Automotive Investment Principles
Its amazing how investing in the stock market is similar to investing in used cars. I am fascinated with Warren Buffett. I read everything I can get my hands on about him. He is the master stock market investor.
Warren’s wisdom about stock investing can be directly related to trading cars for a living. Lets explore four beliefs he has about investing and how they apply to the car business.
1. Circle of Competence
Its important to know what you know and more importantly what you don’t know. Invest in the things you know and ignore the rest.
I get asked, quite often, “George, what kind of cars should I buy?”. My basic response for beginners is to buy what you know. If you have driven honda’s your whole life, thats probably a good place to start. You know how they ride, what noises to listen for, what the common problems are, …. MUCH better than a guy who has only driven Subarus. Right?
My second suggestion is to always try to expand your circle of competence.
2. Margin of Safety
Always buy with a margin of safety. Never pay too much. Your rate of return on your investment will be determined by the price you pay. Never pay too much because there are always things you don’t know about the car. SO use that margin of safety to work in your favor.
If the car is worth $5,000, don’t pay $5500 just to own it. You see it is totally possible you don’t know everything about the car. In fact, I bet you don’t know everything about the car. There is an associated risk with buying any car or truck. There might be unknown repairs that need to be made once you get it to your mechanic. If you bought the car with a margin of safety, say $4500, you have $500 you can use for the unexpected repairs. OR, maybe, it will take longer to sell the car than you imagined and you will need that margin of safety for more advertising.
Remember: Buy with a margin of safety.
3. Mr Market
Mr Market is your paranoid schizophrenic partner in the car business (or more directly he might be your wholesaler, your local auction, or just the marketplace in general – in Warren’s case, its the stock market).
Everyday Mr Market, with no thought or reason, makes available cars that can be bought at various prices. You can either take Mr Market up on his offering price for the car or you can say no & wait for a better deal.
Be mindful that you can always ignore Mr Market and wait for the next car for a better deal!
4.Resource Allocation
Your ultimate power and most critical decision is where to allocate your resources. Your main resource is your time and money. If you buy a car for too much money or one that requires too much work – it drains your resources. Be wise where you allocate your resources.
You are using some resources to buy my study course. Mainly money but also time to learn a new skill – how to buy cars for profit. Its an investment into your knowledge. Its an investment that should yield a fair return. As a side note, if you are trainable, you can learn this business!
Success!!
George Dean
Car Dealer Bonds
Need Help getting garage insurance or a bond?
- For a free quote, please call Cameron M. Harris & Company at 800-476-8728 and one of their representatives will be glad to assist you.Garage Liability: A necessary coverage for automobile dealers. It provides you protection against the liability arising out of bodily injury of property damage at your premises, operations, of work performed. It can include optional coverages such as errors and omissions protection (involving Truth in Lending, Odometer, Agent, and Security Interest), Dealers Open Lot, Garage Keepers Legal Liability, and other special needs.
Workers’ Compensation: Coverage designed to help you meet state mandated coverage requirements at attractive rates. This insurance protects employees who are injured on the job as the result of an accident.
24-Hour Accident Protection: When Workers’ Compensation is not required, but you still want partner/employee protection, this inexpensive alternative is available.
Inventory Protection: MAFS has put together Floor Plan Protection for financed vehicles that provides coverage for physical damage including theft, collision, vandalism, hail, flood and other coverages normally associated with Dealers Open Lot coverages. The monthly premium for this coverage is based upon your outstanding balance on financed vehicles. This coverage is similar to the Floor Plan coverages offered to franchised dealers through their factory finance source.Umbrella Coverage: Offers higher limits in million dollar increments to protect the assets of your business.
Dealer Bond: Helps you meet yet another state mandated coverage requirement in a cost effective manner.
- AcordiaAcordia, Inc., a Wells Fargo company, provides a wide range of financial and insurance products to NIADA members and their employees including: health, life, short/long term disability, dental/vision, long term care, college funding programs, retirement plans, garage liability, dealer physical damage, general liability, property, dealer bonds and many more coverages. For more information call Tracy or Cheryl McManamon toll free at 1-888-902-5333
- Old Republic Surety Company
- For auto dealer bonds and insurance in CA
NOTE: Where possible, I listed each states Independent Auto Dealers Assocation. They can usually help with bonding and liscensing concerns.
Alabama
A $5,000 Surety Bond or a net worth statement for $25,000 or more is required. Dismantlers must present a bond showing a net worth of no less than $100,000.
http://www.alabamaiada.com/
Alaska
$50,000 bond required; $3,000 for motorcycle dealers.
Arizona
Surety bond of not more than $50,000 for each type of license for each county where dealer has established business; required for each location.
Arizona IADA 5517 N. Black Canyon Hwy. Phoenix, AZ 85015 602-246-1498
Arkansas
Franchise dealers must post a $25,000 bond with the Arkansas Motor Vehicle Commission to obtain a license. Used car dealers must post $25,000 bond with the State Police.
http://www.arkiada.org/
California
$50,000 bond required.
http://www.iadac.org
Colorado
A $30,000 bond must be posted upon application for license.
http://www.ciada.org/ciada.html
Connecticut
Required; $5,000 for repairers and limited repairers; $20,000 for new and used vehicle dealers. Submitted in the name of the licensee prior to license issuance.
Delaware
There are no bond requirements for dealers.
http://www.miada-diada.com/
District of Columbia
A $10,000 bond is required; filed with the Department of Consumer Regulatory Affairs.
Florida
All motor vehicle and mobile home dealers are required to file a $25,000 Surety Bond. An irrevocable letter of credit may be substituted for a motor vehicle dealer’s bond. Recreational vehicle dealers require a $10,000 bond. For more than 4 additional lots, MH dealers require $50,000 bond, and RV dealers require $20,000 bond.
http://www.fiada.com/
Georgia
A $20,000 bond is required of all vehicle dealers.
http://www.giada.org
Hawaii
Bond is not required, however, a $50,000 line of credit from a financial institution is required.
Greg Le Lesch, Secretary/Treasurer 1001 Ahua Street Honolulu, HI 96819 808-840-8900
Idaho
A $10,000 bond is required for motorcycle, ATV and snow machine dealers; $20,000 for all others.
