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  • Writer's pictureEkene Uchenu

Do I Need Dealership License To Sell Cars?

Do I Need a Dealer's License to Legally Flip Cars?

The laws on how many cars you can sell each year do vary from state to state so you are best to carefully research this in your state first. For example in New South Wales Australia you can only flip five cars per year, however in Indiana you can sell twelve cars per year before you have to get a dealers license.

A way around this is to approach a licensed dealer and see if you can negotiate with him to do the paperwork on any cars over and above the state quota. Of course this is likely to cost several hundred dollars but if you're making $1000 or more per sale, well you're still ahead of the game. Another way is to do the same idea with family and friends, so basically you're using up their annual quota before you require a dealers license.

Every state requires prolific auto sellers to sign up as dealers. Obtaining as well as maintaining a dealer license is a time-consuming, paperwork-laden affair. It's pricey as well. Between certificate charges, guaranty bond charges, and also various governing costs, you can anticipate to invest at least $1,500 to get lawful.

If you rent business space for your operation, you need to budget hundreds or thousands monthly for rental fee or overhead. Fortunately, small-time flippers who technically certify as dealerships can usually skate by without formally setting up shop, offered they don't breach regional ordinances by obstructing their backyards as well as roads with extra vehicles.

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