How to Obtain an Auto Auction License in Florida

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What Is a Florida Auto Auction License and Who Needs One?

Anyone who wants to sell motor vehicles at auction in the state of Florida needs to be properly licensed by the Department of Highway Safety and Motor Vehicles. While there are six different types of motor vehicle dealer licenses in Florida, only the following licenses allow a dealer to sell through an auction process:

  • License Type VW�allows the dealer to buy and sell wholesale with other dealers or through auctions
  • License Type VA�is specifically for dealers who buy and sell cars at auction, but not on a retail basis

What Does the Licensing Process Involve?

Obtaining an auto auction license is not the first step in the process of becoming a legally licensed motor vehicle auctioneer in the state of Florida�it�s the last. There are a number of requirements that must be met before submitting an application for an auto auction license. These include:

  • Successful completion of a state-approved Florida dealer license class
  • Proof of ownership or rental of an office approved by the Division of Motorists Services Compliance Examiner
  • Business registration with the Florida Secretary of State, Division of Corporations
  • A Federal Employer Identification number issued by the IRS
  • A Sales tax number issued by the Florida Department of Revenue
  • Proof of garage liability insurance (single-limit liability coverage of $25,000 and personal injury protection coverage of $10,000)
  • Forms related to the structure of the business (e.g., Articles of Incorporation, Partnership Agreement, etc.)
  • Fingerprinting fee (currently $54.25 per person)
  • $25,000 Auto Auction surety bond
  • Completed Florida Dealer License Application and application fee (currently $300 per main business location)

Bear in mind that all Florida auto dealer licenses expire on April 30 each year, regardless of the month of issue. To renew your license, you will need to show proof of having completed eight hours of continuing education and pay a renewal fee (currently $75).

Why is a Surety Bond Required?

The surety bond is an auction dealer�s guarantee to conduct business in accordance with all applicable state laws and industry standards as specified in the terms and conditions of the bond agreement. Thus, the bond protects consumers from financial loss resulting from the unlawful or unethical conduct of an auto auctioneer. The $25,000 bond amount, referred to as the �penal amount� of the bond, is the maximum amount available to pay a given claim against the bond.

What Happens When a Claim is Filed?

Upon receipt of a claim, the surety company will investigate to make sure that it is valid and will then typically pay the claim on behalf of the auction dealer. However, every surety bond agreement includes an indemnification clause that holds the surety company harmless, so the auction dealer is legally obligated to repay the surety company. Essentially, the surety company is advancing money to the dealer, but that advance must be paid back.

How Much Does an Auto Auction Bond Cost?

The primary factor in determining the cost of any surety bond is the bond applicant�s personal credit score. If your credit is good, you will pay as little as 1% to 3% of the $25,000 bond amount. If your credit is poor, you could pay a higher rate.

Get Bonded Today

At Single Source Insurance, we�re here to help you navigate your way through the licensing process and get you the surety bond you need to become a Florida-licensed auto auction dealer.

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