensing and/or application fee. 

 

Fees vary widely between states and can be anywhere between $50 and $500 or more.

 

3. Provide a Surety Bond and Insurance 

Finally, before you proceed with submitting your application packet, you will likely need to get an auto dealer bond

 

The bond’s purpose is to guarantee that you comply with your state’s laws and regulations on the sale of vehicles by car auction dealers.

 

In addition, a garage liability policy may also be required by the DMV.

4. Submit and Receive Your Car Auction License

After you submit your license application packet, you will usually need to wait for no more than a few weeks to get a response from the DMV. 

 

In some cases, your office premises and lot (if you have one) may first need to pass an inspection before your application is reviewed and your license is issued.

 

After final approval of your application, your license will be issued and sent to you by mail.

5. Car Auction License Expiration and Renewal

Most auto auction licenses are issued for one year. They may expire a year after they were issued or expire on a certain date.

 

To renew your license you will need to submit a renewal application as well as to renew your surety bond.  

 

Want to know more about getting a car auction bond in your state? Get in touch with us at 877.514.5146! 

 

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