Douglas Gaskell, Executive Director Idaho IADA 813 N. Mitchell Boise, ID 83704-8161 208-376-9517
Illinois
$20,000 for 36 months.
Indiana
Bond is not required.
Debbie Andersen, Executive Director Indiana IADA PO Box 1393 Crown Point, IN 46308 219-661-0287
Iowa
$50,000 Surety Bond must be filed with the Department of Transpiration.
Kansas
$5,000 to $20,000 is optional.
Kansas IADA 529 Humboldt, Suite K Manhattan, KS 66502-6073 785-776-0044
Kentucky
$15,000 may be required.
Louisiana
A $20,000 bond for new vehicle dealers; $10,000 for used vehicle dealers.
Louisiana IADA 7440 Exchange Place Baton Rouge, LA 70806-1531 225-922-9910
Maine
Required for all dealers except light trailer and light boat trailer dealers. Bond amount is established by the number of vehicles sold by the dealership:
Vehicles Sold Bond Limits Vehicles Sold Bond Limits
0-50 $5,000 151-200 $20,000
51-100 $10,000 201 and over $25,000
101-150 $15,000
Maryland
Based upon sales volume, surety is required for all dealers.
http://www.miada-diada.com/
Massachusetts
None required
Michigan
$10,000 bond required.
http://www.miada.org/
Minnesota
$50,000 must be filed by all dealers; $5,000 for boat, snowmobile, trailer and motorized bicycle dealers.
http://www.northlanddealers.com/
Mississippi
A $15,000 Designated Agent’s Surety Bond is required for all licensed dealers. Filed with the application for a dealer’s license.
Mississippi IADA PO Box 1081 Ridgeland, MS 39158-1081 601-957-1010
Missouri
$25,000 Corporate Surety Bond.
MADA Dealer Bond Service
Franchised and used car dealers may secure their $25,000 dealer bond through MADA. This bond is required by law and must be submitted with your application for dealer’s license.Check it Out
Montana
Franchised dealers, used car dealers, recreational vehicle dealers, auto auctions, wholesalers and trailer dealers who sell mobile homes, house trailers and commercial trailers exceeding 6,000 lbs. GVW are required to post $25,000 bond. Wholesaler and trailer dealers selling trailers under 6,000 lbs. GVW and motorcycle dealers must post $10,000 bond.
Montana IADA PO Box 1264 Miles City, MT 59301 406-232-2207
Nebraska
$25,000 bond is required.
Nebraska IADA PO Box 29107 Lincoln, NE 68529-0107 402-464-2089
Nevada
A $50,000 Surety Bond is required.
New Hampshire
A $20,000 to $10,000 depreciating bond, or a $1000,000 blanket bond through the New Hampshire Automobile Dealers Association. The two dealer categories are Bonded and Licensed. Bonded dealers are not issued dealer plates.
New Jersey
No bond is required.
New Mexico
A $20,000 corporate Surety Bond is required for auto dealers, salvage dealers, manufacturers, mobile home dealers and motorcycle dealers. A $12,500 bond is required for motorcycle dealers; no bond for boat dealers.
New Mexico IADA 608 Chama Street, NE Albuquerque, NM 87108 505-232-0809
New York
Bond is required
NYIADA
120 Washington Avenue
Albany, NY 12210
518-462-3333
North Carolina
$25,000 indemnity bond
http://www.theciada.com
North Dakota
All motor vehicle dealers are required to maintain a $25,000 Surety Bond with the department. All mobile home trailer and motorcycle dealers must maintain $10,000 surety bond.
http://www.northlanddealers.com/
Ohio
Not required
Automobile Dealers Alliance of Ohio 7870 Olentangy River Blvd., Suite 107 Columbus, OH 43235-1319 614-436-3396
Oklahoma
$10,000 bond is required on new car dealers, $25,000 on wholesale dealers, and $30,000 on manufactured home dealers.
http://www.e-oiada.com
Oregon
Effective March 1, 2000, insurance is increased to $20,000 for each year the certificate is valid; effective March 1, 2001, requirement is increased to $25,000 for each year the certificate is valid.
http://www.oiada.com/
Pennsylvania
A $20,000 bond is required.
www.piada.org
Rhode Island
All dealers must post a $15,000 Surety Bond with the Dealers License Commission.
South Carolina
A $15,000 surety bond is required.
South Dakota
Required. Amounts are: $10,000 bond for new and used vehicle dealers; $2,000 for motorcycle dealer; $10,000 for trailer dealers (required only for dealers who sell trailers weighing over 2,000 lbs.); $10,000 for mobile home dealers; $2,000 for snowmobile dealers.
http://www.northlanddealers.com/
Tennessee
Bond is filed with Motor Vehicle Dealer Commission.
423-653-7692
Texas
A $25,000 surety is required for motor vehicle, motorcycle, wholesale, and wholesale auction dealers for the licensed period unless the dealer is a franchised dealer or trailer dealer.
http://www.txiada.com/
Utah
Required. A $20,000 corporate surety bond for new or used vehicle dealers. A $1,000 corporate surety bond for new or used motorcycle or small trailer (750 lbs. unladen weight or less) dealers.
http://www.iadau.org
Vermont
Bond requirements. New and used car dealers must provide bond based on number of sales and must have real estate value of not less than $5,000 or more than $15,000.
Virginia
Original licensees are required to furnish $25,000 bond for the first three years in business. Bond required until dealership has three consecutive years without a claim against the bond or fund.
http://www.viada.org/
Washington
$15,000 for motor vehicle dealers, $30,000 for mobile home/travel trailer dealers ($15,000 for travel trailer only). $5,000 for miscellaneous dealers.
http://www.wsiada.com/
West Virginia
$2,000 bond is required for all dealers. Renewal licenses require a new Dealer Surety Bond (Form MV-126-DS-P).
Wisconsin
$5,000 to $100,000 bond may be required, if there is reason to doubt the financial responsibility or compliance of dealership.
http://www.northlanddealers.com/
Wyoming
A $10,000 Dealer Bond is required at the time of application for a license.
Dealer License Requirements
ALABAMA DEALER LICENSE
Dealers must obtain a Regulatory Permit from the Sales, Use & Business Tax Division. The permit must be presented to the county license issuing official for issuance of a Privilege License, and the Taxpayer Service Center for tag issuance.
