How to Get a Car Auction License?


A car auction can be a really great way to buy a car for a hugely reduced cost or a great way to get your hands on a rare or unique car that you might not be able to find anywhere else. However, not all car auctions are free to attend; in some cases, you may not be able to attend a certain auction if you don’t hold a car auction license.

Car auction licenses are only available to licensed dealers, and the process to get such licenses involves submitting a DMV application, paying application fees, submitting the required state documentation, and purchasing a surety bond. Non-dealers must participate in public car auctions and don’t need licenses.

In this article, we’ll be going over why you might need a car auction license and how to go about getting one of your own. We’ll also address some of the questions you might have about car auctions in general, such as whether or not it’s a good idea to buy a car at an auction in the first place and how much you can typically expect to pay for a car at an auction.

Can Anyone Buy from a Car Auction?

This depends on what kind of auction you want to attend. In general, there are two types of car auctions that exist: public auctions and dealer auctions.

Public car auctions are open to the general public; anyone with enough money can attend a public auction and bid on whatever cars they want. Types of public auctions include police and government auctions and online auctions you could find on eBay Motors.

Prestigious car auctions hosted by companies like Barrett-Jackson and RM Sotheby’s are also public auctions.

On the other hand, dealer auctions are only open to licensed car dealers and require a car auction license to attend. Dealer auctions include salvage and insurance auctions, as well as wholesale auto auctions.

How Much Is an Auction License?

If you’re trying to acquire a car auction license of your own, you should be aware that you’ll actually have to pay an application fee as a part of the application process. The cost of this fee really varies depending on the state you live in, but it can be anywhere from fifty dollars up to several hundred dollars.

In addition, there are other costs associated with acquiring a dealer license that you should take into account. You’ll need to buy a surety bond, a type of insurance policy that protects your customers if your dealership can’t meet its financial requirements.

A surety bond typically costs anywhere from $25,000 to $50,000, although you’ll only need to pay a fraction of this in the form of a down payment to qualify for a car auction license.

Several states also require you to pay additional fees before you can get a car auction license, which can include licensing fees and dealer plate fees, among others.

How to Get a Car Auction License

Car auction licenses are only available to you if you’re a licensed dealer, to begin with, so unfortunately for you, if you’re just an average car buyer, there’s no way to get a car auction license of your own. However, if you are, in fact, a licensed dealer looking to get a car auction license, there are a lot of steps you’ll have to take.

The process of acquiring a car auction license varies from state to state, but at the very least, you’ll usually have to submit an application to your state’s DMV as well as an application fee.

Many states also require you to submit other types of documentation along with your application, which can include a business license, proof of insurance for your inventory and business, and proof of purchase or lease for the location of your business, to name just a few.

And of course, you’ll also need to purchase a surety bond and pay any other additional fees that your state requires before you can claim a car auction license of your own.

How Much Do Cars Usually Go for at Auctions?

Unless you’re talking about the aforementioned Barrett-Jackson auction or a similar high-end auction, buying a car at a public or dealer option is almost always cheaper than it would be anywhere else.

A study conducted by Dealer 101 showed that, on average, buyers paid about 20% less for cars sold at dealer auctions than they would have otherwise paid if they had bought the same car from a dealership.

Of course, to ensure that you’re actually getting a good deal at an auction, you should perform your own research beforehand and find out the actual worth of the cars you want to buy. Resources like the Kelley Blue Book can give you a pretty good idea of what any used car is worth on the market.

Is It Worth Buying a Car at an Auction?

If you’re a smart buyer, purchasing a car at an auction can absolutely be a good idea. As long as you have a really good eye for any telltale signs of a poor-quality vehicle and if you have a solid understanding of how the auction price of a given vehicle compares to its regular retail price, you should have no problem finding some sweet deals.

That being said, it can’t be overstated how important it is to avoid buying any car that might have severe issues. This may actually be obvious to most, but if you end up buying a car at an auction that costs more to fix than you initially paid for it, it’s not exactly a good investment.

Final Thoughts

If you are a licensed dealer, taking the time to apply for a car auction license can definitely be worth it. Dealer auctions are often an excellent place to find great deals on used cars, which can help you turn bigger profits as a dealer.

Whether you’re a dealer or simply a regular car buyer, it’s always a good idea to go into car auctions with caution. Be sure to examine any car you’re interested in as thoroughly as you can, and never take any unnecessary risks.

Gui Hadlich

Hey there! I'm Gui. To be honest, I'm not really that interested in cars. But what I'm really, really not interest in is spending lots of money fixing my car up. Thankfully, I have a father-in-law who's obsessed with cars and a brother getting a PhD in internal combustion engines, so I get to learn about fixing cars. And with Fixing Engines, I hope to help you save a lot of money and take good care of your cars.

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