Indiana Dealer License

When I first wrote this page the Indiana Dealer License holders were causing havoc in the industry.  You can read about it below.  It has been so bad the State of Indiana has KILLED the wholesale license!

ATTENTION: THE INDIANA GENERAL ASSEMBLY PASSED NEW LAWS DURING THE 2014 LEGISLATIVE SESSION THAT WILL AFFECT YOUR INDIANA WHOLESALE DEALER

ATTENTION: THE INDIANA GENERAL ASSEMBLY PASSED NEW LAWS DURING THE 2014 LEGISLATIVE SESSION THAT WILL AFFECT YOUR INDIANA WHOLESALE DEALER LICENSE.

Pursuant to SEA 350, all wholesale licenses will cease to exist after June 30, 2015. The Auto Dealer Services Division has created Administrative Emergency Rules to provide options for valid wholesale dealers. Here is a link to the Administrative Emergency Rules: http://www.in.gov/legislative/iac/20140702-IR-075140247ERA.xml.html

READ BELOW TO SEE WHAT CAUSED THIS TO HAPPEN!

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………

A sad Indiana dealer license holder!A Young Man Goes Ballistic!

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!

It can be HELL not following Indiana dealer license rules!But then, it all went to hell for Jerry, the new Indiana wholesale dealer!

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.

[note color="#F4ef62"]

  • The companies in Indiana are not getting anyone a license.  They are providing an office space.  They are landlords.  Period!  Nothing else.  What they DO is legal.  They rent office spaces.  Get it?
  • They filled out forms for Jerry and collected the fees.  That’s all.  Jerry was the applicant.
  • Jerry did not know a darn thing about the car business and thought it was just about getting a license.  It’s not just about getting a license.  That’s why YOU need my resources.  They explain the the car business and the hundreds of things you need to know BEFORE you even consider getting a license.
  • Jerry was responsible to KNOW and FOLLOW the licensing laws and regulations in Indiana and the dealer licensing laws and regulations of the state of New Jersey.
  • Jerry didn’t even know simple facts about the car business: the difference between a retail dealer and a wholesale dealer and what each does in the industry.  A wholesale dealer, by law, CANNOT sell to the public.
  • Because of his lack of basic knowledge he violated the laws of the States of Indiana and New Jersey.

[/note]

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.

Don't slip-up on the laws of the Indiana dealer license.Educate yourself.  You don’t know what you don’t know.

The resources you’ll find on this web site can educate you so you won’t end up like Jerry.

 CLICK HERE to Get Your Own State’s License!

 

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.

Thanks

Don Massey

Dealer License Consulting

Don Massey
Colorado Car Dealer

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Comments

Indiana Dealer License — 4 Comments

  1. Hello,

    My name is Vinny and I am 24 years old and a recent college graduate. Over the past 6 years I have worked in the automobile industry where I live in New Jersey. I have done everything from a Lot attendant to inventory management to even sales of new and pre-owned vehicles. I have learned alot and although it may not be the best career, I LOVE everything about this industry. I have always wanted to start my own dealership and hopefully help change the REPUTATION of the average “salesman. Over the years I have seen many indiana licenses and other states just the way you speak of JERRY above. I am truly glad that I never pulled the trigger on those.

    Recently I have found a place in south jersey which does exactly what you state above about the indiana license…virtual office, 2 spots, llc, paperwork,,,,etc….but it is also a retail license. (IT IS A NEW JERSEY DEALERS LICENSE) The only reason I am looking to get the license this way is because renting a dealer lot is very expensive. I want to slowly start flipping cars while still working my full time job. The website I found is this… http://www.njdealersautomall.com/
    If you could give me your opinion I would greatly appreciate it

    Vincent

    • Vinny

      Hi! Use to live in Jersey! Many years ago. I was stationed at Fort Monmouth (Eatontown) and after the service I graduated from NJIT. Small world.

      You HAVE to check with the DMV in Trenton before you do anything. Here are my concerns or questions. Does New Jersey require the car to be sold from the lot? (Every state I have checked does) All states I have checked require the showing and transaction to take place at the place of business.

      Here I found it on the Jersey DMV web site.. Note the first one!
      ************************
      Violations
      The Chief Administrator of MVC may suspend or revoke your dealer or leasing license or registration privilege for non-compliance at any time under the statutes and regulations that govern their issuance. These include but are not limited to:

      •Sales from other non-licensed locations
      •Failure to maintain records or ledgers at the licensed location
      •Misuse of temporary registration certificates
      •Misuse of re-assignment certificates
      •Failure to possess vehicle titles
      •Misuse of dealer plates (cannot be used for hire or commercial designed vehicles)
      *************************

      Please note this…. They are operating as a LANDLORD only. I looked at the website. The REQUIREMENTS they have are the State of New Jersey requirements that you would have to fulfill plus the location if you did it yourself. They are NOT getting you a license.

      What is the $5900 paying for? Rent?

      You are the licensee and must adhere to the New Jersey and Federal requirements of a dealer. I explain what these are in my ebooks. If you violate the rules and regulations of New Jersey after YOU obtain the license, this company has no legal responsibility.

      Why not attempt to get a license on your own… I show several legal options in my manuals.

      Don

  2. I have been looking at doing one of those Indiana dealers license for a couple years. Then I realized it was just as expensive to get my own through my own state, on my own. So I recently received my Michigan WHOLESALE dealers license. I have been in the automotive business from multiple angles, most of my life. I already knew that I could not sell to the public directly, Which was ok with me. My plan was to sell through auctions only. Here is what I did not know. I CANNOT sell at a PUBLIC auction. I can only sell at a DEALER only auction. The problem with this plan is that buying from one dealer auction and selling to another dealer auction is not profitable. By the time I paid auction fees at both auctions, I lost money. That is why I wanted to sell at public auctions. The general public pay more at auctions than dealers do. So, now I have this license, that is totally useless to me. And I’ve only had it 2 weeks. There are companies, (mainly in Indiana) that CLAIM that they can LEGALLY do the wholesale title work through their retail license, so wholesalers have an avenue to sell to the public. But after reading your article, you say that the sale has to be done in person at their facility, in most, if not all states. So, is that process they are offering also an illegal scam?

    • James

      As you have found the wholesale business is very competitive now. The reason for this is the used car market does not have enough good cars to meet the demand. I see “good” cars selling close to retail at the auction. 3-5 years ago a wholesaler could buy a car at true wholesale, mark it up $200-$300+ and easily sell it to a retailer. Not so today. There are wholesalers who are adept at evaluating cars that have physical damage who buy those don’t-wanters and after repair take them back to auction or sell directly to retailers. You have to be able to do repair estimates on the spot to be successful in this business model.

      In answer to your Indiana question, here is quote from the Indiana Secretary of State web site….

      It speaks for itself….

      Don

      http://www.in.gov/sos/dealer/index.htm
      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.

      July 1, 2013 additional laws go into effect that add additional elements to what this office considers an established place of business. We recognize each business may be unique and we will work with each license holder individually.

      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.

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