Categories of Regulatory Licenses: New Car Dealer, Used Car Dealer, Dismantler, Wholesaler, Rebuilder, Reconditioner.
Dealers must fulfill the following requirements:
a. provide evidence that motor vehicle held for resale are covered by a blanket liability insurance policy
b. display a sign designating the place of business
c. describe and insure permanency of the place of business
d. provide display area for one or more vehicles and a place for maintaining books and records.
Motorcycle and trailer dealers are exempt from regulatory permit. Licenses are renewed annually in person or by mail.
Dealer License Fees:
$10.00 per category, plus $45.00
or up to $210.00 for the Privilege License depending upon the city or county of dealership
$225.00 for automotive dismantlers.
Alabama Dealer License Requirements
ALASKA DEALER LICENSE
Anyone in the business of buying and selling vehicles (acting as a dealer) must be licensed. License must be renewed every two years. Application and proof of bonding required.
Dealer License Fee: $50.00 for original application/renewal
ARIZONA DEALER LICENSE
The state assigns a permanent four-digit code for new and used vehicle dealers. Renewal is annual.
Dealer License Fees:
Original license and annual fee – $100.00
Branch license – $50.00 per location within county
Filing fee per application – $15.00
Provisional license – $10.00
Background investigation (per individual) – $24.00
Purchasing from an unlicensed dealer
ARKANSAS DEALER LICENSE
License issued by the Arkansas Motor Vehicle Commission is required for franchised motor vehicle dealers (buying/selling three or more vehicles in a year).
Dealer License Fee:
$100.00 per year for each dealership
$10.00 per year for each salesperson
Used car dealers must be certified by State Police, display proof of liability insurance, and file a $25,000 surety bond with the State Police. Boat dealers have no license requirements; however, trailer dealers must be certified by local law enforcement officers. If a trailer dealer accepts a motor vehicle as a trade-in, the vehicle must be licensed and titled in the name of the dealership. Trailer dealers are not granted reassignment privileges for motorized vehicles.
CANADA DEALER LICENSE
Start here: The Used Car Dealers Association of Ontario
Canadian Certification Program
Ontario’s Motor Vehicle Dealers Act
There are many canadian links for you to explore.
CALIFORNIA DEALER LICENSE
All dealers must be licensed with the State. A dealer number and corresponding dealer plates are issued.
Dealer License Fee:
$150.00 application
$100.00 renewal
New auto, commercial and motorcycle dealers must also pay the New Motor Vehicle Board a $100.00 fee.
COLORADO DEALER LICENSE
All car, truck, motorcycle and trailer dealers must be licensed to conduct business in the State. A license is not required for boat, special mobile equipment and off-road vehicle dealers. Applications must complete an application, submit a financial statement, post bond, pass a written exam, have an approved business location and submit to criminal background investigation. Licenses must be renewed annually; fees are adjusted annually.
CONNECTICUT DEALER LICENSE
New and used vehicle dealers, manufacturers, repairers, wrecker services and junkyards must be licensed. New vehicle dealers must be franchised by a licensed manufacturer. License issuance is subject to initial approval of local authorities. Upon approval, an application is submitted to the Dealers and Repairers Division of the Department of Motor Vehicles. Applications must be renewed biennially.
DELAWARE DEALER LICENSE
Private individual may sell four vehicles per year before being required to become a licensed dealer. All dealers must be licensed by the state by Division of Revenue through the Division of Motor Vehicles. Application must include the franchise agreement. Prior to the issuance of a license all dealer facilities must be inspected by a division representative (no inspection fee).
Dealer License Fee:
$100.00 upon application and renewal. Must be paid to the State Division of Revenue.
DISTRICT OF COLUMBIA
Dealers must be licensed to sell vehicles in the District. License is required for new and used vehicle dealers, and a license is required for salesmen. Licenses are issued by the Department of Consumer Regulatory Affairs. An investigation is performed prior to the issuance of dealer and salesmen licenses.
Contact: (202) 442-4400
FLORIDA DEALER LICENSE
Motor vehicle dealers must be licensed. Individual or business selling 3 or more vehicles in one year must have a dealer’s license. Licenses are renewed annually.
Dealer types: Franchise, Independent (Used), Wholesale, Auction, Mobile Home and Recreational Vehicles.
Applicants for a Franchised Dealer License must present a sales/service agreement and appointment letter or letters of intent from the manufacturer or distributor. All dealers must submit fingerprint cards upon initial application for a dealer’s license.
Dealer License Fees:
$300.00 application fee for all dealers
$39.00 for each fingerprint card
$40.00 for each mobile home or recreational vehicle dealer license application
$75.00 renewal fee for Franchise, Wholesale, Independent and Auction Dealers
$140.00 renewal fee for all MH/RV dealers
Florida Dealer Requirements
GEORGIA DEALER LICENSE
A Dealer License may be required for new vehicle dealers. Issuance is handled by each municipality. Leasing Companies and Independent Dealers who deal in used vehicles must be registered with the Used Car Dealers and Sales Tax Division. Mobile Home Dealers must be registered with the Fire Marshal’s Office. Motorcycle Dealers and Trailer Dealers are not required to be registered.
HAWAII DEALER LICENSE
New and used vehicle dealers must be registered. Registrations are issued by the State of Hawaii, the Department of Commerce and Consumer Affairs, and the Motor Vehicle Industry Licensing Board. Dealers must be franchised to sell new vehicles.
IDAHO DEALER LICENSE
New dealers must submit an application and present the contract from the manufacturer. (See Dealer/Salesman’s license, Exhibit “D”). New Dealer Code ‑ permanent three-digit number. Dealer plates and numbers are transferred upon sale of the dealership. Used Dealer Code ‑ permanent four digit number issued. Motorcycle, ATV, and snowmobile dealer requirements (new and used) are the same as for other dealers. Dealer’s license must be displayed. All applications are investigated.
Dealer License Fees:
$115.00 and $10.00 paid with picture I.D
$100.00 renewal fee
Idado Requirements
ILLINOIS DEALER LICENSE
All dealers must be licensed. Dealer establishment must be inspected prior to licensing. New dealers must present a franchise letter and all dealers must obtain a tax number issued by the Department of Revenue.
Used Vehicle Dealer License Fees:
$100.00 for Certificate of Authority
$25.00 for each additional establishment
Annual renewal.
