There is no national dealer license. There are fifty of them.
The same business, licensed three different ways. What each state publishes about the bond, the building, the sign and the test, taken from the agencies themselves.
Every step-by-step guide to getting a dealer licence describes the forms. The forms are the easy part. What stops people is that each state has decided, independently, what a dealership physically is, and the biggest used-car states do not agree on any of it.
Each page below works through one state from its own agency's pages and forms, and names the figures that agency does not publish instead of inventing them.
The states side by side
| Texas | Florida | California | N. Carolina | Ohio | |
|---|---|---|---|---|---|
| Licence fee | Not given | $300 | $175 | $97 | $50 |
| Surety bond | $50,000 | $25,000 | $50,000 | $50,000 | $75,000 |
| Net worth | None | None | None | None | $75,000 |
| Office | 100 sq ft | 100 sq ft | Not given | 96 sq ft | 180 sq ft |
| Lot | 5 vehicles | Whole stock | Not given | Not given | 3,500 sq ft |
| Sign letters | 6 inch | 50 yd | Not given | 3 inch | 6 inch |
| Hours open | 16 a week | No minimum | Not given | Not given | 5 a week |
| Course | 6 hrs | 16 hrs | Not given | 12 hrs | 6 hrs |
| Exam | None | None | 3 attempts | None | None |
| Free sales | Not given | 2 | Not given | 4 | Not given |
| Site checked | Checklist | Pre-filing | After filing | Pre-filing | Any time |
Read across any row and the idea of a national checklist falls apart. Read down the last one and you get the thing that actually costs money: when the state looks at your building decides whether you can sign a lease before you know the answer.
What is the same everywhere
Four things turn up in every state that publishes anything at all:
- A surety bond. You pay a premium, a percentage set by your credit, not the face value. The bond protects your buyers, not you
- A real commercial address. No residence, no virtual office, no mailbox. This is the line nearly everyone trips over, and it is the one that costs rent every month whether you sell a car or not
- A background check. Fingerprints for every owner and officer, usually through a state-approved provider
- A pre-licensing course, run by approved providers rather than the state itself
And one thing that is never published anywhere: how long it takes in practice. California commits to investigating within 120 days. Texas says times vary. Florida, North Carolina and Ohio say nothing at all.
Before you pick a state
Two questions come first, and both are covered in more depth on the blog.
Do you need a dealer license to flip cars is the threshold question: how many you can sell in a year before the state wants you licensed, and what crossing that line actually triggers. How to get a dealer license is the long version of this page, including the order to do things in, which is where most of the avoidable money is lost.
Where the licence shows up in your margin
The licence is the cheapest line in the first year and the one everybody budgets for. The building is the expensive one, and it is the one that gets estimated.
Rent, the sign, the bond, the insurance, the plates, the hours somebody has to be present: none of it attaches to a car, which is exactly why it disappears from the mental maths and reappears at the end of the year as the difference between a business that worked and one that was busy.
Deelary keeps every cost on the car it belongs to, so the total cost, the margin and the days in stock on screen are the real ones. Free for two active cars on iPhone and iPad. What a good gross profit per car looks like is the number to check your own against.
Questions
Is there one national dealer license?
No. There is no federal dealer licence and no national checklist. Each state licenses dealers itself, sets its own bond, its own premises rules and its own education requirement, and a licence from one state does not let you retail in another.
Which state is cheapest to get a dealer license in?
The fee is the smallest number in this business, so the question is usually the wrong one. Ohio publishes $50, North Carolina $97, California $175, Florida $300, and Texas does not publish its fee at all. Ohio is also the one state that makes you prove a $75,000 net worth, which matters far more than its cheap fee. The bond premium, the course and the rent on a compliant building are what the first year actually costs.
How many cars can I sell before I need a license?
It depends on the state. Florida sets the line at three or more motor vehicles in any 12-month period, which leaves two. North Carolina sets it at five, which leaves four, and counts offering or displaying as well as selling. The window rolls rather than resetting each January.
Can I get a dealer license without a lot?
Sometimes, if you go wholesale only. Texas states that a wholesale dealer is not required to have a display space. California exempts wholesale-only dealers from both the display area and the sign. You still need the office, and wholesale means you may only sell to licensed dealers.
Why do these pages leave some numbers out?
Because the state leaves them out. Every figure on these pages comes from the licensing agency itself, and where an agency does not publish something, the page says so rather than filling the gap. Guides that quote a confident number for an unpublished fee are quoting something other than the state.