What’s the Difference Between a Salesman License and a Car Dealership License?

As you start your career, you may wonder whether all licenses are created equal. The truth is, professional licenses vary greatly from type to type. The license you invest in will dictate what kind of work you can perform moving forward. Naturally, this is a decision that you should treat with great care.

If you are trying to decide between a salesman license and a car dealership license in North Carolina and other states, keep reading. You’ll find everything you need to make an informed decision about your future.

Buying and Selling Used Vehicles with a Car Dealers License in NC

If you hope to buy new vehicles directly from the manufacturer, you need a car dealership license. Similarly, you need a car dealership license to buy used vehicles from an auto auction. 

With a salesman license, you can sell both new and used vehicles. However, because you can’t buy directly from a manufacturer or auto auction, your inventory is limited to those vehicles already owned by the dealership. If you hope to both buy and sell vehicles, you need both types of licenses. 

Licensing Requirements

In many ways, obtaining your car dealership license is similar to starting a business. If you want to become a licensed dealer, you will probably need to provide your federal tax ID number and evidence regarding where you plan to do business. 

You’ll also need to provide proof that you have insurance that covers all the vehicles at your dealership. The specific requirements vary from state to state, but this is generally the standard for car dealership licenses.

Getting your salesman license is much simpler. You won’t need to provide any business-related documents. This means that obtaining your salesman license is also cheaper. 

Renewal Requirements

Again, the renewal requirements for your car dealership license will vary from state to state. The process for renewing a salesman license is generally easier and cheaper than car dealership licenses, no matter the state where your license was issued.

Surety Bond Requirements

On top of the other licensing requirements, there is also the surety bond requirement to consider when choosing between a salesman license and a car dealership license. Typically, you don’t need a surety bond for a salesman license. But for a car dealership license, you almost always do.

This depends on the state in which you do business. It also depends on the size of your business. In North Carolina, the requirement for a car dealers license in NC is this:

  • A base $50,000 motor vehicle dealer bond
  • $25,000 surety bond for every additional branch

You are also required to keep comprehensive liability insurance on all vehicles with dealer licenses in this state.

How to Choose Between a Salesman and Car Dealers License in NC

Ultimately, the decision is up to you. If you only want to sell cars from a dealership, then a salesman license will be more than enough to get you started. But if you’re aiming to create your own business, you might want to invest in both types. No matter what you decide, and no matter what questions you may have, The License Company is here to assist you through the process!