signing license paperwork

Difference Between a Salesperson License and Dealer License

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If you want to start a dealership business, you’ll need a car dealer’s license. You may also need a salesperson’s license if you want to work in your dealership as part of the sales team. Each application has its own separate fees and requirements, and these vary based on the state you live in. 

Let’s learn more about these two types of licenses and what they allow you to do. 

Dealer vs Salesperson License: Which Do You Need? 

A dealer license allows you to purchase used and new vehicles from car manufacturers and auctions, both in-person and online. If you plan to open a dealership, you will need a dealer license to operate. This is how you will get your inventory and add to it with new, used and repossessed vehicles. 

A salesperson license only allows you to sell the vehicles the dealership has already purchased to customers. In other words, you can sell the inventory on the lot but you cannot purchase anything. If you plan to purchase and sell vehicles, you’ll need both a salesperson and a dealer license. 

Licensing Requirements 

Obtaining a car dealership license is similar to starting a business. You’ll need your federal tax ID number and the location of your business. You’ll also need proof of insurance, as you must have insurance on all vehicles. 

A salesperson license is different. You don’t need any business-related documents. Instead, you just need to show that you have auto insurance and a clean driving record. The fees associated with a salesperson license are also much cheaper. 

Surety Bond Requirements 

On top of the licensing requirements, there is also a surety bond requirement to consider. Typically, you don’t need a surety bond for a salesperson license, but you will need it for a dealer license. The amount varies depending on your state, but it ranges between $20,000 and $100,000. 

Renewal Requirements 

Once you obtain the licensing you need, you will have to renew it every year or two years, depending on the state you live in. Fortunately, the renewal process is much easier and cheaper than obtaining the original license. That being said, you may need to provide proof of continuing education in the auto industry to keep your dealer license. 

Now that you know the differences between a dealer’s license and a sales license, you can make the right decision for your business. is a huge database of repo vehicles being sold from banks and credit unions. You do not need a dealer’s license to shop with us – our vehicles are open to the public. Shop with us today!