California auction license

Thinking about jumping into the California car business? It’s a popular career path here, and I get a lot of questions about getting started.

People always want to know how to buy cars at auction, which makes sense – that’s where the inventory comes from! So, let me break down how to get your California dealer’s license, and you’ll be on your way to those auction lanes in no time.

This will also permit you to bid in Dealer Auto Auctions in California that are for licensed dealers only — sometimes, people refer to them as auction licenses.

California Dealer License Requirements (aka “Auction License”)

Choose The Right Kind of License

Many potential sellers are surprised to learn just how many different licenses are available. Before you can become a car dealer, you need to determine what kind of dealer you want to be.

Now, before you get too excited, remember that not all licenses are created equal. You can’t just grab any license and start selling any car you want.

Think about what kind of dealer you want to be. Do you want to handle new and used cars, just used, or focus on the wholesale side of things?

Each license has different rules and restrictions, so do your homework first. You don’t want to limit yourself by choosing the wrong one.

Find A Car Dealer Training Session

Before you can obtain a car dealer license, you will need to undergo training. These training courses are generally only one day long, making them easy and affordable. To get started here, seek out car dealer training programs in your area.

Make sure you select a training program that matches your license specifically to avoid wasting time and money. Keep your certificate of completion on hand. In most cases, this will be a part of your application down the line.

Select A Compliant Property For Your Business

Okay, so you’re ready to make this happen. First things first, you’re going to need a place to call your own. California’s pretty strict about this – they want to make sure you have a legitimate spot to sell cars from.

But before you sign any leases or put down an offer on a building, pump the brakes and check the local zoning rules. Some cities aren’t big on car dealerships or might stick you in a designated area.

Do yourself a favor and check with your city or county to see what they allow. You don’t want to find the perfect spot only to find out it’s a no-go for selling cars.

Secure A Car Dealer Bond

In the state of California, securing a bond is a requirement to become a licensed car dealer. When applying for a bond, be aware that the bonds that you will qualify for will largely be influenced by your credit, as well as other financial factors.

Now, let’s talk about getting bonded. It’s a requirement in California, and basically, it’s like an insurance policy for your customers. It protects them from shady deals or cars that are total lemons. Think of it as a third-party vouching for you, saying you’re a legit business and not out to rip people off.

Of course, this kind of assurance comes with a price tag – your surety bond. And guess what plays a big role in how much that bond will cost? You got it – your credit score.

If your credit’s a bit rough, the bonding company sees you as a higher risk, and they’ll charge you more. I’ve seen bad credit add thousands of dollars to the yearly cost of a bond.

But if you’ve got good credit, you might be looking at just a few hundred bucks a year. So, keep that credit score in good shape!

Get Necessary Licensing

Whether you are selling cars or digital goods, every single state requires that you take the time to get the appropriate licensing.

As a bare minimum, you will need to start by obtaining a business license, as well as a valid employer identification number (EIN) with the IRS. This is for your taxes.

Don’t forget, a basic business license isn’t the only piece of paper you’ll need. Depending on where you’re setting up shop in California, the county might have its own set of rules and regulations.

You’ll likely need a separate license to sell cars, and that paperwork can get pretty specific. My advice? Read everything carefully.

Trust me, the last thing you want is to fill out everything only to find a mistake and have to start all over again. That’ll really throw a wrench in your plans.

Submit Your Application

Alright, so you’ve got your ducks in a row, you’ve found a location, and you’re ready to roll. Time to tackle that dealer license application. Now, I can’t stress this enough – read that application carefully. Like, really carefully.

Missing even a tiny detail can send your application to the bottom of the pile, and you’ll be twiddling your thumbs while you wait for them to get back to you. Make sure all your paperwork is organized and complete.

If something doesn’t make sense, don’t guess – pick up the phone and call the licensing folks directly. It’s better to be safe than sorry.

Work With The Department of Motor Vehicles Directly

Look, the California DMV might not be everyone’s favorite place, but when it comes to getting your dealer license, they’re actually your best friend. Their website is loaded with helpful info and resources to make sure you’re following all the rules. Plus, you can download the application forms right from their site.

Also, if you hit a snag or have any questions, don’t hesitate to give them a call. Those folks at the DMV can help you make sure your application is perfect the first time around, so you can get your license ASAP and start buying cars at auction.

Video: How to Get an Auction License in California


 
Becoming a licensed car dealer in the state of California is not the fastest process and it does require a fair share of paperwork. It is well worth the time and money when it comes down to it. As soon as your application is approved, you can begin to find great deals on vehicles and work to start selling them professionally.

Are Used Car Dealerships Bonded in California?

California’s got your customers’ backs – and yours, in a way. Before you can start selling used cars, they want you to get a surety bond. It’s a $50,000 guarantee that you’ll play by the rules and treat your customers fairly.

Think of it as a safety net for everyone involved. It protects your customers from any shady dealings, and it shows that you’re a serious business owner who’s committed to doing things the right way.

Now, keep in mind that these rules aren’t set in stone. The DMV can change the bond amount or other requirements whenever they want. So, it’s a good idea to check in with them every now and then, or talk to a lawyer who knows the ins and outs of the car business, just to make sure you’re always up to speed.

Remember, local regulations can play a significant role in what is required to obtain and maintain your license, so check out local guidelines.  Be sure to also look over the California Used Car Dealer Application Checklist.

If you plan to ship auction cars out of state, we recommend these California car shipping companies. We hope this guide helped you learn how to get a dealer license for car auctions.

Becoming a wholesale used car dealer can be very rewarding. A California auction license opens the doors to opportunities in the Cali automotive market.

Public Auctions California
Juan Carlos
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