Cost for Florida Dealer License
Cost for Florida Dealer License
The cost for a Florida Dealer License is based on a number of factors. It’s much more than just the cost of the actual license fee ($300). In this article I want to give you a more complete feel of the cost for used motor vehicle Florida Dealer License so you can see it clearly and build a suitable budget. The state of Florida requires you to have a location and that as you can guess, can get costly depending on your location. My company sets up dealerships in the state of Florida, and so we can give you a good view of actual costs as outlined in this article. Everybody wants to own a dealership, and I get it. We all want to control our own financial destiny. But you have to be aware of the costs to be the boss. Before you get too excited, peep this.
Location
Your biggest costs will be your location. At the bare minimum, you will need an enclosed 10X10 office with a parking space suitable for 2 medium sized cars. You have to show proof of ownership or a lease document. Now depending on where you place your Dealership in Florida, you can pay as low as $600-750 in Orlando area and as high as $1800 a month in Miami (for the same space). So you have to look around or contact a realtor for assistance. You can contact my firm as well, we provide this for our full service clients. These costs are based on a small office sized Dealership. If you want something larger, you will need to consider this. Some of you reading this article have a bigger budget and want to buy or lease some commercial property for your Dealership. Commercial property that you are looking at as a possible dealership may have other hidden costs that you may incur too (quite by surprise). So always build an extra 10% onto your construction/renovation budgets. The cost of purchasing or renting a commercial property can range from a few thousand dollars per month for rental properties to several hundred thousand dollars for purchasing a commercial building. And you know how expensive property can be, especially towards South Florida. If the property requires renovations or upgrades to meet the necessary codes for a used car dealership, this will add to your costs. Besides the regular zoning permit and business license fees at the city planning department, you have fire Marshall inspections, etc. If you are working with new construction, or just putting a trailer on a plot of developed land, your costs may include remodeling, installation of specialized equipment and fixtures, and any necessary electrical and plumbing work. And don’t forget all the permit and license fees as applicable. After you have secured a suitable location, you can contact the state for a pre dealer license location inspection. This is highly suggested if you are working with new construction.
Insurance and Bond
Next biggest expense will be your insurance policy and your surety bond. Liability insurance protects the dealership and its employees against any potential lawsuits or claims filed against your Dealership by your (ex) customers. Your Garage liability insurance policy will be based heavily on the location of your Dealership and it’s size. Minimum liability you have to carry is $25,000. Your Dealership Insurance must include personal injury and property damage. Think of spending at least $1300-1800 a year on a small office based Dealership with two (2) car parking spaces. Besides the insurance, you need a bond. The bond must be in the form of a surety bond and is required to protect consumers from any potential fraud or mismanagement you (your Dealership) may commit. So you are forewarned, keep everything clean and above board. Word to the wise, when selling a vehicle, fill out any necessary disclaimers and have your customer sign these documents. Keep them on file for at least 10 years. The cost of a $25,000 bond will typically range from $350 to $1,500 per year. The cost can get high depending on your financial background. The bond company looks at your FICO and other things, such as any bankruptcies, etc.
Equipment
If you are starting out small, you can get by with your laptop and smartphone. You can do a lot with apps and an iPhone these days. All types of business assisting apps are in the App Store and Google play store. As per the state of Florida, Just be aware you need desk, two chairs and a locking file cabinet in your office.(to store client files securely).
The (almost) Total Cost for Florida Dealer License
The Cost for Florida Dealer License can vary based on all of the factors I listed above, plus a few smaller filing fees that I list below. If you are setting up a wholesale dealership, then your location requirements will be lower. You can probably get a suitable office for as low as $400 or less in some areas. On average, the cost to set up a Florida Used Car Dealer License ranges from $3,000 to $7,000.
After you have received your Florida Used Car Dealer License, you have a few other things to think about. I didn’t include these costs of goods and services in your start up, but they are technically apart of your costs to launch your dealership.
Inventory:
You have to put together a strategy and budget on how to stock your inventory. Do you get a floor plan? Do you take out a loan or use your own money. I provide business loans by the way…for start up and existing businesses.
Marketing and Advertising: At some point you have to get the word out there. You cannot dentin on foot traffic. Yo will need to spend money on internet and physical based marketing and advertising. These expenses are necessary for promoting the dealership and attracting customers. A decent website for gathering leads and showing your inventory is a must have.
Legal and Accounting Fees: Legal and accounting fees should be minimum in the infancy of your Dealership. If you purchased property for your Dealership and/or took out loans, you may have been using a legal or accounting team already. These are times of expense that will be with you in the very beginning and will grow as you grow. You don’t have to be an expert at everything. Focus on what you do best, selling cars… and delegate responsibility to your team. You are the boss!
If you want my firm to set up your Dealership for you (anywhere in the state of Florida) Give us a call. You can get started with $3000 down (our fee) and pay expenses as they come in. An additional $500 applies, if you need us to find a location for you.
