Thinking about starting your own used car dealership in Utah? Whether you’re planning to operate a small business or run a larger dealership, obtaining a used car dealer’s license is the first step toward legally selling vehicles.
Without the proper license, you risk facing hefty fines and even the shutdown of your business. This guide will walk you through the entire process of obtaining a used car dealer’s license in Utah, the types of licenses available, and the best strategies for sourcing vehicles, including through Twin Cities Auctions.
Key Takeaways
- Utah requires a used car dealer’s license to legally sell vehicles. You can sell up to 5 vehicles per year without a license.
- The process involves verifying eligibility, registering your business, submitting documents, paying fees, and passing an inspection.
- Auctions like Twin Cities Auctions provide an excellent resource for dealerships looking to purchase inventory at competitive prices.
Step-by-Step Process: How to Get a Used Car Dealer’s License in Utah
Step 1: Ensure Eligibility
Before starting the application process, you need to ensure you meet the basic eligibility requirements to obtain a used car dealer’s license in Utah:
- Age Requirement: You must be at least 18 years old to apply for the license.
- Criminal Background Check: Utah requires all applicants to pass a criminal background check. Felony convictions, especially related to auto sales, fraud, or theft, can disqualify you from obtaining a license.
- Physical Location: You must have a permanent physical business location where you can conduct your vehicle sales operations. This location must comply with local zoning laws and meet certain standards for business operations.
- Insurance: Proof of liability insurance for your dealership is required. This insurance protects your business and customers in case of accidents or damages.
Step 2: Choose the Right Type of License
In Utah, there are different types of dealer licenses based on the type of business you plan to operate. Selecting the correct type of license is essential for ensuring you comply with state laws.
- Class A License: For selling new and used cars.
- Class B License: For selling only used cars.
- Wholesale License: For buying and selling cars to other licensed dealers, without direct sales to the public.
Most used car dealerships will need to apply for a Class B License, which permits the sale of used vehicles.
Step 3: Register Your Business
To operate as a licensed used car dealer in Utah, you must legally establish your business. Here’s what you need to do:
- Register with the Utah Division of Corporations and Commercial Code: This ensures your business is recognized by the state.
- Obtain an EIN: Apply for a Federal Employer Identification Number (EIN) through the IRS. This number is required for tax purposes.
- Apply for a Sales Tax Permit: Apply with the Utah State Tax Commission so you can collect sales tax from customers on the vehicles you sell.
Step 4: Submit Your Application to the Utah DMV
Once your business is set up, you can submit your application for a used car dealer’s license to the Utah Division of Motor Vehicles (DMV). The application will require:
- Personal information: Including your name, address, and criminal background check consent.
- Business information: Details about your business location and structure.
- Proof of business registration and sales tax permit.
- Surety bond: A $75,000 surety bond is required for all licensed used car dealers in Utah to guarantee compliance with state regulations.
You can find the application form and more details on the official Utah DMV website: Utah DMV Dealer License.
Step 5: Pay the Application Fee
Along with your application, you’ll need to pay an application fee, which varies based on the type of license you’re applying for:
- Class B License Fee: Typically ranges between $100 and $400 depending on your business setup.
The fee is non-refundable, so be sure to complete your application carefully.
Step 6: Complete the Dealer Education Course
Although Utah does not require a formal dealer education course for all applicants, it’s strongly recommended to complete an 8-hour dealer orientation course. This course covers important topics, including:
- State and federal vehicle sales laws
- Consumer protection regulations
- Dealer responsibilities
This course is beneficial as it provides valuable insights into running a dealership and helps you understand your legal obligations. You can find authorized dealer education programs online.
Step 7: Schedule and Pass the Inspection
After submitting your application and completing the necessary training (if applicable), the Utah DMV will schedule an inspection of your dealership location. The inspection ensures your business complies with state regulations, including:
- Zoning compliance: Your dealership must be in an area where vehicle sales are allowed.
- Facility requirements: Your dealership must meet certain standards, such as having a business office and a proper display area for vehicles.
Ensure your business location is fully prepared for the inspection to avoid delays.
Step 8: Wait for License Approval
Once you’ve passed the inspection, the Utah DMV will process your application. If everything is in order, your license will typically be approved within 2 to 4 weeks. You’ll then be able to legally buy and sell used cars in Utah.