INDIANA DEALER LICENSE
Vehicle Dealer: Must be licensed. Dealer must have a lot, a building not attached to or part of a residence, a display area for at least ten vehicles, a permanent sign with name and hours displayed, garage liability insurance in prescribed limits, and retail merchant certificate number. All classifications of dealers, except wholesalers, must sell at least twelve vehicles per year. Upon application the dealer must present proof of insurance, a photograph of the place of business, and the franchise agreement (required only for new vehicle dealers upon initial application).
Salvage License: Issued for recyclers, crushers, rebuilders and used parts dealers. Dealer must have three or more inoperable vehicles on the lot. A Salvage License does not grant reassignment privileges. Salvage operators cannot be issued dealer plates unless they meet the required dealer qualifications.
Fee: $ 10.00 annually
Transfer Dealer: Sale of vehicles is incidental to the business. Transfer dealers have restricted dealer plate use.
Fee: $20.00 annually
Wholesaler: Issued for a dealer that sells at least 120 wholesale vehicles per year with no retail sales.
IOWA DEALER LICENSE
Distributors, manufacturers, motor vehicle dealers, mobile home dealers, and travel trailer dealers must obtain a dealer license to conduct business. Licenses are issued by the Office of Vehicle Services, Customer Services Section, on a staggered system; issued for 2, 4 or 6 year periods. All applicants for a dealer license must have a place of business with a telephone installed and listed in the dealer’s name, repair and display facilities and an on& ite inspection.
Dealer License Fees: Dealers, manufacturers, distributors of travel trailers and mobile homes
$70.00 for 2 years
$140.00 for 4 years
$210.00 for 6 years
Phone: 515-237-3110,515-273-3219
KANSAS DEALER LICENSE
New and used vehicle dealers must be licensed and issued a dealer number. (Individuals or businesses selling over 5 vehicles in one calendar year must be licensed as a dealer). Manufacturers of vehicles must also be licensed.
Dealer License fees:
$200.00 for manufacturers
$50.00 for dealers
License expires annually on December 31.
New vehicle dealers require franchise agreement and an inspection of location (s), which must be zoned commercial, before license is issued.
Inspection Fee:
None for the primary location
$ 10.00 per secondary location(s)
Application must be made in person.
Dealers and salespersons are also investigated prior to license issue. Salespersons, distributors and factory representatives must fulfill state examination requirements.
Exam Fee:
$15.00 for salespersons
$25.00 for distributors and factory representatives
Report of monthly sales activity must be filed.
KENTUCKY DEALER LICENSE
Automobile, truck and motorcycle dealers must be licensed with the state. Trail dealers are not licensed. Dealer must have an established place of business and a business name which identifies them as a motor vehicle dealer.
Annual fee: $100.00
All dealers must have at least one licensed salesperson for each location for which a license was issued. Use tax must be paid for all new vehicles sold.
LOUISIANA DEALER LICENSE
Dealers must be licensed by the State. Upon application, new vehicle dealers must submit the franchise agreement. Used vehicle dealers cannot sell new vehicles. Any person who sells five or more used vehicles in any twelve-month period must be licensed as a used motor vehicle dealer.
Dealer License Fee:
$10.00 for new vehicle dealers
$200.00 for used vehicle dealers
$100.00 for each additional place of business (new and used)
MAINE DEALER LICENSE
A license is required for new and used vehicle dealers. An individual or business selling more than 5 vehicles in a 12-month period, displaying 3 or more vehicles within a 30 day period or buying vehicles for purpose of resale, qualifies as a dealer in Maine. Application is submitted to the Bureau of Motor Vehicles. The application must provide the following information: size and location of the lot; the size of the building, display, office and repair area. Applications must be signed by all parties and witnessed. The building lease must be valid for at least one year.
Dealer License Fees:
$150.00 filing fee and $150.00 licensing fee (both fees required upon application and renewal)
$150.00 annual renewal
MARYLAND DEALER LICENSE
Motor vehicle dealers must be licensed if he has sold more than 5 vehicles during a year. Dealer must have a location approved by an authorized representative of the MVA and must complete an application to be approved by the Business License & Consumer Services Division of the MVA, and must submit a bond in the name of the dealership. Laminated dealer photo license issued; annual renewal by mail is required.
Dealer License Fees:
$500.00 New and Used Dealer
$300.00 for boat trailer dealers and trailers 15 feet or less
30 day apporval time
MASSACHUSETTS DEALER LICENSE
Required for persons principally engaged as dealers (see class listing for specific requirements). Dealers must have a separate business office on the premises, maintain a Used Car Record Book approved by the Registry of Motor Vehicles, and post a sign displaying the type of business. Watercraft dealers must have a franchise letter from the manufacturer, a sign indicating the type of business and a separate place of business. Dealer Licenses are issued from the local City Hall; the Boston Police Department issues licenses for dealers based in the city of Boston.
Licenses are issued for the following dealer classes:
Class I – New and/or used vehicle dealer (business license required).
Class 11 – Used vehicle dealer (business license required).
Class III – Salvage parts/Junk (business license required).
Owner/Contractor – Must have ten vehicles (one of which is special mobile equipment &; SME), and garage to work in (business license required). Owner/contractor plates may be issued to: government agencies for public safety uses; persons engaged in leasing storage or mobile office trailers; persons engaged renting or leasing vehicles or trailers to the public (fleets of 20 or more)
Dealer License for Massachusetts
MICHIGAN DEALER LICENSE
An individual acquiring one or more vehicles with the intent of resale is considered a dealer and must be licensed. All dealers must include classification(s) on the application for annual license.
Dealer Classifications:
Class A – New Vehicle Dealer
Class B – Used Vehicle Dealer
Class C – Used Vehicle Parts Dealer
Class W – Broker
Class E – Distressed Vehicle Transporter
Class F – Vehicle Scrap Metal Processor
Class G – Vehicle Salvage Pool Operator
Class H – Foreign Vehicle Salvage Dealer
Class R – Automotive Recycler
MINNESOTA DEALER LICENSE
All dealers must be licensed. New and used vehicle dealer licenses must have a permanently enclosed commercial building on a permanent foundation, office space for records. Personal franchise agreement and means for repairing vehicles required for new dealers only. Used vehicle dealers must have a person to answer the telephone or an answering machine. Lessors and wholesale dealers must have an office, records and a person to answer the telephone or an answering service. Auctioneer requirements are the same as for new or used dealers, but may be based outside the state. A site inspection is required for all dealers prior to the approval of a dealer license. Dealer classes include new, used and broker, lessor, parts, scrap metal, wholesale, leasing, and auctioning. Boat, snowmobile and motorized bicycle dealers are required to be licensed.
