How To Get A Car Auction License

Car dealer auctions are some of the most important secrets of the auto dealer industry. At these auctions, dealers take their pick from a huge range of vehicles, often at a substantially below-market price. Auctions are a significant source of stock for many smaller used vehicle dealers, but they can also potentially provide a source of quality vehicles for private individuals who are able to access them.

Thus, both dealerships and private buyers may be interested in learning how to get car dealership auction access. Here, we'll look at how dealership auctions work, how dealers can get dealership auction access, and the techniques that private buyers sometimes use to get access to dealership auctions as well.

What Is a Car Dealership Auction?

For the most part, an auto auction works like any other kind of auction. An auction company puts hundreds of vehicles from various sources up for sale to the highest bidder. Dealers and other buyers examine the vehicles they're interested in, and then wait for the auction personnel to drive the car into the auction lane so they can place a bid. Dealership auctions pull their stock of vehicles from a wide variety of sources, including:

Trade-ins from dealerships
Vehicles repossessed by lenders
Vehicles returned at the end of a lease
Fleet vehicles from rental agencies
Salvage title vehicles
Vehicles impounded by law enforcement
Government surplus stock

Auctions are a significant source of stock for many smaller used vehicle dealers, but they can also potentially provide a source of quality vehicles for private individuals who are able to access them.

Auto dealers can typically access an auto auction through a standard application process, but the majority of auto auctions are closed to the public. Next, we'll examine the options available to private individuals seeking access to dealership auto auctions.

Can a Private Individual Get Car Dealership Auction Access?

With quality vehicles available at wholesale prices, it's easy to see why the idea of buying from a dealer auction is tempting for many vehicle buyers. However, in most cases, it's relatively difficult for a private individual without a dealer's license to access dealer auctions.

For individuals who want to regularly visit dealer auctions and purchase multiple vehicles, the best option may be to obtain a vehicle dealer's license from the state government. Getting an auto dealer's license can be a long, expensive, and somewhat complex process, but it may be a viable option for private buyers who want continued access to auto auctions. We'll talk more about what it takes to obtain an auto dealer's license in the next section.

On the other hand, private buyers who only want to buy one or two vehicles are usually best served by working through an auto auction broker. Auto auction brokers have dealer credentials that allow them to access dealer auctions, and they often work with private buyers who want access to this deeper pool of reasonably priced vehicles. For buyers who are determined to get dealer auction access, working with an auction broker is usually the best choice other than getting an auto dealer's license yourself.

How Can My Dealership Get Access to a Dealership Auction?

Auto dealers will find it much easier to gain access to dealership auctions, so long as they can supply all of the correct dealership credentials, including a surety bond, that their state government requires. If you're getting your auto dealer's license for the purpose of getting access to dealership auctions, note that you'll need to fulfill these requirements just as any other auto dealer would.

Your business will need to carefully follow the rules of how to get a motor vehicle dealer license. Getting your motor vehicle dealer license means going through the auto dealer license application process mandated by your state government. This will typically involve the following steps:

Submitting application paperwork, including a business plan and financial documentation, to your state's DMV or other licensing agency
Choosing and leasing a dealership lot (although it's possible to get a car dealer's license without a lot as well)
Meeting any special requirements imposed by your state government, such as a pre-licensing class or background check
Obtaining the correct type of motor vehicle dealer surety bond

Once your dealership is licensed, you'll typically need to contact auction companies directly to register for auction access. Most of today's large dealer auctions have websites for applying, but some smaller local auctions may require a phone call or paper application.

Auto Auction Tips

Get to the auction site early and start examining the vehicles you're interested in. Many auctions will list their inventory online before the auction, which offers a great opportunity to do research.
If you're new to auctions, spend some time listening to the auctioneer and learning to understand their "chant" before placing a bid.
If possible, test-drive a vehicle before you place a bid on it. Not every auction allows test drives, so be aware of common signs of a lemon, and don't assume that a good-looking vehicle also runs well.
The most desirable stock at an auction typically comes from banks selling repossessed vehicles. The least desirable stock is typically from other dealers unloading low-quality trade-ins.
During your research, establish a maximum bid you'll pay for a certain vehicle and don't go above it.
Remember that the buyer who places the winning bid also often has to pay auction fees, taxes, and other additional costs. Be aware of these costs and figure them into your calculations when setting a maximum bid.

Does your auto dealership business need a motor vehicle dealer surety bond to get car dealership auction access? Are you a private buyer seeking to apply for a dealership license? Surety Bonds Direct will be glad to help. Our surety bond professionals offer free auto bond quotes in just minutes—just use our surety bond quote request form or call 1-800-608-9950 for more assistance.