Used Car Dealer Licensing Questions:

[gotmonte]

I been trying to do some research about becoming a used car dealer in New York. But I keep coming in contact with different people who tell me different things. Most these people are either still in the field of question, or used to be in the field.

My MAIN question is:
1)- Can you become a Licensed Used Car Dealer in New York or New York City without having a car lot? I wanted to use my house (2 car driveway and a garage) which houses up to 3 cars off the street at one time.
I have come across people saying YOU NEED a ten car lot inspected by the building inspector and insured. Some people say they never had to do that and they sell the cars from their house and never have had a lot and their house only car store a few cars at most.

2)- How do you go about obtaining the Used Car Dealer License?

3)- What requirements do you need to obtain a Transporter License. And having a Transport License, does this take care of the Dealer Plates?

4)- Do you have to have insurance to be a Used Car Dealer or can your regular car insurance cover you? Example; You drive a car with dealer plates and someone hits you, are you covered by your insurance policy from your regular daily driver car's insurance? Say I am driving your car and I kill someone. And the car is not insured, unbenounced to me, doesnt MY insurance cover it? I hope you get my question. As I type it out it sounds weird.

5)- If you have a New York State Dealer License, can you go to lets say Pennsylvania Car Auction and buy a car on your NYS Dealer License? Or do you need each States License to BUY a vehicle in that specific State? I only want to sell vehicles out of my driveway in NEW YORK (specifically Suffolk County, Long Island)


Any help would be greatly appreciated.

[GetMore]

I'm going to guess on #4: You need to have some special coverage for the business, just car insurance is not enough.
Another part of this answer is that I think you insure the plates. The insurance on your car is not going to be the same insurance as on dealer plates.

On #5, no, you don't need a license for each state. The "dealer" license is to sell the cars. Some auctions are open to the public and others are open only to dealers. As long as you have the proof that you are a dealer you can get into the auction and buy a car.

[Restomod]

I would say the BEST thing to do it to call the DMV sction that does the dealer license and ask them. You may still get different answers but may still be better way to go.

[Steve Firebird]

http://www.dealer-license-requirements.com/

try this

[vintageracer]

Every state has a division/department within state government that regulates auto dealers. Look on the New York state website. You will find all the rules/regs posted there. It's pretty cut and dry. Meet their rules, get a license. The NY website should answer all your dealer license requirements questions including insurance requirements, license requirements and location requirements.

Some states have different types of licenses such as retail or wholesale only. Wholesale only dealers licenses are pretty much useless unless that's all you will be doing is buying and selling to DEALERS only!

You can expect most every state to require a lot for a retail dealer. The state dealers trade association generally makes sure of that so everyone has a level playing field. "Curbstoners" as they are refered to in the trade are individuals who buy/sell cars without a license AND sell their cars with an "Open Title". An "Open Title" is where the legal seller who is the legal owner listed on the front of the title sells the car to an individual (the buyer). The seller signs the back of the title but the buyer does NOT fill out the title in the "Buyer Section" of the title. This buyer then re-sells the car again to another purchaser with his name never appearing anywhere in the transaction. Buying and selling cars "Open Title" is ILLEGAL in every state in the US. It's done ever day by many individuals. Just look at your local Craigslist cars for sale ads and see the same "private" sellers listed over and over again with different cars for sale every week. Getting caught selling cars "Open Title" ranges from a Misdemeaner to a Felony depending on your state of residence. In some states selling cars Open Title becomes a sales tax fraud issue which becomes a REALLY big problem that you DO NOT want to have. Rest assured that your state and local revenue officers are also watching Craigslist for sellers that are NOT licensed dealers that continually have cars for sale. Sooner or later those revenue officers will make a visit to see the car you have for sale and find out what they ALREADY KNOW which is that you are NOT the legal owner of the car based upon the title/registration and you are BUSTED!!!

Most states make it a little difficult to become a dealer to keep the hobbyist out of the business from just trading his own cars to avoid sales tax or insurance requirements. That is certainly the case in Tennessee. You might be able to become a licensed "salesman" in New York through an existing used car dealer if NY licenses car salesman also. You would then "run" your inventory through that used car dealer. That's done in a lot of states where you pay the licensed dealer a fee ($100-$300) a car for every car you buy/sell since you are a licensed salesman at this dealership. You STILL have to buy and sell your cars at the dealership location.

Being a dealer is a BUSINESS and requires BUSINESS insurance and BUSINESS licenses. Most State and/or Local City Zoning Laws will KILL your "Let's Sell Used Cars Out of My Driveway" idea. If it was easy EVERYBODY would be a car dealer. Remember, the other dealer's already in business WANT you to enjoy the SAME overhead expenses that they enjoy!

That's why they call buying and selling cars the CAR Business and NOT the Car hobby!