Do I need a dealer license to sell cars? Good question. The answer depends.
When You Can Sell a Car Without a Dealer License
If you want to sell a car without a dealer license, the vehicle must:
- be titled in your name (or business name)
- be used for personal, household, family, or business purposes
For example, if you want to get a new car and you wish to sell your old car, you can do so as long as your old car is titled in your name. All states allow you to sell your own personal vehicle without a dealer license.
But, if you do not put a title into your name before selling it, you are committing the illegal act of title-jumping. Read about the dangers here.
When You Need a Dealer License
You need a dealer license if your vehicle does not meet the above requirements, and you regularly wish to engage in the process of buying and flipping cars for a profit. Learn how to get a dealer license or read our full length dealer license guide.
Common Questions About Selling Cars Without a Dealer License
Can I sell a car for a family member without getting a dealer license?
Yes, as long as you have the paperwork and permission to do so. Some states might require you to get a Limited Power of Attorney before selling the vehicle. A Power of Attorney (POA) gives you the authority to sign your family member’s name for the purpose of selling the vehicle. Get Limited POA forms.
If I title the vehicle in my name, can I sell the vehicle without a dealer license?
Titling a vehicle in your name to avoid getting a dealer license does not exempt you. Just because you are no longer title-jumping does not mean you do not need to get a dealer license.
Oregon Department of Motor Vehicles puts it nicely when they say "Titling a vehicle in your name to avoid dealer certification (licensing) requirements does not exempt you. You must be able to prove that you used the vehicle personally, for your household, family, or for your business to be exempt from dealer certification requirements." (Source)
My state said I can sell X number of cars per year without getting a dealer license. Is this true?
Some states allow you to sell 2-6 vehicles per year without getting a dealer license. When this is stated, it is referring to vehicles that are titled in your name, owned by you, and used primarily for personal, household, family, or business use. To buy and sell cars for a profit on a regular basis without a dealer license is illegal in every state.
What happens if I sell cars without a dealer license?
Selling vehicles for a profit without a license is illegal in every state. If caught, the penalty is a hefty fine and even possible jail time. Here’s a list of news articles where people have been caught, fined, and sentenced to jail for selling cars without a license:
How can I get a dealer license to sell cars?
Tutorials for how to start your own car dealership and get a dealer license in every state. View tutorials.
Can I get a car dealer license with a felony?
Have a previous felony? Check out this post on Getting a Dealer License With a Felony.