The initial process towards establishing your operations as an auto dealer is filing a surety bond with the resident state’s DMV.
The Licensing Process
Following the bond filing, you are entitled to apply for an auto dealer license to sell vehicles in that state. The second step is purchasing bonds to protect the customers and state from fraud by dealers. Before going any further, find out what agency regulates auto dealers in your state for accurate information. That agency will process your license application. You will need to have aspects of your business established before a license is granted. It’s smart to have your business ready when the state grants a license.
Marketing and Compliance
Dealers typically run advertisements locally for customers, but most of the business is generated by referrals. Car dealership statistics have shown that 68% of buyers are more likely to purchase a vehicle from a dealer who is in compliance with federal regulations.
The Car Buying Process
What are the 5 steps of the car buying process?
- Filing a surety bond with the state’s DMV
- Applying for an auto dealer license
- Purchasing bonds to protect customers and the state
- Checking with the regulatory agency in your state
- Having your business prepared for license approval
Expectations from Car Dealerships
When visiting a car dealership, customers can expect that the dealership has completed the necessary steps to operate legally and ethically within the state, which includes being in compliance with federal regulations.