Can a Felon Get a Dealer License?

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Those who have hired felons have learned that they make good employees. Felons may have to be willing to start over in a new field in order to find a job. Those with experience with cars may consider selling vehicles.

This blog post will address the question of whether or not a felon can get a dealer license.

  • What is a Car Dealer?
  • What is a Dealer License?
  • How Do You Get a Dealer License?
  • An Opportunity for Felons?
  • Recommended Action

What is a Car Dealer?

A car dealer is someone that sells or offers for sale at least five vehicles in a 12-month period, although banks or other financial institutions are exempt from this. A person that meets these requirements must comply with the Federal Trade Commission’s Used Car Rule.

There are two main types of car dealers, retail and wholesale. Retail dealers have more restrictions on liability for dealers insurance as well as a larger dealer belonged. Retail dealers are the only dealers allowed to sell to the public. Wholesale dealers must sell only to other dealers.

What is a Dealer License?

It is not necessary to have a traditional car lot to get a car dealer’s license, although a commercial location will be required.

Many states offers several different types of applications for a dealer’s license. It’s important to follow the state licensing requirement in becoming a car dealer:

  • Filing the application
  • Paying the fee
  • Following the dealer licensing rules

There are several different types of car dealer licenses:

  • New vehicle dealer license
  • Used vehicle dealer license
  • Wholesale vehicle dealer license
  • Motorcycle dealer license
  • Auto broker dealer license

State car dealer licensing is under the direction of the Department of Motor Vehicles (DMV). State laws are in place to protect the safety of the residents of that state. In most states a car dealer license is the same as an auto broker’s license.

There are a number of advantages to having a car dealer license. If someone buys and sells more than four or five cars a year, a dealer license is required. Someone who violates this by selling cars above this limit without a dealer’s license can be banned permanently from obtaining a dealer license.

Being a licensed car dealer also allows someone to buy cars in all 50 states.

Some of the typical requirements for a dealer’s license are:

  • Commercial business location with display space large enough for 4-5 cars
  • Completing a pre-licensing class
  • Office with a separate entrance
  • Dedicated business phone line
  • Posted office hours
  • Sign for the business
  • Business must be visible from the main road or street

How Do You Get a Dealer License?

Getting a dealer license is just part of the cost of doing business and shows compliance with the laws and regulations of the state along with a clear display of honesty and integrity.

An applicant must:

  • Take a class
  • Pass an exam
  • Submit an application
  • File for a bond
  • Submit photos
  • Pass an on-site inspection

Often the most challenging aspect of getting a dealer license is the zoning requirements in the city or county location. The location must be properly zoned to allow a retail dealership.

A dealer application must include several photographs of:

  • The building
  • An outside sign
  • The display area
  • The office
  • A business license
  • A resale permit
  • The telephone
  • Inside signs
  • A locked file cabinet
  • A checkbook
  • A DMV dealer book

A dealer must have an actual business address which is not a Post Office box or a residence in an area that is owned and approved by the state for retail car sales.

The requirements for a dealer license are strict to protect the public and to protect other dealers.

An Opportunity for Felons?

Someone that has been convicted of a motor vehicle dealer crime will more than likely not be granted a license. The following crimes will generally prohibit obtaining a dealer license:

  • Felony convictions relating to persons, property, or fraud
  • Automotive crimes such as odometer tampering, auto theft, or title forgery

If a felon has been convicted of a non-violent, non-motor vehicle dealer crime, this most likely will not affect his or her ability to get approved for a dealer license. These include non-violent crimes such as:

  • DUI
  • DWI
  • Shoplifting

Typically, a felon must wait at least three years after completion of all sentence requirements to apply for a dealer’s license.

It’s important to be honest when applying for a dealer license. If a felony isn’t disclosed but is found on a background check, this constitutes fraud and is punishable. It is a crime to falsify an application which could result in being sent back to prison.

Having their record expunged can give them the chance needed to begin with a clean record and succeed in obtaining a dealer license. Expunging a criminal record allows anyone to honestly state on a dealer application that he or she has not been convicted of a crime.

Recommended Action

It’s a significant challenge, but it might be worth it for a felon that wants to get a dealer license. Having his or her record expunged and also documenting any training programs or additional education could make the essential difference in a felon succeeding in getting a dealer’s license.

Having support from family, friends, or previous employers can make a huge difference. A felon doesn’t have to be defined by his or her crime. We are not defined by our mistakes but by how we recover from them. He or she can begin again and live an honest life no matter how difficult it might seem.

What do you think about this blog post? Have you or someone you know been in the situation of trying to get a dealer license with a felony? What was that like for him or her, and how did he or she achieve success? Please tell us in the comments below.

About the author

After earning his MBA from Benedictine University, Ron was looking for a new challenge and stumbled on the idea of helping the formerly incarcerated.

Using what he learned, Ron developed this website as a free resource and has worked with his team​ to continue answering questions for those in need.

4 thoughts on “Can a Felon Get a Dealer License?”

  1. This is really a great post. Even the US Dealer Licensing is dealing in these. We are specializing in Dealer License, Auction License, and Auto Dealer License etc and provide the opportunity to access many additional rescue vehicles in auction license. US Dealer Licensing wants to provide you as successful and essential resources.

  2. hello, i have a violent felony.
    I am trying to find out if i can get a auction license. To buy cars from an auction and sell them to car dealers is this possible?


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