Dealer License Fees:
$153.50 application and annual renewal fee
$103.50 if application is made after July 1
$13.50 for boat, snowmobile, and motorized bicycle dealers
MISSISSIPPI DEALER LICENSE
Applicants must have a place of business, an office, and must display a sign, and must file a bond with the application. An eleven digit designated agent number is assigned to each dealer. The number is carried on any issued title and in the dealer record.
Dealer License Fees: (initial and renewal)
$100.00 new and used vehicle dealers
$75.00 trailer dealers
$50.00 motorcycle dealers
Mississippi Dealer License
MISSOURI DEALER LICENSE
New, used, boat, wholesale, manufacturers, motorcycle and trailer dealers are required to be licensed if they sell six or more vehicles/boats per year. Application, a place of business, criminal record check and registration fee must be submitted. Statement of insurance certification required. License expires December 31 annually.
Dealer License Fees:
$150.00 motor vehicle dealers
$80.00 marine dealers
Fees are prorated on date of application.
Body shop/rebuilder, used parts dealer, salvage/dismantler or mobile scrap processor must register and have a bonafide place of business. Only salvage dealers and dismantlers can purchase vehicles from a salvage pool.
Fee: $65.00 per designation
Expiration is June 30 annually.
Out of state salvage dealers must register with the State.
Fee: $25.00
MONTANA DEALER LICENSE
To apply for dealer license, franchised dealers must submit a copy of the franchise agreement from the manufacturer. All other dealers must submit only license application. Applications are investigated prior to license issuance.
Dealer License Fees: New or used vehicle dealer
$30.00 with $30.00 annual renewal.
For applications after July 1, fees are reduced by half.
Call Motor Vehicles Division: (406) 444-4536
NEBRASKA DEALER LICENSE
All dealer branches, dealers and salespersons must be licensed. If an owner sells more than eight registered vehicles, motorcycles or trailers within one twelve month period, license is required. New car dealers must be franchised. Place of business, repair facility, 10 car parking lot, and a surety bond are required for application. An inspection is made to verify fulfillment of requirements.
Dealer License Fee: $160.00 annually
NEW HAMPSHIRE DEALER LICENSE
Dealers must be licensed with the state. Prior to license issuance, applicants are investigated by an agency Inspector, and must also be approved by local authorities. License renewal is March 31, annually.
Dealer License Fee: $125.00
Dealer classifications include New, Used, Junk, Repair, Transporter, Utility, Motorcycle and Wholesaler.
Dealer License for New Hampshie
NEW JERSEY DEALER LICENSE
All new and used car dealers, leasing companies and Auto Body Repair facilities must be licensed. Applications for license are submitted to the Dealer’s Unit, Business License Compliance Bureau. Dealer plates and registrations are available only from Trenton. New car dealers must be franchised to sell new cars. A special license is required for used car dealers. Application packages include the application form, affidavit, signature card, security check authorization waiver form, and supplemental application form.
New Jersey Dealer License Information
Dealer License Fees:
$100.00 for automobile dealers
$350.00 for two&;year Auto Body Repair license fee
CALL: 609-292-4517
NEW MEXICO DEALER LICENSE
A dealer license is required for wholesalers, manufacturers, wreckers, distributors, new vehicle dealers, used vehicle dealers, house trailer and motorcycle dealers. An established place of business must be maintained and zoning and fencing requirements must be met. All dealers must have a display area except wholesaler. On site inspection is conducted prior to license issuance.
Dealer License Fee: $50.00 upon application and renewal
Dealer licenses are renewed December 31 each year.
Call: MOtor Vehicle Division 1-888-683-4636
NEW YORK DEALER LICENSE
Dealers must be registered to do business in the State. Application and fees are submitted to Vehicle Safety Services Division in Central Office of DMV. Facility inspections are conducted prior to registration issuance.
Dealer License Fees: original registration
$325.00 for two years (includes $25.00 application fee)
$300.00 for renewal
A Dealer Bond is required.
Registrations are for a two-year period only.
Dealers purchase MV-50 Certificates of Sale from the Department.
Nevada Licensing Requirements
NORTH CAROLINA DEALER LICENSE
New dealers must be licensed. Application requires inspection approving established place of business.
Dealer License Fees:
Dealer Certificate $50.00
Salesman License $10.00
Dealers selling trailers or semi-trailers less than 700 lbs. and not carrying more than 1500 lbs. are exempt from dealer requirements.
Dealer License for North Carolina
NORTH DAKOTA DEALER LICENSE
All dealers of new and used cars, mobile homes, motorcycles, snowmobiles, trailers and all‑terrain vehicles must maintain a dealer license. Dealer licenses expire on December 31 each year. Renewal notices are sent to licensed dealers each October. Dealers are required to have an office and repair facilities. Watercraft trailer dealers are not licensed.
Dealer License Fees:
$50.00 for new and used car dealers
$35.00 for mobile home
$25.00 for motorcycle dealers
$10.00 for ATV dealers
$20.00 for snowmobile dealers
$20.00 for trailer dealers
Dealer License for North Dakota
OHIO DEALER LICENSE
New dealer must submit license application, statement(s) of contract from the manufacturer(s), personal credit report, police report, photographs of the establishment and financial statement. All dealer locations are physically inspected. Card size salesman’s license issued.
OKLAHOMA DEALER LICENSE
New: Must be franchised, licensed with the Motor Vehicle Commission, have a shop for working on vehicles, and a used car outlet. Salesmen must be licensed.
Dealer License Fees:
$200.00 initial application
$60.00 annual renewal
Used, Wholesale, Salvage and New/Used Manufactured Home Dealers: Must be licensed with the Used Motor Vehicle and Parts Commission.
Dealer License Fees:
$200.00 initial application
$100.00 annual renewal
Used dealers and New/Used Manufactured home dealers must have a building, lot, sign and lavatory facilities. Salvage dealers must have a telephone, lot and sign. Vehicles must be out and on site (fenced). Wholesale dealers must have an office.
