How to Get a License to Buy Cars at Auctions and Find Car Auctions Near You

Purchasing cars at auctions can be an excellent way to get vehicles at a lower cost, especially if you’re looking to enter the car reselling business. However, if you want to access dealer-only auctions, where some of the best deals are found, you will need a car auction license, also known as a dealer license. Here’s how you can get one and find car auctions near me.

How to Get a Car Auction License

To participate in dealer-only car auctions, you will need to obtain a dealer license. The process for obtaining this license can vary from state to state, but the general steps are outlined below:

1. Determine Your State’s Requirements

Every state has specific regulations regarding dealer licenses, including prerequisites for the type of business you wish to operate (wholesale or retail). Here are some common requirements:

• Business Formation: Register your business with your state’s Secretary of State. You can set up a sole proprietorship, LLC, or corporation, depending on your goals.
• Business Location: Most states require you to have a physical location to operate your dealership. This location must meet certain zoning and signage requirements. Some states, however, have exemptions for those applying for a wholesale dealer license, which allows you to operate without a retail lot.
• Surety Bond: You will need to obtain a surety bond as part of the application process. This bond protects consumers if your dealership engages in unethical business practices. The bond amount varies by state but typically ranges between $10,000 and $50,000.

2. Complete a Pre-Licensing Course

Some states require applicants to attend a pre-licensing course before they are eligible to apply for a dealer license. This course covers the legal aspects of running a dealership, compliance with state regulations, and consumer protection laws.

3. Submit Your Dealer License Application

Once you meet the requirements, you can submit an application to your state’s Department of Motor Vehicles (DMV) or Department of Licensing (DOL). You’ll need to provide the following:

• Proof of business registration
• Sales tax identification number
• Surety bond documentation
• Business location details (for retail licenses)
• Criminal background check
• Insurance coverage

4. Pass a Location Inspection (for Retail Licenses)

If you’re applying for a retail dealer license, your business location may need to pass an inspection to ensure it complies with local zoning and safety requirements. Wholesale dealers, who only sell vehicles to other dealers, often do not need a retail location.

5. Pay Fees

There are often fees associated with the application, including licensing fees, background check fees, and fees for the pre-licensing course.

Once approved, you will receive your dealer license, which grants you access to dealer-only auctions where you can buy cars at wholesale prices.

Car Auctions Near You

Finding car auctions near you can be done through several methods, depending on whether you’re looking for public or dealer-only auctions.

1. Public Car Auctions

Public car auctions are open to everyone and are typically held by auction houses, government agencies, banks, or insurance companies. You can find public auctions near you by:

• Searching Online: Use search engines to find “car auctions near me” or look for websites dedicated to auction listings like AuctionZip or GovDeals for government auctions.
• Checking Local Auction Houses: Many auction houses hold regular public car auctions. Check their websites for upcoming events.
• Government and Police Auctions: Local and federal governments, as well as police departments, often hold auctions to sell seized or surplus vehicles. Websites like GSA Auctions and GovPlanet provide listings for government car auctions.

2. Dealer-Only Auctions

If you hold a dealer license, you will have access to dealer-only auctions, which offer vehicles at wholesale prices. These auctions are not open to the general public and often include newer vehicles from leasing companies, trade-ins, and repossessions.

To find dealer-only auctions near you:

• Auction Directories: Websites like Manheim, ADESA, and AuctionACCESS provide listings of dealer auctions across the country.
• Dealer Networks: Once you’re a licensed dealer, you’ll receive notifications from auction houses and networks about upcoming auctions you can attend.

Getting a car auction license opens doors to a wide range of opportunities, from buying cars at wholesale prices to starting your own dealership. While the process requires careful attention to state-specific regulations, the rewards can be significant once you have your license in hand. Whether you’re looking for public or dealer-only car auctions, doing your research and preparing ahead of time will ensure you make the most of your car auction experience.