Rent a Dealer License? Ha!
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:
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!