How much does it cost to get a dealer license?

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This question really depends on what you want to do with the license. Lets explore a couple scenarios then I will brake down the costs of each. First one is someone who wants minimal entry costs, wants to do it part time and maybe grow it into something bigger down the line. Usually this person will have a full time job and use a dealers license to supplement their income. They may have a background in sales or just be an automobile enthusiast. Second scenario someone who wants to jump into the business with both feet, run the dealership as there full time gig basically buying themselves a job. Background might be in auto sales or dealer management looking to break off on their own.

COST REQUIREMENTS

The requirements are the same, as far as obtaining the license, for each of the above scenarios. You need a place of business approved for an auto dealership, bond, insurance, 6hr of pre-licensing education, business license and resale permit to complete the application requirements in California.  The cost to the state is a fairly low amount of about $300. Where you choose to operate from will probably have the biggest impact on overall costs. I have seen “approved” offices for as little as $300 a month and big car lots in California can be tens of thousands a month! The bond for a dealer is $50,000 and the price reflects the persons credit score so anywhere from $500 to $5000 for the year due upfront. Insurance will vary depending on many factors: area, total dollar amount of inventory and driving record to name a few.

So, to sum it up, on the low end you could be a dealer for around $2000! Not a bad entry few to set up a licensed business. On the other side a small dealership would take upwards of $20,000 just to open the doors. Of course you need inventory to sell. The cost for this is a whole nother many posts so keep an eye out!

 

 

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