Jun 25

Do I have to Have a Permit or License to Buy at an Auction?

by in Dealer Only, General Auction Information, Not Dealer Only

Auto auctions come in all shapes, sizes and flavors. Some auctions require you to be an active, paying member, and others only require you come on-time with money in hand.

A major factor to consider when attending an auction is whether you need a permit or license to enter. First, if you plan to go into this industry with the idea of selling cars for profit, your state may require you to obtain a car dealer’s license. I’d advise checking your local DMV for laws governing your state. Also, some auctions are only open to auto dealers so, before driving to the auction, be sure to check ahead on the license requirements.

Secondly, some states don’t require you to have a license to enter normal auctions but do require you to have a business entity such as a LLC or S Corp before you can purchase. This rule lifts the liability from you, the purchaser, and the auction house and places it firmly onto the shoulders of your corporation. Again, check the state requirements by contacting either the local DMV or the auction house and requesting a requirements sheet.

Lastly, remember even if the auction doesn’t require you to have a permit or a license, they may require you to have insurance before you can drive away from the lot with the vehicle. Although it’s the buyer’s responsibility to do so, the auction house can be fairly firm on this stance so make sure you have the proper accommodations in place before you leave the lot. In reference to auctions, my favorite set of words are “due diligence”. You must take the time to research the place where you intend on purchasing well before arriving tp participate. Doing so will save you a lot of time and money in the long run. 

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