Would people be interested in taking advantage of a dealer license?

Off-Ramp
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I am looking into setting up a used car dealership; mostly to acquire cars i’d like to experience and then passing them onto enthusiasts affordably as compared to the general market.

Having a dealer license also means that people besides enthusiasts, who want to procure a cheap car or a discounted used vehicle could tap into auctions. I’m open to the idea of acquiring cars for customers and selling them at auction value for a small fee. Is this something people would be interested in?

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How would you be different from thousands of others who do it?

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Excellent question: I would provide a service akin to brokers on LH. At least that’s a vague idea. I still haven’t thought about it thoroughly.

I would be breaking even regardless of making the license available for everyone; I just figured it would be cool to make myself available and help ppl save money.

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Sounds good in principle until you go actually do this in the real world. Have a good attorney on retainer who will actually answer your calls and knows how to defend you and your dealership

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That’s a good callout. Thank you for sharing!

Would you be okay if I PM’d you down the line after I’ve done more research?

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Sure. I do this for a living, happy to help in some respect

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I appreciate that. Cheers!

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Watch a few Lucky Lopez videos as he does this and teaches classes.

He TRIED to setup a used car dealership in Vegas and went back to his wholesaling business

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Most states require you to have a physical location. That’s cost prohibitive for most people just looking to flip a few cars.

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Work with a dealer and pay them a fee to source the cars for you and then sell them whether privately on your own or back to auction. Some dealers also rent out their plates for people to use (very shady and most likely illegal everywhere but people in your situation do it and flip cars).

Your biggest challenge is going to be finding a physical location if you venture on your own. I don’t know where you are located but some towns/cities give hard time to smaller auto dealers opening up shop.

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where are you located? what state?

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Retail dealer licenses’ biggest roadblock is physical location and zoning

wholesale license are easier in some states because of no physical location.

lot of paperwork, unless you’re willing to be full in not worth the headache

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Someone has did what you are planning to do. Search on facebook ‘48 hours and a Used car’.

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That kind of a structure makes sense. I might reach out to them.

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Wake County, North Carolina. Might be tough because of zoning but if my understanding is correct, I might not need a lot. A small office space for recordkeeping should do. I don’t think I’d be able to start a dealership with a physical office space in another state.

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Here in NJ:

  • Supply evidence of an established place of business – you must have an office with a desk, chair, landline telephone and a working safe to store motor vehicle documents.
  • Your office size must be at a minimum 8 X 9 square feet.
  • For a dealer license, you are required to maintain display space capable of showcasing a minimum of two vehicles
  • Your business must also have an exterior sign permanently affixed to the land or building consistent with local ordinances. The lettering must be legible from the roadway

Oh and also

  • A Certificate of Insurance reflecting liability coverage in the amount of $100,000 - $250,000 for bodily injury and $25,000 for property damage is required at the time of approval and must specify the total number of plates covered by the policy
  • A $10,000 Surety Bond is required in your business name and address with an expiration date coinciding with the licensing year.

I’ll save you some time, join a co-op. Makes 0 financial sense for most to do this on your own.

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Mostly same requirements for FL as well.
Will be hard to compete with others so good luck. It’s a business where everyone (tries to) f each other so I would be extra careful if I were you.

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Thank the heavens that I don’t live in New Jersey :wink:

That being said, the bond requirements for North Carolina are about the same. That, business insurance, tags, rental office space, business and dealer license. All in, for testing out some cars and flipping the rest, it ends up making sense to me over time. I don’t expect to turn a profit instantly and it would require a good bit of capital for set up but I think over time, the math checks out for me.

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one of the main issues will be, as a dealer, we are typically legally responsible to stand behind the vehicles you sell. Each state may have different regulations and time periods but overall - it opens you up to lots of liability.

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NJ is apparently not that strict considering the buildings housing 300+ dealers in one building each across the state. I assume that’s what you meant by co-op.