HERE ARE EXCERPTS FROM:
HOW TO GET A DEALER LICENSE
A PROFITABLE USED CAR BUSINESS
LOOK AT THE INDEX!
How to Get Your Dealer License **
Three Successful Used Car Business Models **
Starting A Used Car Business
An Introduction to the Independent Used Car Business
How to Determine the Value of a Vehicle **
Dealer Only Auctions Explained **
How to do Consignment Sales
Good Record Keeping
Titling Issues and Processes
Secrets of Selling Via the Internet **
Selling “Certified Pre-owned Cars”
How to be an Effective Salesman
How to Name Your Business for Maximum Sales
How to Provide Financing for Your Customers
Other Sources of Income for the Used Car Dealer
Used Car Dealer Federal Used Car Rule
How Much Money Will You Need to Start **
Business Planning – Where to Start
Planning For Your Used Car Business
The Legal Structure of Your Business **
Insurance Requirements **
Unraveling the Confusion of Local and State Regulations **
How to Keep Proper Business Records
Get a Handle on Your Business Finances/Taxes
I – National Arbitration Policy For Dealer-Only Auctions
II – Vehicle Reconditioning Check Lists
ISN’T THIS IS THE INFORMATION YOUR LOOKING FOR?
PAGE 4… HOW TO GET YOUR DEALER LICENSE…..
First, I want to thank you for ordering this manual. You will find it a helpful introduction in starting a used car business. Also, if you have received my other manuals on wholesaling or exporting, you may find duplicate information in each. This is because there are common issues across the three businesses. I wrote the individual manuals as stand alone, so a buyer would not have to read all three if they were interested in just one business plan.
My name is Don Massey and I’m a licensed wholesale dealer in Colorado. I have been involved in buying and selling cars for years. Many people ask me: “Are you “the” Don Massey? “ I answer; “Yes I’m THE Don Massy but not that Don Massey.” Don Massey is a dealership that has many locations around the country, primarily Cadillac. Sorry to say that’s not me!
WHAT YOU’RE ASKING
I find there are generally three different types of interest in buying and selling cars.
First: you want to know how to open a used car lot.
Second: or your interest is in buying and selling a few cars a year as a part time business.
Third: you want to know how can I to go to a wholesale dealer only auction, buy a car and resell it for a profit. You want to know how to get an auction license to get into the dealer only auctions.
I will cover each of these in detail.
Let me clarify something right now. There is NO auction license. Dealer only auctions set the rules for access to their auctions; not your state. A bidder at an auction must have a dealer license to get into the auction. I will cover the details of this access later.
The auctions are for wholesale sales only between dealers, banks and rental or leasing companies. The auctions cannot collect sales tax on the transactions. Dealer only auctions cannot sell cars to the public. They do not have retail dealer licenses. Side note: I see that Manheim Auctions is offering limited public auctions at some of their locations.
CAN I SELL CARS FROM HOME? ……………………………………continued
PAGE 7… BUT I ONLY WANT TO SELL ON THE INTERNET….
This is a common misunderstanding. I’ll be asked, “Why do I need a license? I just want to sell on eBay or Craigslist. First, eBay and Craigslist are not places. They are forms of advertising. How the product or service is advertised, whether it is cars, real estate, hair cuts or lawyer services, does not change the need for the provider to be licensed.
And it doesn’t matter if the buyer is in another state, either. You must be licensed in the state where the vehicle is located and the transaction is taking place.
CAN I BUY AND SELL CARS PART-TIME?
Now that I have your attention does this mean you still can’t buy and sell cars part time?
First, some states allow a person to sell a limited number of cars a year without requiring a license. Find out what the limit is for your state. It varies from 0 to 12. But DO NOT assume that you can sell for profit within that limit! Ask your state licensing organization.
As an example here is what the State of Georgia states on their website about their 5 car limit.
I thought I could sell up to five vehicles in a year before I had to be licensed?
The “five cars per year” statement has been misinterpreted by many people. The origin of the “five car” phrase is the Used Motor Vehicle Dealers’ and Used Motor Vehicle Parts Dealers’ Registration Act. O.C.G.A. 43-47-2 (17)(A) states that “…the sale of five or more used motor vehicles in any one calendar year shall be prima-facie evidence that a person is engaged in the business of selling used motor vehicles.” This means that evidence indicating that a person has sold five or more used motor vehicles in any one calendar year can be used to show that the person is engaged in the unlicensed practice of used motor vehicle sales. This statement should be read in its context, and should not be misinterpreted to mean that a person may sell up to five vehicles in a year before becoming licensed.
You may still be able to buy and sell cars as a part-time business with a license within the guidelines of your state. Let me show you how …………………………continued
PAGE 11…. A WORD OF CAUTION – USING ANOTHER’S LICENSE!
I receive calls all the time from people who ask me about deals they find on the Internet or locally, to use another’s dealer’s license to buy and sell cars.
As an example: I recently was called by a young man in Missouri inquiring about my manuals. He was buying and selling a few cars to make additional income needed to support his family. I asked him how he was doing it.
Here’s his story and my concerns.
He had met a guy who has a dealer’s license. He was attending the auctions with this “dealer”. He would pick the cars he wanted. The “dealer” would bid on them and purchase the vehicles under his license. My caller than paid the “dealer” the price plus a fee of $500 for each car. My caller would then take the cars home, sell the car to a consumer with the classifieds and make his profit.
I asked him how the title was being processed. He said that the title was still assigned to the “dealer” and when he (my caller) found a buyer, the dealer would process the title work.
I told my caller he needed to check with the state to validate the legality of these transactions.
My concern was that since he’s paying the dealer for the car plus $500.00, he is the owner and state laws require that title transfer to him must take place so the state can collect the sales tax. States don’t like anyone to circumvent sales tax!
Not signing the title over to my caller is called, in the business, an “open title” which is illegal in all states. When ownership, by the exchange of money, is transferred from one person/business to another, the title must show this. One cannot “own” a vehicle without the title being signed over to the person buying it.
PAGE 13 …RENT A DEALER LICENSE.. ARE YOU KIDDING?
You’ll see web pages advertising, “Rent a Dealer License”. You pay a monthly fee and you are put on their license or work a deal with another dealer so you can attend dealer only auctions. There are so many legal issues with these “rent a dealer license” offers.
PAGE 17 ….THREE VERY SUCCESSFUL USED CAR BUSINESS MODELS
The first is the one I previously mentioned who has his dealership in a contractor condominium. By doing this he can sell on the web without all the overhead costs of a typical car lot. He found a location that fulfills the state’s requirements but it does NOT look like a lot.
This model is the best one if you want to sell a few cars a month. The success of this model is completely dependent on finding a location that meets the state requirements- nothing more, nothing less.
Another option with this model to co-locate with another business which I gave an example on page 10.
PAGE 20….RECONDITIONING CARS
Getting a car ready for sale is an absolute requirement. In the three dealer examples, one had his own repair shop. I do not recommend this for an independent dealer until the sales volume can support the costs.
The reason for my reluctance is when you open a service center you’re opening another business that is completely different than a used car business. It has to be managed, staffed and made cost efficient. It has to be busy 40+ hours a week. It must provide service and repair for the general population, not just to customers who have purchased vehicles from you.
It is my opinion, contracting out your service prep is a better option and here’s how to do it…………………………………………………..continued.
……And 130 more pages of valuable info. See Index above.
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