Starting my business of selling cars, need some help from those experienced! (LONG)

**CoreyC80** · 06-05-2007 02:24 PM

Okay, well b/c of the resources I have decided to go ahead and start buying wholesale cars and selling them...

I have been brainstorming and I have come up with a few questions... (edit: a LOT of questions)

Anyone familiar with obtaining a dealer license in the state of VA...I will be looking into info at the DMV soon but just wondering if anyone had any personal experience in VA..

TAX ID number
Starting up a business tax id number. so far i have the www.irs.gov website, anyone have direction here? I have to probably get a Tax id as opposed to using my social since i may have to use resources outide of my own (employees)...

REGISTRATION/INCORP
Things I need to know more about FEIN and Certificate of Incorperation?? Copies of Articles of Incorperation...found this info while searching the archives here but anyone can elaborate on these things??? Business registration? These are things I am trying to learn about...

INSURANCE
how does that work with multiple cars not driven DAILY but driven by others?

WARRANTIES
I would like to provide something for anyone buying a vehicle from me...I will check them out and recondition them but I would like to have peace of mind and i am certain the buyers would too...

FINANCING
Any info on working with financing clients for buyers? or even info on financing myself for buyers i.e. credit reports, legal parts of selling

AUCTIONS
What's needed to attend?? only a dealer license?

LOANS
Considering start up using money from my home equity, it's about 80k-100k, i won't have a lot to start with but i think that's a pretty good amount for decent inventory. but i would really not prefer to use my house as collateral as I do want to eventually move and use the equity on a new home...
Any info on loans for this type purpose also with considering that i'll be using a TAX ID and not my social???

I know it's a lot of questions but any help with any of it would all be greatly appreciated!!!

I probably will have more but if you have any other advice that would be great too!

**brianaaron** · 06-05-2007 03:06 PM

the fastest way to answer every question you have is to walk into a dealer auction, they never check for a liscence when you walk in there are too many people coming in, look for a table that will be advertising something called a floorplan, a floorplan is like a revolving line of credit almost anyone can get one, and since you own a house it will even be easier. most beginner floorplans start at 100k. you pay the interest on the floor plan every month. it is usually prime plus 2.0 percent of the value you currently have on the floorplan. i could write forever there is alot to it. pm me your phone number and i will call you and tell you everything i know

**yourhostingspot.com** · 06-05-2007 03:51 PM

With the tax ID, If you just register your company as an LLC you'll get a tax ID number. It is something great to have.

**ceo77** · 06-07-2007 10:16 AM

Depending on what state you're in you will need.

A registered business (Inc. LLC ect.)
Tax ID
Surety Bond (and you need good credit to get one of those)
You also need insurance for your vehicles.

**CoreyC80** · 06-11-2007 10:44 AM

Originally Posted by ceo77

Depending on what state you're in you will need.

A registered business (Inc. LLC ect.)
Tax ID
Surety Bond (and you need good credit to get one of those)
You also need insurance for your vehicles.

Okay this is in VA...so far i found a great spot for having a nice lot, i don't know that i can afford it yet, but it's up for rent or sale...id like to buy it but i'll look into it this week...

Now, I am new to this...i am trying to search but it won't let me search for "LLC" what do i need to do to get that title?

I am going to have to look up surety bond and what exactly that is...but the issues is with credit...using a TAX ID number as opposed to my SSN how will it reference any credit...or do i somehow have to estabolish credit with my TAX ID??? I'm just not sure how that seperation works exactly.......???

**ceo77** · 06-11-2007 10:56 AM

Originally Posted by CoreyC80

Okay this is in VA...so far i found a great spot for having a nice lot, i don't know that i can afford it yet, but it's up for rent or sale...id like to buy it but i'll look into it this week...

Now, I am new to this...i am trying to search but it won't let me search for "LLC" what do i need to do to get that title?

I am going to have to look up surety bond and what exactly that is...but the issues is with credit...using a TAX ID number as opposed to my SSN how will it reference any credit...or do i somehow have to estabolish credit with my TAX ID??? I'm just not sure how that seperation works exactly.......???

LLC stands for limited liability company. It shouldn't be too hard to look up, you can start by going to the library or something or you can look up a law firm that specializes in incorporating businesses.

The next step would be to get your tax ID and register your business in the state of VA

Next you would apply for a auto dealer lic. - That will allow to go to dealer auctions and get those huge discounts. You will also be able to by as may cars as you want.

Some states require that you have a surety bond before you apply so thats something you want to look into right now. Its like an insurance policy for your business.

Lastly, you probably wont be able to use your tax ID in the beginning because you won't have any credit, and if you somehow are able to there is a 99.9999 % chance that you will have to give a "personal" guaruntee meaning you will have to use your SSN anyway and will be personally responsible if you default. To build your business credit start by going to www.dnb.com

good luck.

**WanganRunner** · 06-20-2007 04:45 PM

Originally Posted by CoreyC80

Okay this is in VA...so far i found a great spot for having a nice lot, i don't know that i can afford it yet, but it's up for rent or sale...id like to buy it but i'll look into it this week...

Do you mean the lot going for $75k on DC Craigslist right now?

Anyway, shoot me an email. I'm working on getting a dealer's license in DC or VA at the moment, we should probably chat. I'll shoot you a PM.

**MikeAnd** · 06-20-2007 05:31 PM

If it were me, I'd spend an hour or two with an accountant or a lawyer who specializes in business entity formation and get their advice on what type of entity to use, how to structure it, and such.

With respect to the auto license, I would stop by the agency in your state that is responsible for licensing (in person) and have a chat with them to hear what goes into getting a license. Most government agencies of that type are more than happy to share their knowledge with you and help you obtain the proper licensing.

**WanganRunner** · 06-21-2007 06:34 AM

Originally Posted by MikeAnd

With respect to the auto license, I would stop by the agency in your state that is responsible for licensing (in person) and have a chat with them to hear what goes into getting a license. Most government agencies of that type are more than happy to share their knowledge with you and help you obtain the proper licensing.

Eh, sort of, but sometimes not so much.

The DMV is generally the agency that would be in the position to hand out that information in most counties/cities, and the employees working there don't tend to know very much about the licensing process.

If you want to go the standard route and open an actual lot, it's more straightforward, but if you intend to toe the line and want to figure out what the bare minimum is to get licensed, they won't be much help.

I speak from experience, in several states.