Welcome
"One of the great challenges in this world is knowing enough about a subject to think you're right, but not enough about the subject to know you're wrong." ― Neil deGrasse Tyson
Selling vehicles for a profit can be a fun, fulfilling, and financially rewarding career, but there's a lot more to it than meets the eye. Most people who want a dealer license tend to focus more on selling vehicles and less on running an actual business. Contrary to popular belief, you cannot "flip cars" for a profit in the informal sense. Once a person becomes a licensed dealer, several laws come into play and must be adhered to. If you want to run a successful dealership, you should invest the time necessary to learn about the business before you get a dealer license. If you adopt a "learn as you go" approach, the likelihood of failure is quite high. You should work for a dealership before starting your own.
Flipping Cars
In a country with no laws, "flipping cars" would be very simple. A person could purchase vehicles below market rate, recondition them, and resell them to consumers for a profit. The buyer and seller would do a little paperwork, money would exchange hands, and the buyer would drive off with the vehicle. But the reality is we live in a country with many laws. The vehicle dealer industry is one of the most highly regulated industries in the United States. With few exceptions, California does not allow anyone to sell vehicles for a profit without a dealer license. That said, hundreds, if not thousands, of vehicles are unlawfully sold by unlicensed dealers every year.
Unlicensed dealers intentionally "flip cars" without a dealer license because following the law is expensive and time-consuming. Licensed dealers that sell vehicles on a retail basis have to pay rent for a dealership in a commercial location. This costs several thousand dollars a year. After adding the cost of purchasing a surety bond, insurance, and inventory, expenses start to rack up. A licensed dealer must sell enough vehicles to cover these expenses and make a profit. Moreover, licensed dealers must commit to educating themselves on the vehicle dealer industry. If you've never worked for a dealership, this could easily take a few years. Suffice it to say, unlicensed dealers do not want to pay for or commit to these requirements. They would rather sell vehicles on a part-time basis with little to no overhead.
Dealer License
The Department of Motor Vehicles publishes a dealer license application checklist that specifies what education program, fees, documents, permits, and licenses are required to apply for a dealer license. The Department of Motor Vehicles will make a thorough investigation of the information contained in the application and decide whether to issue a license to an applicant within 120 days of a submitted application. Applicants should review the personal history questionnaire before applying for a dealer license. An application may be denied based on an answer to a question contained in the questionnaire. If you have concerns about qualifying for a dealer license, you should contact the Department of Motor Vehicles.