Watercraft Dealers: Must be licensed with the Oklahoma Tax Commission.
Fee:
$200.00 plus $10.00 per dealer franchise agreement
Renewal – $100.00 plus $10.00 per each dealer franchise agreement.
New/Used Trailer Dealers: Must be licensed with the Oklahoma Tax Commission.
Fee: $15.00 (includes one dealer license plate) for each type of dealer
OREGON DEALER LICENSE
Dealers must be licensed by the state.
Dealer License Fees:
$329.00 for three year registration
$327.00 for 3-year renewal (includes plate).
Dealer plates are issued to be used for demonstration and delivery purposes. Personal use is also permitted.
PENNSYLVANIA DEALER LICENSE
Application for license must indicate type of license for which the application is being made. License must be renewed annually. Each approved dealer is assigned an eight (8) digit dealer identification number (DIN). The first two numbers correspond to the category of vehicle the dealer is licensed to sell.
Dealer Licence in Pennsylvania
RHODE ISLAND DEALER LICENSE
All dealers must be licensed through the Motor Vehicle Dealers License Commission. Applications are investigated prior to license issuance. Licenses are renewed annually on December 31.
Conact: Motor Vehicles 401-588-3020
SOUTH CAROLINA DEALER LICENSE
State license is required for all new and used car dealers and camper/motorcycle dealers.
Dealer License Fee: $50.00
Issued for demonstration and delivery use only. New car dealers are not required to be franchised; used car dealers may sell new cars.
Dealer License in South Carolina
SOUTH DAKOTA DEALER LICENSE
An individual in the business of selling or advertising sale of vehicles is considered a dealer and must be licensed. Dealer application requirements and renewal applications are filed through the County Treasurer. Investigation of the applicant and the described place of business are conducted by the state dealer inspector.
The place of business must be:
a) a commercial structure within the state of South Dakota, with a display area for five or more vehicles
b) in accordance with building codes and zoning laws
c) location where required books and records are kept
d) the principal business at the location (cannot be the residence of the applicant).
Dealer License Fees: new/used vehicle dealer
$250.00 dealer ($100.00 renewal)
mobile home dealer $250.00 ($75.00 renewal)
motorcycle dealer $200.00 ($75.00 renewal)
snowmobile dealer $100.00 ($50.00 renewal)
trailer dealer $75.00 ($50.00 renewal)
TENNESSEE DEALER LICENSE
When an individual sells more than 5 vehicles during a calendar year, he is considered in business and must be licensed by the state as a dealer.
When applying for license, new vehicle dealers must submit a franchise agreement.
New Vehicle Dealer License Fee: $100.00 for each branch upon application/renewal.
Used vehicle dealers may not sell new vehicles.
Used Vehicle Dealer License Fee: $100.00 upon application/renewal
A facility inspection is conducted for all dealers prior to license issuance.
TEXAS DEALER LICENSE
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Used Car Dealer License Fees:
$500.00 for the first year
$200.00 renewal fee per year
UTAH DEALER LICENSE
License is required for all dealers. A dealer is an individual selling or exchanging three or more new or used motor vehicles within a 12-month period. All applicants are investigated by the Motor Vehicle Enforcement Division. Application Form TC ‑ 301 must be completed.
Dealer License Fees:
New Vehicle $125.00
Used Vehicle $125.00
VERMONT DEALER LICENSE
Dealers selling 12 or more cars in a year must be licensed. Dealers must have real estate value of not less than $10,000. License renewals are on a staggered basis. A Dealer Audit is conducted by State Inspectors for approval of license renewal.
Dealer License Fee: $275.00 for new and used automobile dealers (5 plates)
VIRGINIA DEALER LICENSE
Certification of Qualification required: each new dealer&;operator and salesperson must pass written examination ($25.00 fee). If applicant is a dealer in new vehicles with factory warranties, a copy of service agreement with manufacturer or distributor is required. The dealer sales office must be inspected by a DMV investigator prior to issuance. Each dealer is assigned a permanent dealer code with up to five digits. Licenses are staggered, fees are prorated, each plate must be insured and all licenses expire on the last day of the designated month. Preprinted renewal forms are mailed to licensed dealers for renewal purposes.
Dealer License Fee:
$100.00 upon application and renewal of dealer license
$10.00 for each salesman license
Additional fee for Recovery Fund
New dealership must pay $250.00 for three consecutive years without a bond or fund claim being filed.
Annual fee:
$100.00
$ 10.00 renewal for each salesperson.
Multi-year licensing is optional
Fee: $200.00 for dealership
$20.00 each sales person
WASHINGTON DEALER LICENSE
All dealers must be licensed.
Washington has three dealer classifications: Motor Vehicle, Mobile Home/Travel Trailer, and Miscellaneous dealers.
Dealer License Fee: $500.00 original dealer licenses
$250.00 renewal (Staggered annual renewal)
WEST VIRGINIA DEALER LICENSE
All dealers must be licensed. If an individual sells five or more vehicles in a calendar year, license is required. Dealer licenses are renewed annually on June 30. New Car Dealers must provide at time of application, proof of established place of business, display area, franchise agreement, and room for repairs. An on-site inspection of dealer facilities is conducted prior to the issuance of a dealer license. Periodic inspections of dealer facilities are also conducted.
New Car Dealer License Fee: $100.00 upon application and renewal.
Used Car Dealer requirements are the same as for new car dealers, with the exception of a franchise agreement where posted hours of operation and outside display area are required.
Used Car Dealer Fee: $100.00 upon application and renewal.
WISCONSIN DEALER LICENSE
Manufacturers, distributors, dealers and mobile home dealers are required to obtain business license (not required for trailer dealers). Individuals buying and selling more than five vehicles are required to obtain a dealer’s license. Issued for 2-year period based on date of issuance.
Dealer License Fee: $40.00 – $100.00 depending on type of vehicle sold.
Dealers are required to file $25,000 bond. Trailer plates issued to trailer dealers for the transportation of trailers exceeding 3,000 lbs.
WYOMING DEALER LICENSE
An Application for a Wyoming Dealer License must be submitted each year. All applications are investigated prior to license issuance.
