Indiana Dealer License…..a Scam?
I regularly receive phone calls with the question, “Are the Indiana dealer license offers advertised on the Internet a scam”?
The simple answer is no, BUT…….. and it’s a BIG but………
I received a call from a young man in New Jersey who had gotten his Indiana dealer license from one these companies. He was desperate, upset and needed advice. I had to calm him down. He was so distraught!
He explained he had purchased 6 automobiles at a Manheim auction and could not sell them and the auction would not take them back!
Here is his story. I’ll call him Jerry.
Pay Attention! You’ll Learn Several Lessons.
When Jerry received his license he was excited. He registered at the local Manheim Auction and started asking friends if he could find cars for them at great savings. Three of them gave him orders and he purchased them at auction.
They were overjoyed and he was happy, happy, happy.
After delivering the cars, Jerry went back to the auction and purchased three more!
When the friends went to the New Jersey DMV, they were refused registration. You see, Jerry has a wholesale license and cannot sell to the public in any state. The state started asking his friends questions. Fortunately they didn’t answer them. Jerry took back the cars and refunded the friends’ money.
So now he has six cars on hand. And there’s more problems coming his way but let’s stop and see…
This Could Happen to You!
What Did Happen to Jerry?
There were things he didn’t know.
And unless you’ve been in the industry, you don’t know either.
Now Jerry’s Money Woes Go From Bad to Worse!
He decides he is going to get out of this business. He take the cars back to auction since he can’t sell them to the public. The auction refuses to take them back for sale at the auction. His Indiana dealer license is worthless to him!
Jerry now has over $50,000 invested in cars that he can’t sell to ANYONE.
Why? Because he got involved in a business he had no knowledge. He did not educate himself first before getting the license.
I got involverd for him. I called the New Jersey DMV and found out because of the “Jerrys” with their Indiana dealer licenses screwing up titles so much, the New Jersey DMV made the decision not to process any title that had been assigned to an Indiana dealer (assigned not transferred).
I called the Manheim auction in New Jersey and talked to one of their title folks and she told me that because of the title problems caused by Indiana dealers they had stopped accepting any Indiana wholesale dealer autos for sale at the auction.
To make a long story short, I shared a couple of alternatives for him to move his 6 cars. One worked. And he purchased my ebooks. He needed them first not after the fact.
The Dirty Little Secret of These Indiana Dealer License Companies
One of these Indiana Dealer License companies has over 400 “dealers” renting at their locations. Hmmmm, 400 times $299 a month is more than a million bucks a year! Do you now see why there are so many ads when you Google “dealer license”.
How do I know this? I’ve talked to people who have worked the sales phones for them on commission basis only. First month goes to the salesman.
How About a $25,000 Fine?
Here’s another case. Dan Grissom, a resident of Illinois, obtained an Indiana Dealer License through one of these companies in Rensseleur, Indiana. He then purchased cars at auction and sold them on Craigslist in Chicago. This violation of Indiana law was reported and he was fined $25,000 and his dealer license was revoked. A wholesale dealer CANNOT sell to the public.
Here’s a Killer Piece of Information!
Last year, this is what the State of Indiana posted on their website:
WHOLESALE DEALER ALERT
This alert is a supplement to February 2013 alert to wholesale dealers.
Your business location must be in Indiana in order to be licensed.
This is not limited to a physical space but must include an office location that you visit, utilize for record keeping, and has readily available utilities. An Indiana business location is not a place that is vacant but for table and chairs with empty banker boxes, or serves only as a mail forwarding operation.
If you obtained your license and were advised or came to believe you only need a physical address and never have to work out of your Indiana location that is incorrect. Current law requires a business location in Indiana.
IF you choose to renew your license and you have not been using your Indiana business location we invite you to take corrective steps prior to Dec 31, 2013. Failure to correct your office situation may result in administrative actions which could include revocation of your license and the imposition of fines.
By the way, to renew an Indiana Wholesale Dealer License the licensee is required to have sold 120 cars in the previous year! The Indiana Dealer License companies never mention this.
The resources you’ll find on this web site can educate you so you won’t end up like Jerry.
Post your questions and comments below.
Hey, do you have a story to tell about the Indiana dealer license offers? If you do please post it below.