A dealer license is required in many states, including California, in order to legally buy and sell cars, and to discuss a vehicle purchase with consumers. The license allows car dealers to operate a dealership according to applicable laws and regulations. To obtain a dealer license, applicants must meet certain requirements depending on the state they are applying in.

In order to obtain a dealer license, applicants must generally meet certain requirements depending on the state. Requirements typically include proof of a permanent business address, ownership or authorization for the dealership location, and a surety bond or other form of financial security. Applicants may also need to provide proof of liability insurance, vehicle registration records and inspection documents. Depending on the state, there may be additional requirements such as passing an exam or providing references.

In California, there are three main types of dealer license: New Vehicle Dealer License, Used Vehicle Dealer License, and Wholesale-Only Dealer License. In order to get one, applicants must provide proof of their permanent business address, liability insurance, and more. They must also possess a valid surety bond in an amount established by the state. Applicants may also need to provide additional documents such as registration records for all vehicles to be sold or leased, inspection documents, reference letters from current and past customers, bills of sale and copies of title histories. Additionally, some applicants may be required to pass an exam before obtaining a dealer license.

In most cases, applicants may need to pass an exam before obtaining a dealer license in California. The exam typically covers topics such as state and federal laws regarding selling vehicles, basic questions on administering sales transactions, and other general knowledge related to vehicle sales.

Wondering if you should choose a sole proprietorship, an LLC, or a corporation? As a car dealer, choosing to be an LLC or a corporation can offer numerous advantages. For starters, it creates a separation between you and your dealership operations that can help protect your personal assets in the event of legal action. It also allows you to expand the business according to state regulations and limits liability for owners, directors and members. Additionally, there may be tax benefits associated with using an LLC or corporation structure. Talk to your accountant and/or lawyer to see which option is best for you.