Dealer Licensing Requirements in Utah
Here’s a concise summary of the requirements for obtaining a used car dealer’s license in Utah:
| Requirement | Details |
| Age | Must be 18 years or older |
| Business Location | Must have a permanent location that complies with zoning laws |
| Insurance | Proof of liability insurance is required |
| Background Check | Must pass a criminal background check |
| Dealer Education | Not required but recommended |
| Application Fee | Ranges from $100 to $400 |
| Sales Tax Permit | Required to collect sales tax |
| Sales Limit | Can sell up to 5 vehicles per year without a license in Utah |
Why Auctions Are a Smart Choice for Vehicle Sales
When you’re building your inventory, using auctions can be a smart choice for sourcing vehicles. Twin Cities Auctions, based in Minnesota, is one such reputable auction house that offers a wide range of vehicles at competitive prices.
Key Benefits of Buying from Auctions:
- Wide Selection: Auctions like Twin Cities Auctions offer a variety of vehicles, from low-budget cars to high-end models.
- Competitive Pricing: Auctions often offer vehicles at prices below retail value, enabling dealers to maximize their profit margins.
- Transparency: Auctions provide full vehicle history reports, so you know exactly what you’re buying.
- Convenient Bidding: Many auctions offer online bidding for your convenience, making it easier to source vehicles without being physically present.
Twin Cities Auctions: A Smart Vehicle Sourcing Choice
For those in the automotive industry, Twin Cities Auctions offers an excellent platform for sourcing quality vehicles at competitive prices.
Whether you are just starting or expanding your business, this auction house provides transparency, competitive pricing, and a broad selection.
| Feature | Description |
| Inventory Variety | Wide range of cars, trucks, and SUVs available |
| Competitive Pricing | Below-market pricing allows for higher profit margins |
| Vehicle History Reports | Detailed history reports for every vehicle |
| Online Bidding | Convenient online bidding options for dealers |
| Financing Options | Financing available to help with inventory purchases |
Practical Tips for Sellers and Dealers
Once you have your used car dealer’s license in Utah, here are some practical tips to help you succeed:
- Stay Informed About Regulations: Regularly check for updates on Utah’s vehicle sales laws, taxes, and dealer obligations.
- Keep Accurate Records: Maintain detailed records of all transactions, including vehicle history, sales agreements, and customer information.
- Offer Transparency: Always be transparent with customers about the condition of the vehicles you sell. Providing a detailed vehicle history report will help build trust.
Conclusion
Getting a used car dealer’s license in Utah is an essential step to legally operate your dealership.
By following the necessary steps, from ensuring eligibility to passing the inspection, you’ll be ready to start selling vehicles in no time.
Additionally, consider sourcing your inventory from Twin Cities Auctions for a wide selection of vehicles at great prices.
Your Next Car is Just a Click Away at Twin Cities Auctions!
Twin Cities Auctions brings the excitement of car auctions directly to your screen. No dealer license? No problem! Our online platform is open to the public, offering a wide range of vehicles to suit all tastes and budgets.
Whether you are an automotive enthusiast or a first-time buyer, you’ll find an impressive variety of vehicles that cater to all tastes and budgets. From reliable family sedans and eco-friendly hybrids to high-performance cars and premium SUVs, our listings are curated to ensure quality and diversity.
Enjoy a hassle-free bidding process and secure your perfect match from our extensive lineup. Don’t miss out—your next car is just a click away at Twin Cities Auctions!
Looking for more options? Explore our comprehensive list of all available car auctions across the United States. Your next deal might be just a click away!
FAQ
How many cars can I sell without a license in Utah?
In Utah, you can sell up to 5 vehicles per year without a license. If you want to sell more than that, you need a used car dealer’s license.
What documents are required to apply for a used car dealer’s license in Utah?
You will need to provide proof of business registration, proof of insurance, a criminal background check form, and the necessary application fee.
How long does it take to get a used car dealer’s license in Utah?
The approval process typically takes about 2 to 4 weeks after your application and inspection have been processed.
Do I need to complete a dealer education course in Utah?
No, Utah does not require a formal dealer education course to obtain a used car dealer’s license.
How much does a used car dealer’s license cost in Utah?
The application fee for a used car dealer’s license in Utah generally ranges from $100 to $400, depending on the type of dealership.
Can I sell cars online if I have a used car dealer’s license in Utah?
Yes, having a used car dealer’s license in Utah allows you to sell cars online as long as you comply with all state regulations regarding vehicle sales and taxes.
How do I schedule the dealership inspection in Utah?
After submitting your application, the Utah DMV will contact you to schedule an inspection of your dealership location.
Where can I buy cars for my dealership in Utah?
Twin Cities Auctions is a great place to source vehicles for your dealership. They offer a wide range of vehicles at competitive auction prices.