Dealer License Fee:
$25.00 or $ 100.00 upon application and annual renewal
(fee depends on number of retail sales)
Watercraft dealers require only a Sales/Use Tax license, which is issued by the Wyoming Department of Revenue.
What is a curbstoner?
How to avoid curbstoners
Unlicensed Dealers Commonly Known as “Curbstoners”
And What You Should Know About Buying a Used Vehicle
What is Curbstoning?
Curbstoning is an unlicensed vehicle deal. A person who sells vehicles on the street or “at the curb” instead of at a dealership location could be “curbstoning.’ Curbstoners may also advertise vehicles in the newspaper classified section.
What are the Risks?
Buying from a curbstoner increases your risk of being unable to transfer a title. A curbstoned sale may masquerade as a “steal” but could actually be a previously wrecked vehicle, one with a “rolled back” odometer, or even a stolen vehicle. Curbstoners do not comply with state or federal laws and any dealings with them are not protected.
How to Spot a Possible Curbstoner?
Not everyone is out to break the law, but if your “great deal” is made with a vast majority of these conditions, look out! There are several “clues” you can look for:
- The license plates are out-of-state, issued temporarily, are dealer tags, or missing altogether.
- The seller admits he/she is a dealer but says it’s a personal vehicle.
- The seller insists on a cash payment.
- The vehicle’s title is not in the seller’s name.
- The seller offers to do the tag and title paperwork.
- The title is recently issued, or the seller refuses to show you the title.
- The seller gives only a pager or cell phone number.
- The same phone number is listed for multiple vehicles in the newspaper or outdoor location.
- The vehicles are for sale by the roadside, in vacant lots, at shopping centers, or in driveways.
- The seller wants to meet at a different location other than his or her residence.
What to Ask?
When you take a look at the vehicle, consider asking these questions of the seller:
Are you the dealer? Why are you selling the car?
Remember, with the exception of private sales, anyone in the business of selling or buying vehicles in the State of Maryland must be licensed. Ask to see the dealer’s license.
Are you the owner of the vehicle? Is the vehicle titled in your name?
The seller of the vehicle must be the owner or co-owner (with the other owner’s permission). Check to see if the names on the title and seller’s driver’s license match. Does the vehicle’s identification number, make, model and year match what is listed on the title?
How long have you owned the vehicle? Did you buy it new?
These questions are important for you to determine if the vehicle has been well taken care of, or if you are looking at a vehicle with a ”shady past!” You can check into the history of the vehicle by researching the Vehicle Identification Number (VIN) on-line under “vehicle history.” A history of auto auctions and/or sales across multiple states may indicate problems. Please note: A fee is charged for each vehicle history report.
What is the mileage now and what was it when you bought the vehicle?
Check the mileage indicated on the title against the odometer. It is important to note that vehicles normally average an accumulation between 12 and 15 thousand miles each year.
You might also want to check the odometer against the mileage of an oil change or other maintenance stickers that can be found on the doorframe, in the glovebox, or under the hood. An odometer with numbers that are misaligned could indicate a possible “rollback.” If the odometer numbers “jiggle” when you strike the dashboard, that is another indication that someone may have tampered with them.
Has there been any major work performed on the vehicle? Has the car had body repairs? Has the vehicle ever had a rust problem or been repainted? If the seller answers yes to any of these questions, ask for any receipts for the work performed on the vehicle.
If possible, have a qualified mechanic thoroughly check the vehicle. Look for paint color that is not evenly spread on the vehicle, check its texture, and whether or not there are any misaligned parts on the body of the vehicle. Check to see if the doors, hood, and trunk open and shut easily. You will want to check the way the tires are worn. If the tires show they have uneven wear and tear on them, this may indicate abuse, poor wheel alignment, or damaged front-end components. You should also check the horn, the radio, the heater, the wipers, and the defoggers. Try the windows and seatbelts. Test the headlights, the taillights, the flashers, the back-up lights, the brake lights, the turn signals, and the parking lights. Check under the hood, and examine for worn hoses, battery leaks, dirty dipstick oil, or dark or burnt smelling transmission fluid.
How has the car been driven? For example, did the seller take the car around town or was it taken on a majority of long trips?
Ask for service and warranty records. You will want to check for excessive brake pedal wear, which would be consistent with high mileage. To check the brakes, ask if you can test drive the vehicle. While you are driving 30 to 40 mph with no one behind you, apply the brakes 3 or 4 times. A consistent pull to the left or to the right will indicate a problem.
What are the vehicle’s best features? What would I need to do to put the vehicle in top shape?
A seller who really has owned the vehicle will be able to answer these questions easily.
Have you had the vehicle inspected!
In most states if you sell 3 or more cars within a 12 month period, you may be considered an unlicensed dealer. This is punishable by a hefty fine ($5000) or up to 1 year in jail in some cases.
Curbstoners, unlike dealers, don’t play my any set of rules. Dealers are suppose to make a reasonable guarantee the cars they sell have clear titles and are safe for the road.
George Dean
Curbstoning
Old scam called curbstoning gets new life on the Web
By Peter Lewis
Times consumer-affairs reporter
Vehicles parked along the street with a for-sale sign in the window, such as this pickup on Aurora Avenue North earlier this year, are a common sight in Seattle. This practice is taken to an illegal extreme through curbstoning, which is spreading online.
An old racket is getting new life on the Web, and the state is starting to pay attention.
The scam, known as curbstoning, involves commercial car sellers masquerading as private parties. The sellers exploit buyer fervor, naiveté or inability to buy something better, offering vehicles held together with what one investigator described as “saliva.”
Old-economy curbstoners stick “for sale” signs inside cars parked on the street, hence the “curbstoner” label. Some advertise in the classified ads. A growing number favor the Web, where it’s easier for sellers to conceal their identity and location from unsuspecting buyers and the state.
Often the transactions are uneventful, and “most of the people don’t realize they’re dealing with a curbstoner,” said Chuck Foster, the Seattle-based regional manager with the state licensing department.
Similarly, a significant number of those guilty of curbstoning may not realize there’s a law against it, he added. It is illegal to participate in five or more vehicle transactions over a 12-month period without a vehicle-dealer license.
But consumers who sidestep legitimate dealers are at greater risk of having no recourse if something goes wrong and of not getting proper paperwork, including title and registration, state officials said. Getting a handle on the extent of curbstoning is difficult. Foster estimated the practice could account for as many as one in five cars sold outside of a commercial dealership.
