FAQ
Is this legal?
Each participating dealership is organized as a Limited Liability Company (LLC). Qualified applicants are admitted as members of that LLC and are also formally appointed as Authorized Dealer Agents. This creates a legal relationship between you and the licensed dealership, allowing you to act on the dealership’s behalf within the scope of your authorization.
As an Authorized Agent, you purchase and sell vehicles for the dealership—not as an independent unlicensed dealer. The dealership remains responsible for the dealer licensing, compliance, title processing, and required dealership records, while you operate under its authority in accordance with dealership policies and applicable state laws.
Because you are a member of the LLC, you share in the economic benefits of the business. Rather than earning a commission like a traditional salesperson, you retain the profits generated from the vehicles you buy and sell, subject to your agreement with the dealership.
Our program also operates within the long-established legal principles governing interstate commerce. The U.S. Constitution’s Commerce Clause gives Congress authority over interstate commerce, and the Dormant Commerce Clause generally prevents individual states from placing unreasonable burdens on lawful interstate business activity. While every dealership must comply with the dealer laws of the state in which it is licensed—and our members must follow all applicable laws where they operate—the structure itself is designed to allow Authorized Dealer Agents to conduct business across state lines in a lawful, compliant manner.
This is not a loophole or a way to avoid dealer licensing laws. It is one of the two established legal ways to buy and sell vehicles for profit: either obtain your own dealer license or become an Agent of an existing licensed dealership.
Can I sell retail to the public?
Remember, you are not personally selling cars with our program..! The dealership that you are a member of is selling the car. And all of our Co-op Dealerships have retail dealer licenses, so yes cars can be sold directly to the public.
Can I sell cars out of my home?
Remember, you are not personally selling cars with our program..! The dealership that you are a member of is selling the car..! The dealership manager conducts the paperwork for each sale at the dealership location. You, as the member are simply delivering the car to the customer. We do not recommend bringing strangers to your home for safety reasons.
How many dealer plates do I get?
Each member gets one (1) fully insured dealer plate.
Can I attend dealer only auctions?
Yes, as a member of our Co-op Dealership Program, you will have access to auctions like Manheim.com and Adesa.com as well as most independent auctions. Be aware that you the member are responsible for any and all auction fees including but not limited to signup fees, run fees, annual renewal fees, arbitration fees, etc.
Do I have to pay sales tax on the cars I buy?
No. Licensed car dealers are exempt from paying sales tax on any vehicles they purchase.
Do I have to pay Income Tax with your program?
Yes. At the end of the year the Co-op Dealership will give you a 1099 for your gross sales. You are required to keep track of all your expenses and your cost of goods sold. You will then need to pay income tax on the net profit from your activities. If you operate as an individual you will need to file a Schedule C with your 1040. We are able to “1099” a valid Limited Liability Company or Corporation if you wish.
Where will my Co-op Dealership be located?
We have Co-op Dealerships located nationwide and we try to place you on a dealership as close to you as possible. Be aware that you do not need a used car dealer license from your state to buy and sell cars in your state. A used car dealer license transcends state lines. A dealership in any state can legally sell cars nationwide, to anyone with no restrictions..! We strongly suggest our members to educate themselves with Interstate Commerce Laws and Dormant Commerce Clause.
Can I use an out-of-state dealer license in my state?
Remember, you are not personally selling cars with our program..! The dealership that you are a member of is selling the car..! You are not “using” our dealer license, as that would be illegal. You will be a member of a dealership with a valid dealer license. And that dealership has the legal right to sell cars to anyone in any state. Dealerships are not restricted to just buying and selling cars within their state. AGAIN, you are not “using” a dealer license to “sell” cars in your state..! That is not what our program is about..!
How long does it take to get set up with your program?
We get people set up within 24 to 48 hours.
Do I have to obey local laws with your program?
Yes..! Using our Co-op Dealer License Program does not absolve you from adhering to local, state or federal laws.
Can I use the dealer plate for personal use?
No..! The dealer plate that is issued is for business use only. Business use means things like transporting a car from the auction to the dealership, or transporting a car from the dealership to a mechanic, and/or test-driving with a customer. Driving from a restaurant to your home, or running daily errands is not business use and you are responsible for any and all tickets as a result of such misuse.
How much insurance coverage comes with the plates?
Our program provides $100,000 liability and $30,000 of physical damage with a $2,000 or 10% deductible, which ever is greater. Physical damage covers fire, theft, comprehensive and collision. If you have questions about the amount of insurance coverage or have a special request for more insurance please feel free to call our office.
Why do I need personal automobile insurance?
Our insurance company will not add you to the dealership policy unless you have personal automobile insurance.
How long have you guys been in business?
The company behind DealerLicense.net has been providing the Co-op Dealership Solution since 1990.
Can other people use the dealer plate issued to me?
No. The dealer plate issued to you is for your use only.
Can I share the license with other people to help cut my cost?
No. Only the Co-op Member is allowed to buy and sell cars under our program.
Are there any other fees I need to know about?
The monthly and $99 per car are the only fees to be a part of our Co-op Dealership Program. However, there are other fees to consider such as tax, title and registration fees as well as FedEx fees, etc… These fees are usually the responsibility of the customer purchasing the car. The total fees involved with a vehicle purchase is usually less than $100 per car.
Do I need to have a location to be part of your program?
No you do not need a location to be part of our program. All our Co-op Dealerships already have a location from which they operate. However, you will need some place to store and/or work on the cars you purchase, but you can not display for sale any car, at any location, other than the approved dealership location.
Is the dealership set up in my name?
No. All our Co-op Dealerships are already existing and have a name. Remember, we are not setting up a dealership just for you. Rather, our Co-op Dealerships are comprised of multiple independent contractors, just like you.
Will my Co-op Dealership be located in my state?
We make every attempt to place members with a dealership in their state, but this is not always possible due to availability and other circumstances beyond our control.
We do have enough dealerships located throughout the US that we can typically place you with a Co-op Dealership in a neighboring state, if your state is not available.
Is this a retail or wholesale dealer license?
All of our Co-op Dealerships have retail licenses. This allows you to sell cars both wholesale (to other dealers), or retail (directly to the public).
Do I have to pay any deposits?
Yes, our dealerships usually require a deposit for both auction access and the dealer plate. Any deposits collected are fully refundable and are meant to cover any liabilities that the dealership incurs due to your actions.
Do I need to have a corporation or LLC to use your program?
No. All of our Co-op Dealerships are already setup as Limited Liability Companies (LLC’s), affording you complete corporate protection.
How long do I have to sign up for?
Our program operates on a month-to-month basis. We do collect a first and last month’s payment upfront, so you are committing to at least two months. However, you can quit at anytime and your last month is already paid.
When do my monthly payments start?
Your regular monthly payments start one month after your “Start Date“.
What is the corporate structure of the dealership?
Our Co-op Dealerships are setup as either Limited Liability Companies (LLC’s) or as Limited Partnerships (LP’s).
Am I liable for other member’s actions?
No. All of our Co-op Dealerships have protections in place such as well-written operating agreements, surety bonds, and in-house legal council specializing in our exact Co-op Dealer System.
Our legal structure is rock-solid and focused on protecting the dealership as well as each individual member.
We have successfully defended our Co-op Dealership Business Model over the last 28+ years nationwide and all of our Co-op Dealerships are professionally managed, on a daily basis, to comply with all Federal, State and local laws.
Rest assured that you are 100% protected with our system.
What state is your dealer license in?
We have dealerships in 20 states and our program works nationwide.
