Making the Decision to Get Your Auto Dealers License

Posted on August 5, 2011 by Aaron No Comments

Many entrepreneurs interested in buying and selling cars are discouraged by the dealer licensing process. Even though they may be interested in the area of car sales as a primary source of income or potential business venture, the perceived difficulty in becoming a licensed dealer prevents them from pursuing their goal. However, the benefits of becoming a licensed auto dealer outweigh any difficulty associated with becoming licensed.

The primary benefit of being a licensed dealer is the ability to partake in private dealer auctions. These auctions provide dealers with the opportunity to purchase cars at or below wholesale prices. These exclusive auctions offer the convenience of hundreds of potential vehicles in a centralized location. Additionally, many large car dealerships offer closed bid auctions only available to licensed dealers.

Virtually every state in the nation has a limit on the number of vehicles that a private individual can buy and sell in a calendar year, even going so far as to make exceeding this limit a misdemeanor. Though the total amount differs from state to state, any limit on the total sales and purchases is bound to be a serious impediment on the overall effectiveness of any business venture. A dealer’s license removes this limit, enabling the volume necessary for long-term profit and business viability.

A dealer’s license also offers numerous direct economic benefits. Virtually any purchase associated with the auto industry can be made on a tax-free basis, or at the very least, be included in a list of itemized deductions. Activities, such as travel and lodging expenses, are also deductible as a licensed dealer. Special tax privileges are one of the most important aspects of business success. Without them, it is almost impossible to compete in any financial arena. Making the Decision to Get Your Auto Dealers License

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