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How to Become an Auto Broker

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An auto broker is the middleman between the consumer and an auto dealership selling either new or used cars. Brokers remove the need for consumers to negotiate with car salesmen. Customers give the auto broker the list of car options and the price point. Becoming an auto broker requires getting licensed in the state where you plan on brokering cars.

National Auto Dealer Association

Contact your local National Auto Dealers Association (NADA) and your local National Independent Auto Dealers Association (NIADA). If you are new to the auto business, a few years spent working as a salesperson for a dealer and for a broker is wise. This gives you insights and relationships within the industry and helps you obtain the right licensing by being in good standing as a salesman. Working for another broker will also help you avoid costly mistakes as you start your business.

Licensing of Brokers

Go to the local Department of Consumer Affairs website or office and obtain an application for dealer licensing. Request information about the motor vehicle licensing board or other similarly named regulatory committee. If you are having trouble locating the right department, make a call to the Department of Motor Vehicles and ask who licenses auto brokers in your state. They can point you in the right direction. Most states require a minimum production level of selling three cars annually. Additionally, register with the Secretary of State as a business entity, and remain in good standing.

Application Inclusions

Most states require auto brokers to have a physical location, and to provide pictures or schematics of the office and potential showroom, bathrooms and displays. Hold a lease agreement for at least one year; your application should include a bond. Contact an insurance company to obtain the surety bond or provide a financial statement with a line of credit demonstrating solvency in the event of loss or dispute. Provide a copy of your dealership agreements. Fingerprinting and background checks are also mandatory in the process.

Networking and Advertising

Build a network of dealership and client relationships. Dealerships often enjoy the quick sales process of working with brokers. If you can bring clients in, you are likely to have a lot of dealers who want to work with you. Determine how you will get new clients, and implement a referral program so they feel good about sending family and friends to you.

  • start by contacting your local NADA (National Auto Dealers Association)
  • and your local
  • NIADA (National Independent Auto Dealers Association)
  • If your are new to the auto business, a few years spent working as a salesman both for a dealer and for a broker will give you a good overview of a very complex business
  • see links for NADA and NIADA below
  • Every state has its own regulations and laws governing auto sales. Be sure to thoroughly research the laws in your area before proceeding.

Kimberlee Leonard has trained more hundreds of professionals in telemarketing, sales and promotional events over the past 20 years. She brings humor and simplicity to her writing whether writing for small local brands such as Hawaii's or major marketing sites such as Kimberlee is a proud fourth generation Hawaii local.

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