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Getting a California Car Dealer License?

Dealer License Experts

If you’re curious or having issues with getting your Car Dealer License in California then you are in luck!

 

In this post, you will find a comprehensive and super helpful resource if you have made the decision to pursue your California Auto Dealer License. The segment of the government that licenses used auto dealers is the Department of Motor Vehicles (DMV).

 

A few different names that probably leap to mind when you think of the type of business we are focusing on here. Motor Vehicle Dealer, Retail Auto Dealer, Used Car Dealer, Non-Franchised Auto Dealer are just a few. Regardless of what we call them, each state has its own dealer licensing process.

 

Car Dealer License

How to Get a California Car Dealer License in 2020?

If you are interested in knowing how to get a dealer’s license, you must choose a used car business model. This business is about more than just getting a dealer auction license and rushing off to buy cars.

Knowledge of the entire system is important if you want to build a successful dealership. Here a short video that will help you streamline the dealer licensing process…

 

Concern
The most common concern we hear from our dealers is regarding the uncertainty around the future of their business. Anyone can sell a few cars to friends and family but having a strong business plan and fantastic execution will make all the difference in the world.

 

Cause
Unfortunately, the DMV is not very helpful in educating their used car dealers and then wonder why they make mistakes. Even getting a few pointers when you’re at the auction from some of your dealer buddies isn’t the same as it used to be.

 

Effect
Even the good people lose in the end without a lack of vision and a strong sense of what to work on next. With Shiny Object Syndrome being a real thing, many of our dealers feel overwhelmed with the endless options of what to do with their time.

Correction
Staying focused on the proper next steps may not be coming from your DMV inspector but our free car dealer education video library will be useful to help you reach your desired destination.

 

 

How to Get a California Car Dealer License in 2020?

  1. DMV Licensing Paperwork. Here’s a great DMV link that explains how to complete the DMV Dealer Application paperwork.
  2. Pre-Licensing Education. Spend your money here and don’t try to hurry out of class because you haven’t set aside the right amount of time to get educated on your business.
  3. Pass the DMV test. You will be taking this test at an Occupational Licensing DMV location
  4. Background Check (Livescans)
  5. City Business License, although the DMV seems to be phasing this step out slowly. You won’t need this if your business location is in an unincorporated area of your city.
  6. Fictitious Name Statement which is issued by the County Clerk’s desk. You won’t need this if you are forming a Corporation of LLC.
  7. Car Dealer Bond ($10K or $50K). Wholesale-only dealers that sell less than 25 vehicles per year can get a $10K bond. There is also a carve-out in the law that allows a $10K bond for motorcycle-only retail dealers. All other wholesale, auto broker, or retail dealers need a $50K bond.
  8. Signing a lease on Business Location.
  9. Resale Permit from the Tax Administration Board, previous the Board of Equalization.
  10. Checkbook is the Business Name.
  11. Signage. Your outdoor signs have to visible from 50 feet away. Your Business License and are a few other items that need to be hanging on your wall where your customers can see them.
  12. Photos. 8 – 12 photos are required depending on if you are getting your wholesale, auto broker, or retail dealer license.

* It is absolutely critical that the business name on each document match identically.

 

Dealer License

 

If you are interested in knowing how to get a dealer’s license, you must choose a used car business model. This business is about more than just getting a dealer auction license and rushing off to buy cars.

Knowledge of the entire system is important if you want to build a successful dealership. Here a short video that will help you streamline the dealer licensing process…

 

 


Let’s take a deeper look at Surety Bonds (step 7) of the California Car Dealer License process.

The reason I specifically mention this step is for the individuals that are super excited to hit their first Auto Dealer Auction sometimes lose sight of the steps that could be most problematic for them. To avoid having a dime hold up a dollar, let’s think about the bond sooner rather than later if you have less than perfect credit.

Having no credit at all also falls into a category that should take a deeper look at what their dealer bond will cost them. The other type of dealer that should be checking on their surety bond rate early in the process are the folks that are not U.S. Citizens.

Although we have fantastic programs to provide great rates on car dealer bonds for non-citizens, sometimes the rates take a bit longer to get especially if the applicant doesn’t have a Permanent Resident Card (Green Card).

For swift service and great rates on Your California Car Dealer Bond, call 866-357-4405 TODAY! We can even offer payment options on some bonds if the annual premium is over $1,500.


Why are Bonds required to get a California Car Dealer License?

First of all, a bond covers the general public, lenders, the DMV, and other dealers in case an auto dealer isn’t paying their bills. A list of bond claim scenarios is below.

The limits of the bond that the DMV requires will also depend on what state you transact business but leave that all to us. Here are just a few states and their required bond limit set by the Department of Motor Vehicles (DMV):

  • California             ($10,000 or $50,000 depending on your business operation.)
  • Arizona                 ($25,000 or $100,000 depending on your business operation.)
  • Colorado              ($50,000 bond limit.)
  • Iowa                        ($75,000 bond limit.)
  • Louisiana              ($50,000 bond limit.)
  • Minnesota           ($50,000 bond limit.)
  • New Mexico       ($50,000 bond limit.)
  • North Carolina ($50,000 bond limit.)
  • Texas                       ($50,000 bond limit.)

 

Can a Used Car Dealer (Auto Broker, Wholesaler, or Retail Dealer) get away without having a Dealer Bond?

Again, a Car Dealer Bond is a mandatory requirement set by the DMV to obtain or keep their retail dealer, wholesale, or auto broker license regardless of transaction volume or type of vehicles sold. With a bond, all claim payout must be repaid to the surety carrier 100% to prevent the bond and the dealer license from canceling. If the bond cancels at any time, the surety company sends a Notice of Cancellation (NOC) to the Department of Motor Vehicle’s (DMV) headquarters in Sacramento via certified mail.

auto dealership license experts

Why are things so confusing?

Once the DMV headquarters processes the NOC, they alert the dealer’s local inspector. (This is the usually the same exact DMV inspector that issued the dealer’s license originally.) This forces that inspector to reach out to the dealer and either get a Notice of Reinstatement (NOR) for that bond or a replacement bond. The dealer typically has 3-4 days to get this situated with the inspector before the California Car Dealer License is suspended.

If you decide on getting your Auto Dealer’s License, please fall into any of these pitfalls:

  • not having a professional-looking logo created as a cornerstone of your brand. This is step # 1 for every Used Car Dealer regardless if retail, wholesale, or auto broker.
  • how about not having professional business cards and stationery? Free layouts are free for a reason and they make your business look as cheap as they are. Do your business a favor and give it a chance to succeed in protecting your image.
  • sending your email through personal Gmail or AOL email account instead of investing in an email that has been branded to your dealer name. 
  • the last one is not as bad but not having a fully-developed website to fully illustrate your auto dealer business. 
  • not having information about the used car dealer industry. This is a great free library to help you get an edge on your competitors. 

In conclusion, Mike Ramos (the president of Your Car Dealer Bond LLC) has a message for you.

If you are getting a California Car Dealer license…we truly appreciate the chance to earn your bond business and help answer your burning questions!

Our dedicated staff delivers quality service with extremely knowledgeable yet down-to-earth people, therefore we are just like you. We are here to help in any way we can.

 

Check out this short video if you’re curious how Your Car Dealer Bond got started…

 

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