Rent a Dealer License

Rent a Dealer License? Ha!

Rent a Dealer License?  Really?You’ll see web pages advertising “Rent a Dealer License”.  You pay a monthly fee and you are put on their license in another state.

(This is not the same as the Indiana dealer license offers you see.  Read here to understand the problems with an Indiana wholesale dealer license.)

These offers of renting a license for a monthly fee will add you to their license in another state.  You will then be registered to attend dealer only auctions and purchase cars.  As a dealer you will be able to resell the car to the public.

Well, yes….. BUT…. Can you rent a dealer license?

Here are the road blocks these companies don’t mention.  They don’t lie, they just don’t tell all the facts.

If you live and will be doing your business transactions (sales) in your home state, not the one you’re licensed in, most likely you cannot legally sell cars for profit in the state you reside.

Your new dealer license is good to do business only in the state it is issued.

Want to Be a Criminal? No?

Your home state requires anyone DOING BUSINESS in the state to be licensed under the statutes of the state.  If the car is in your state and you are showing and selling the car in your state then your state requires you to be licensed in your state. PERIOD. no if ands or buts.  For you to do otherwise may be criminal, usually a misdemeanor.

If you can rent a dealer license, why can’t you rent a contractor’s license or a beautician’s license?

All licensed business: car dealers, doctor, real estate agents, lawyers, contractors, etc, must be licensed IN the state they are providing the service or product.  Period.

Protect Yourself…….Contact Your State Licensing Agency

Before investing in these “rent a dealer license” offers, call your state licensing agency and ask them.

Few dealers will take this risk to add individuals to their license.

There are also risks for you, too.

It’s like a prearranged marriage; where two parties are joined together without knowing each other but their future fortunes and losses depend on the actions of the other.

Here are some of the issues:

applyThe money you owe the dealer every month could be used to invest in your own business, not his.

applyWhen you become a member of a business you are subject to the rights and obligations of all the other members, most of whom you don’t know and never will.

applyThe dealer could fail or close.  Then you lose it all.  Without a license, you cannot not buy inventory nor sell any of the vehicles you have on hand.

applyIf you have any assets in the business, such as pending sales, they could be tied up or lost in the case of a lawsuit against the dealer.

applyAs there are more members added to the license, the less control you have and your assets are at greater risk.

applyMost states require that sales of vehicles within its state’s boundary must be processed by a licensed dealer in the state.

 

Don Massey A Colorado Dealer

Don Massey
A Colorado Dealer

 

Listen up!  If you decide to do this, make sure you have a lawyer review the contract. Verifywith your state licensing organization that you can legally sell cars, under the licensee, within the state you reside.

Again, before investing several hundred dollars in a “rent a dealer license” offer, ask your state licensing organization about the legality.

Or better yet, …….. get your own license.  Don’t depend on someone else! 

 

See my e-book resources here

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Comments

Rent a Dealer License — 10 Comments

  1. Everything sounds great but before I pay I would like to no what restrictions or requirements would prevent me from obtaining my license. For example(s) Credit score, liquidity, driving record, criminal history, etc. Any response would be appreciated. Oh yeah, thanks for giving me the heads up about Indiana and the “landlords” because that’s exactly what I was going to do

    Thanks,

    Ronnie

    • Ronnie

      Only your state licensing group can give you the exact requirements that you can review to see if there are any personal issues, such as credit scores or criminal history that would affect your application.

      My resources give you alternatives such as a business location.

      Thanks for your questions.

  2. Great article :) and might I add for anyone else reading this forum; I did go through a company where I “rented” a dealer license for $350 a month in order to gain access to dealer only auctions … I did gain access to a major auction and it was a fun experience, however if you are limited to one at time car sales and staying under your states limit (usually 5 per year) it will be extremely difficult to make anything close to a profit or justify the massive risk … It wasn’t exactly a scam, but you might find the numbers just don’t add up … There are some good deals to be had at the auction, but the cost of gaining access seems to negate any profit to be made … Is Craigslist a better deal ? Who can say for sure, each one must make that judgement for themselves … I think that after one or two more trips to the auction I may just give it up … a little poorer, but hopefully wiser : )

    • Paul

      Yes, all the “rent a dealer license” programs have limitations because you cannot RENT a license of any kind. They can put you on the “employee or representative” list at auctions but as you found out, that’s limited in what you can do after purchasing the car because you’re still not a dealer as far as sales to the public are concerned.

      Don

  3. hello, thanks for the information. I buy cars on copart auction how can I get a license to use on this website because I pay $200 just to rent a license, kindly put me through on how to get a license

    • Olalekan

      Browse through the pages on the website and you’ll find helpful information plus eBooks that I provide to show you exactly how to get a license and the insider information on running a profitable operation. I’ve had my license for over 8 years. I also provide free consulting. Good luck in your efforts.

      Don

  4. I’ve bought 2 or 3 cars in the past years to make a profit. Now I want to be able to go to dealers only auction and retail the vehicles I purchase. People tell me that it’s very difficult to get a dealer’s license here in Virginia so I contacted one of this companies that “get you a license” through an existing dealer and the process takes a couple of weeks or so they said. After reading your post and information I’m not sure if it’s legal what they say, they say it is 100%

    • Elm

      I read the requirements for a dealer license in Virginia. I see that it is not difficult. You can find a rental space on Craigslist to satisfy the requirements. You MUST verify the legality of any offer you see on the Internet with the Virginia Dealer Licensing Board. These businesses can get you into auctions and some can get you a license. But will the license you receive allow you sell in your home? NO NO NO. Every state requires that a dealer must sell from the business location, not from their home. My manuals describe all the issues you will have to address with getting a license. Here is the telephone number for the Virginia Dealer Board. (804) 367-1100

      Don

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