Getting a Car Auction License in Florida
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Getting a Car Auction License in Florida

By Autolist Editorial | June 12, 2019

Florida has the highest number of car dealer auctions of any state in the U.S., and getting an auto auction license in Florida isn't any harder than getting a standard license to sell used cars. Unlike typical auto deals, in which customers negotiate with the seller over the price of a car, car auctions require buyers to bid against each other for the vehicles they want. As a result, auctions in Florida have special requirements that sellers must meet. Here's how to get a car auction license in this state.

What's a Florida Car Auction License?

A car auction license is just a type of car dealer license that lets an auto dealer buy and sell cars through auctions. Car auctions typically feature used vehicles, and finance companies and fleet operators like to offload used and government cars through these auctions, such as decommissioned police cars. Although bidders at auctions can't usually get warranties for the vehicles they win, they can often get much better bargains than an independent dealer is likely to offer.

In Florida, anyone who buys or sells more than three vehicles in a 12-month period must get a motor vehicle dealer license from the State of Florida Department of Highway Safety and Motor Vehicles. As of 2019, Florida has six types of dealer licensing, each with different auto dealer license requirements and dealer license application forms. License Type VI allows independent dealers to sell used motor vehicles, while Type SD grants salvage dealers the right to sell wrecked or salvage vehicles. License Type VF lets franchise dealers specialize in buying and selling new cars from a specific manufacturer or distributor, and Type VW permits dealers to buy and sell wholesale with other dealers or through auctions. License Type SF is for people who want to service vehicles but not sell them. Finally, License Type VA is for dealers who wish to buy and sell cars at an auction but not through retail.

How to Get a Car Auction License in Florida: Pre-Licensing Requirements

Before you can get your car auction dealers license, you need to pass a Florida dealer license class from an official dealer training school. The 16-hour Florida Car Dealer Pre-License Class through, for example, satisfies the licensing requirements for every dealer license type in Florida except Type SF. It covers subjects such as franchise agreements and the types of auto manufacturers out there. Once students pass the 50-question final exam and fill out a DMV questionnaire, they can print out a certificate for proof of completion. Although several schools offer pre-licensing classes, they all have very similar requirements.

To get any car auction license in Florida, you must pay a one-time surety bond. Every dealer in Florida must be bonded for $25,000, but you only have to pay between 1 and 15 percent of that figure, depending on your credit score and other factors. A surety bond protects the public in case you cause harm while violating any statutes related to car dealing. Prospective dealers can apply to special bond programs if they have poor credit. Another requirement for getting a car auction license in Florida is to find a location for your services and get it approved through a regional office. Make sure your office is approved by the Division of Motorists Services Compliance Examiner before you sign a lease. Also, you need to register your business with the Division of Corporations at the Secretary of State. You must also get a Federal Employee Identification Number from the Internal Revenue Service and a sales tax number from the Florida Department of Revenue. As with any other vehicle sale, auctions have a sales tax under Florida law. For extra security, the Florida Department of Law Enforcement requires anyone planning to get a dealer license to submit fingerprints, which cost $54.25 per person.

What Documents Are Needed to Get a Car Auction License in Florida?

Getting all the documents for licensure can be confusing, so it pays to collect all the forms at once before applying. The main document you need for an auction license is the Florida Dealer License Application Form (86056). Fill out this form, and include your fingerprints, your certificate of completion for your dealership training course, and proof that you're owning or leasing an office. You must also include your business registration form and your surety bond. Since motor vehicles are dangerous to transport, Florida requires dealers to get garage liability insurance with single-limit liability coverage of $25,000 and personal injury protection coverage of $10,000. Make sure you include proof of this insurance with your Florida Dealer License Application Form.

Finally, you may need to include forms related to your business structure, such as Articles of Incorporation if you're a corporation, a Partnership Agreement if you're partnering with someone else, and an Operating Agreement with Articles of Organization if you're a Limited Liability Company. Proof of how you plan to elect corporate directors, such as corporate papers or meeting notes, may also be required. Once you've filled out your application to get a car auction license and included the necessary forms, you can submit it to the Florida Department of Highway Safety and Motor Vehicles along with a submission fee. As of 2019, that fee is $300 for each main business location you have.

Other Considerations

Once your application has been approved, you should get your license in the mail within a month. If you don't receive the license or run into problems while filling out your application, contact the regional office. As with every car dealer license in Florida, the auction license expires each year on April 30. To renew it, you must pay $75 and provide proof of at least eight hours of continuing dealer training.

Getting a car auction license in Florida is the only way to join one of the state's most lucrative motor vehicle markets. Once you've found a place of operations, filled out the Florida Dealer License Application and paid the necessary fees, you can start auctioning cars for profit.

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