That translates to more than 120,000 transactions valued at about $143 million, based on 2004 private-party title transfers.
Curbstoning
What it is: Curbstoning is buying, selling or otherwise participating in five or more vehicle transactions over a 12-month period without a vehicle-dealer license. Violations can lead to cease-and-desist orders and fines of up to $1,000 per violation. Hard-core curbstoners are subject to gross-misdemeanor charges punishable by up to a year in jail and a $5,000 fine; repeat offenders can be charged with a felony. More than 20 states have curbstoning laws.
What’s the problem: Curbstoners sometimes misrepresent the background of vehicles. Buyers have little recourse if they are ripped off or fail to receive the title and registration; the state loses taxes and fees.
What’s the state’s record: Criminal prosecutions seldom occur. Statewide, licensing officials could identify fewer than 10 people against whom misdemeanor curbstoning charges have been filed over the past six years, and none who was charged with a felony. In the past two years, administrative action in 46 cases resulted in fines of $158,000. State licensing officials have been trying to crack down on the spread of curbstoning in cyberspace as a result of a case from almost two years ago.
“The issue of sales over the Internet is up and coming and getting more and more prevalent every day,” said Dan Devoe, dealer-services administrator with the licensing department. “We have just scratched the surface.”
Taking the bait
Brian and Melinda Brake of Spokane believed they’d bought a low-mileage, one-owner Bronco in immaculate condition.
“I took one look at it and knew it wasn’t as advertised, but I’d already paid for it,” Brian Brake said.
The eBay ad claimed the 1985 Bronco XLT had one owner and only 36,055 miles. “No rust, original paint in good condition, non-smoker owned, very rare in this condition.”
The Brakes were the winning bidders at $2,750 — a price Melinda Brake thought was in line with the Kelley and NADA book values she’d researched. Including tax and registration fees, the couple paid $3,064.75. What Brian Brake drove away was a Bronco with 93,000 more miles on it than advertised, that “didn’t handle right” and had bad brakes, he said.
Some may scoff at the notion of buying vehicles online, or at not checking out the vehicles beforehand.
But consumers are snapping up vehicles in cyberspace at an astounding rate. According to eBay, an SUV is sold every seven minutes.
Of concern, officials said, is the growing number of suspected online curbstoners exploiting the vulnerable.
While people may be wary of the used-car salesman, they tend to make quick judgments when dealing with individuals. And if the person makes a favorable impression during the e-mail exchanges, they tend to trust him, officials said.
How do they do it?
One way licensing officials learn about potential curbstoner activity is from the State Patrol’s vehicle-inspection program. About 400 times last year, troopers reported the same people kept showing up at inspection stations seeking new titles for cars that insurance companies had classified as totaled.
Curbstoners typically show up at auctions held at towing companies and wrecking yards to troll for vehicles. Licensing investigator Sotero Rambayon said curbstoners “buy wrecked vehicles and put them together with their saliva and sell it to the public.”
The Brakes bought a Bronco that had been donated to the Northwest Chapter of the Paralyzed Veterans of America, a nonprofit group, in September 2003. At the time, the Bronco had about 132,000 miles on it.
The nonprofit had the Bronco towed to an auction house. A month later, it sold at Whitey’s Auction in Olympia for $850 to Chris Iodice of Seattle.
An associate of Iodice’s, Tony Demuth of Sultan, placed the Bronco for sale on eBay. Demuth, who worked at a Lynnwood dealership called Extreme Auto Sales, advertised it as having 36,055 miles.
Because Demuth is related to the owner of Extreme Auto Sales in Lynnwood, the state could take administrative action against the dealer’s license.
On the Bronco sale, the state cited Extreme for failure to maintain complete and accurate records, odometer discrepancy/disclosure and advertising violations.
In connection with other eBay sales, the state issued a correction notice to Extreme for aiding and abetting curbstoning, and violation notices to Iodice and another man.
Demuth, who blamed Iodice for the deal, agreed to pay more than $13,000 to the Brakes and five other buyers who purchased cars on eBay in 2003.
While denying he was chiefly responsible, Iodice described some tactics they used to lure buyers.
He said they arranged to acquire eBay user names with positive feedback, ran them into the ground, then switched online identities and started all over again.
They came up with a sympathetic story about a relative who passed away and was an avid collector who left “100 or so vehicles” to be sold. Iodice said they deliberately used low-resolution photographs to blur dents, bad paint jobs and other problems.
Officials have issued two subpoenas to eBay to learn the identities of Washington-based curbstoners. In response, eBay last year produced a list of more than 80 residents. All received a violation notice to make them aware they were breaking the law.
In response to the second subpoena, eBay recently produced 62 eBay names with 4,002 sales reported. The state is still comparing lists to check for repeat offenders.
Statewide, the licensing department has 16 investigators to keep track of vessels, motorcycles, registered tow-truck operators, scrap processors, and other activities besides curbstoning. Recently, however, one investigator was reassigned full time to monitor what’s taking place online. Officials acknowledge it will be difficult.
When fraud is involved, eBay can suspend the account and cooperates with law enforcement, said eBay spokesman Hani Durzy. He said it’s impossible to tell if the person behind a suspended account resumes business under a different name.
And good luck tracking down the curbstoner if something goes wrong and all the new buyer has is an e-mail address to go on.
By contrast, licensed dealers must disclose what they know about a car’s history and provide paperwork in good order. Not all do, but their license could be in jeopardy if they don’t.
Other eBay buyers were harmed by Demuth and his associates, according to the state, but were not compensated, because the state only took action in response to consumers’ complaints. Several who were harmed said their frustration only intensified when they sought redress from eBay, and felt they got the brushoff.
eBay spokesmen said the buyers may have waited too long to complain or surrendered the vehicles to the sellers and became ineligible for restitution.
Licensing officials note that eBay, while the biggest, is not the only online venue for car sales.
Sites such as www.autotrader.com and www.trucktraderonline.com also appear to do substantial volumes, they said.
Of the Bronco deal, Brian Brake said, “We thought people were a little more honest than they turned out to be. We probably were a little more trusting that we should have been.”
Peter Lewis: 206-464-2217 or plewis@seattletimes.com
“How to Determine The Wholesale Value of Any Used Car or Truck” Manual
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