Depending on the type of business that you want to carry on, you can choose from the different types of dealer licenses issued in Florida:
- Motor vehicle dealer franchisee – It would allow a dealer to sell new vehicles to manufacturers, importers, or distributors.
- An independent dealer of motor vehicles – It allows buying, selling, or dealing in used vehicles.
- Dealer of wholesale motor vehicles- It allows buying, selling, or dealing in motor vehicles with other licensed dealers on a wholesale basis only. You can also take part in vehicle auctions.
- Motor vehicle auction – You can sell the motor and recreational vehicles to licensed motor vehicle dealers through bidding. For retail selling through auctions, you should have a VI prefix independent dealer license.
- Dealer of salvage motor vehicles – It allows carrying out the business of procuring and selling salvaged or wrecked motor vehicles or their parts.
- Recreational motor vehicles – You can buy, sell or do brokering of a) new recreational vehicles or b) used recreational vehicles.
You can speak to the Florida Department of Highway Safety and Motor Vehicles regarding the process of obtaining licenses. The licensing process consists of:
- Fill up the Florida DMV (Department of Motor Vehicles) Auto Dealer Application form. It can be obtained online. If there is any mistake in filling up the form, it would be returned. A separate application is required for each type of license, change of entity, change of location, change of name, branch, or dealer license. The form is called Florida Dealer License Application Form HSMV 86056. The application fee is $ 300.
- Get the Dealer Surety Bond, also known and the Irrevocable letter of credit.
The surety bond of amount $ 25,000 must be issued by an insurance or bonding company or insurance agent authorized to do business in Florida. Alternately, the irrevocable letter of credit can be obtained from a bank. These documents are required to protect vehicle buyers from fraudulent dealers.
- Insurance – Insurance is mandatory for getting a license. It is illegal in Florida to drive on the roads without insurance, and the offender would face penalties.
The insurance would cover the dealer, employees, and clients during test drives, driving on the road, or during injuries.
- Dealer liability or garage liability insurance
If your client bumps the demo car into another car, it will cover the other car only.
- Dealers open lot insurance
It is coverage for the inventory in cases of damage by wind, natural disaster, hail, theft.
In case of a non-franchised dealer selling used vehicles, the coverage should be $ 25,000 combined single limit coverage, property damage cover of $ 25,000, $ 10,000 for personal injury.
For a franchised dealer selling new vehicles, only $ 25,000 combined single limit coverage and $ 10,000 for personal injury are required.
- Florida Employee Identification Number (FEIN), also known as TA ID number or EIN – This is required to obtain a Florida Used Motor Vehicle License.
- Fingerprint check – A background check and a fingerprint check are conducted for all partners and applicants of a dealership.
- Get approval for the business location – You must have a permanent and enclosed building on an ownership or lease basis with space for displaying vehicles, an office with appropriate furniture. All records of sales should be kept at the office for a surprise inspection. The location that you prefer should meet all local zoning requirements.
- You have to get your business registered with the Florida Secretary of State. It requires filing articles of incorporation or name registration. You may take legal help for this.
- Photographs and logo – A logo or business sign must be permanently installed near your business location. There should be photographs of the building, display area, office, mention of address, and office hours.
- Register and complete the dealer training course in Florida. It can be done online and is mandatory for getting a license.
There are several providers of this course but while choosing a particular provider, check that their course is approved by the state. There are 16 hours pre-license courses offered by providers, and they can be completed online. On completion, a certificate is issued, which can be printed and kept as proof. This certificate has to be shared with DMV for getting a license.
Motor vehicle dealers will have to complete a dealer training course in Florida if they want to get a license for the following businesses:
- Motor vehicle dealer franchisee
- An independent dealer of motor vehicles
- Dealer of wholesale motor vehicles
- Motor vehicle auction
- Dealer of salvage motor vehicles
The course material would include lessons in dealer licensing and operations, compliance requirements, skills required to be a successful auto dealer, business management, accounting, reviewing trends and laws and regulations in Florida.
After receipt of the Florida Auto Dealer’s License, you have to keep it updated by taking the continuing education course. The courses should be approved by the Florida Department of Highway Safety and Motor Vehicles.