3 Reasons a Car Dealership License Might Be Denied

If you plan to open a car dealership, you’ll need to obtain a license from your state to do so. An NC car dealership license indicates that you have met the requirements set by the state’s Department of Transportation or other governing body.

Many people have no trouble obtaining this license, but there are also circumstances in which an application for a car dealership license might be denied. Here are three of the most common reasons.

1. Failure to Meet the Physical Requirements of an NC Car Dealership License

If you want to obtain a car dealership license, you must have a physical place of business that meets certain requirements. 

For example, to obtain a Pennsylvania car dealer’s license your car dealership must have:

  • An area large enough to display at least five vehicles
  • A permanent office building
  • A file cabinet with a lock 
  • A sales desk
  • An office phone
  • A permanent sign with the business name and hours of operation

Additionally, the applicant must provide an occupancy permit and proof of appropriate zoning. Other states have their own sets of physical requirements that must be met. 

If you don’t meet these requirements, you may be able to obtain your dealer’s license without a storage lot. However, you will have to take some additional steps.

2. Failure to Meet Other Licensing Requirements

It’s important to be aware of any other licensing requirements to ensure that your application won’t be denied. In addition to filling out the paperwork and paying the fees, most states mandate that you take additional steps.

First, you will probably have to obtain a surety bond. Many states also require proof of the appropriate insurance, a diagram of your car lot, a copy of your lease agreement, photos of your location, and a franchise agreement. (The latter is a requirement for selling new vehicles.) 

Finally, you must verify that you need a dealership license or a salesman license.

3. Inability to Complete Mandatory Licensing Coursework 

When you obtain a dealership license, you are agreeing to comply with any laws and regulations that apply to you or your business. In order to do this, you must prove that you are familiar with the rules and capable of running your business properly. 

Many states require that you complete a training course before they will consider your application. You may also be required to take a refresher course each time you apply for renewal.

By following these tips and ensuring you have all the appropriate paperwork needed, your NC car dealership with gain a license in no time!