Car sales can be a lucrative business. Now more than ever, there is a strong demand for quality new and used cars across Alabama. People count on reputable dealers to help them find the cars they need.
There’s a lot of potential to make a profit but just one catch. You need an Alabama car dealer’s license before you launch your car dealership.
Who Needs an Alabama Car Dealer’s License?
Car dealers of all types need to be licensed according to Alabama law. This includes anyone selling new and used cars. Additionally, rebuilders, reconditioners, and wholesalers must also obtain an appropriate license before opening up shop.
Know the Type of License You Need
Until recently, the state of Alabama had designated different dealer licenses to retailers, wholesalers, rebuilders, and reconditioners. Now, these are consolidated into a single license type – the master license.
This license allows the holder to conduct any work that is normally done by car dealers. However, there is still a process you must navigate to become licensed.
Steps for Getting an Alabama Car Dealer’s License
The state of Alabama will only issue a license to you after you have taken the following steps:
- Establish a permanent location and obtain signage
- Get a sales tax number
- Obtain and show proof of liability insurance
- Purchase a dealer’s bond
- Get a regulatory license from the Alabama Department of Revenue
- Submit your application for a privilege license
Once you have taken these steps and received approval, you will be a fully licensed dealer with all of the associated privileges.
The Cost of Obtaining a Dealer’s License in Alabama
There are several costs associated with obtaining your car dealer’s license. Some prices will vary depending on your county. However, you should be prepared to pay for:
- Master dealer license
- Privilege license
- Alabama car dealer’s bond
- Additional dealership locations
- Car and motorcycle dealer plates
- Car and motorcycle manufacturer’s plates
The type of dealership you have and your business goals will influence what you will pay to become properly licensed.
Obtaining your dealer’s license may seem complex, but it is worthwhile. As a licensed car dealer, you will be the owner of a business that is yours to grow. Additionally, your license does more than ensure you are compliant with the law. It allows you to establish an excellent reputation within your community.