How to Become an Independent Used Car Dealer in Miami, Florida

Becoming a used car dealer presents a wealth of opportunity for a small business. This opportunity can give an individual the independence to sell cars a source of income. According to the National Independent Automobile Dealers Association, used cars represent the bulk of retail car sales in recent years. In order to make a living as an independent used car dealer, it is important to obtain a dealer license. Any person who hopes to sell three or more cars within a 12-month period must apply for a dealer license under Florida state law. Once you have successfully completed the application process, you will receive an independent dealer license and have the foundation in place to run a successful used car dealership.

License Types

In order to sell motor vehicles in Florida, one must obtain a current Florida State Auto Dealers License. Because there are different types of motor vehicle licenses, you must decide early what type of motor dealer license you wish to obtain. Each type of motor vehicle dealer has a separate license to ensure that they comply with local and state guidelines. In Florida, there are four different motor vehicle license types:

Independent dealer (retail and wholesale)

Franchise dealer (new cars from manufacture and used cars)

wholesale dealer (buy and sellĀ  to other licensed dealers)

Auctions (sell through bidding)

In order to become sell used cars to the public in Miami, Florida, you should apply for an independent dealer license. As an independent dealer, you will be licensed to sell used cars to the public. As an independent car dealer, you will be able to sell used cars through both retail and wholesale transactions. Any person who wants to obtain the license will need complete the full application process for a used car dealer’s license in the respective regional location. In Miami, Florida, dealer’s license requirements are designed to verify that you are compliant with Florida auto dealership laws. There are several steps that you must take before starting and submitting an independent license application.

Zoning and Dealership Requirements

Individuals must first visit the office of their regional compliance officer at their local Florida Division of Motor Services office. At the compliance office, individuals must obtain a copy of the guidelines and inspection checklist for choosing the right car sale dealership location lot. The state of Florida requires that a business owner has an approved dealership location site before applying for the license. This is to ensure that serious individuals have taken the steps to begin a viable used car dealership.

There are important considerations to keep in mind while choosing the location of your state-compliant car dealership business. The first step in choosing the location is to contact the Zoning and Permits Department in your area to find the most current zoning requirements for your zip code. These zoning and permit requirements may change each year, so it is important to obtain the most current information directly from the office. The next step is to scout out property that is zoned for business use according to regulations. It is important to make sure that your property is appropriate as a retail or dealership location in your area. Any location in which you sells cars must meet the state Used Car Dealer Retail License Lot Zoning requirements, as outlined by the zoning and permits office.

Once you have located the property, the next step is to take pictures of the property in which you plan to run your auto dealership. These pictures are required with your application for licensing. Be sure to include photos of the landscape and property, office buildings and client space, as well as any other related real estate documents you may have. Once you have the proper location, documentation, and related materials, you may submit your documents and processing fees to the Regional Compliance Officer for examination. The Regional Compliance Officer will then schedule a time for inspecting the dealership location in which you intend to run your business. Once the dealership location site has been approved, you are ready to begin your application for the independent dealer’s license.

Licensing and Application Requirements

Once the Regional Compliance Officer has approved your business location, you may proceed with the application process. You may obtain an application form online from the Florida Division of Motor Vehicles (DMV) website, or you may visit the state regional office to obtain a printed form. You will also need to locate a state-approved car dealership training school and sign up for required dealer training. The state of Florida requires that independent dealer license applicants complete 16 hours of dealer training prior to selling used cars in Florida. You may obtain a list of approved dealer training schools from the Florida DMV website or from the regional office. Once you have attended your training sessions, you should obtain a certificate of completion in order to submit with your final application.

You will also need to meet certain monetary requirements before completing your application. Each applicant must have an application fee of $300 per dealership location, plus processing fee of $54.25 for fingerprints and a background check. You can obtain standard fingerprint cards from the DMV office and complete fingerprints at a Florida police station. In order to begin the business, each applicant must also obtain an original $25,000 surety bond from a bonding company or the equivalent letter of credit from a Florida-based bank. Each bond or letter of credit must be signed along with the cover sheet that you can obtain from the DMV regional office or website. The vehicle dealer bonds are meant to ensure that you are financially prepared to take on the scale of a car dealership business.

There are also important legal requirements that you must fulfill in order to submit your application for an independent dealer’s license. In order to run a used car business in Florida, you must register your car dealership with the Florida Divisions of Corporations as either a Limited Liability Company, Corporation, or Partnership. You may check with the Florida Department of State website to help determine which type of business entity you need. You must also register a DBA or fictitious business name along with your business information. All registration fees for the business entity you choose must be paid to the Florida Department of State. You must then save copies of your registration in order to submit with your final dealer application.

In compliance with tax requirements, each applicant must obtain both a federal employer identification number (EIN) and a Florida state sales-tax ID number. You may visit the Internal Revenue Service (IRS) website or call the toll-free number to obtain a free federal EIN. You can obtain the free Florida state sales-tax ID number by visiting the Federal Department of Revenue website and applying online. Save copies of both number confirmations in order to submit with your final application.

The state of Florida also requires applicants to have proof of business insurance before submitting the car dealer license application. In order to sell used cars, an independent car dealer must garage liability insurance, a $25,000 bond or a letter of credit.

Application Submission and License Renewal

Once you have fulfilled all requirements and have obtained documentation, you may fill out the required application form. You can obtain the form online from the Florida Division of Motor Vehicles website or from your regional office. Submit the completed application, fees, and supporting materials to the address provided. While the application process may seem thorough and time-consuming, it is important to meet all license requirements before attempting to sell used cars. Failure to obtain a license before starting your dealership can result in a second-degree misdemeanor charge, with a penalty of six months in prison and a $500 fine. Unlicensed sellers may also be found liable under the Florida Deceptive and Unfair Trade Practices Act and receive fines of $5,000 per violation along with circuit court injunctions. It is better to complete the application process the first time and sign up for required annual renewal. When renewing your license, include the $75 yearly renewal fee and proof of eight hours of annual dealer trainer from a state-approved training school.

 

References and Resources:

Florida Department of Motor Vehicles Regional Offices

http://www.flhsmv.gov/dmv/BUR_Field_Ops_Address.pdf

License Application Form

http://www.flhsmv.gov/dmv/forms/BFO/86056.pdf

State-Approved Dealer Training Schools

http://www.flhsmv.gov/dmv/forms/BFO/86056.pdf#page=13

Corporation, Tax ID, and Bond Forms

http://sunbiz.org/downloads.html

http://dor.myflorida.com/dor/forms/index.html#account

http://www.flhsmv.gov/dmv/forms/BFO/86020.pdf

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