Suppose you’re exploring how to enter the auto resale industry. In that case, you’ve likely come across advice suggesting that getting your wholesale dealer license in another state is a quick and easy solution. It’s a popular option for entrepreneurs who want to access auto auctions or start flipping cars with fewer regulatory hurdles. But is it really that simple?
Let’s break down the pros and cons of getting your dealer license out of state, and help you determine if it’s the right move for your business goals and long-term compliance.
Why Dealers Choose Out-of-State Licensing
- Lower Barriers to Entry
Some states—like Wisconsin or Arkansas—don’t require residency to apply for a wholesale dealer license. That means you can legally obtain a license in that state even if you live elsewhere, giving you access to dealer auctions and wholesale vehicle purchases.
- Cost Advantages
States vary in terms of licensing fees, bond requirements, and office setup expectations. In some cases, licensing out of state can save hundreds or even thousands of dollars—especially if your home state has more stringent or expensive requirements.
- Access to Centralized Dealer Operations (CDOs)
States like Wisconsin allow non-residents to use Centralized Dealer Operations—shared office spaces that meet legal requirements for physical business addresses. This enables out-of-state applicants to meet the “brick-and-mortar” rule without maintaining a whole office.
- Faster Setup with Expert Help
Working with a trusted provider like US Dealer Licensing can make the out-of-state licensing process fast and efficient. We help you navigate red tape and guide you through the compliance requirements specific to your chosen state.
The Downsides You Need to Consider
- You Still Need a Legitimate Business Presence
Just because you don’t need to live in the state doesn’t mean you can skip compliance. Every state still requires a functional business address, lease agreements, signage, and access to records. Cutting corners can put your license at risk.
Tip: Review what’s required in Wisconsin here.
- Out-of-State Enforcement Still Applies
If you assume being out of state means your license won’t be scrutinized, you’re wrong. Several recent cases in Wisconsin have shown that licenses associated with non-functioning offices or shell operations have been revoked. WisDOT and other agencies are cracking down.
- It May Not Fit Your Long-Term Plan
If your goal is to sell vehicles in your home state or transition into retail sales, starting out-of-state may not be the best fit. Some states have strict regulations regarding the titling, storage, or transportation of wholesale vehicles.
- Tax & Registration Complexities
Buying and selling vehicles across state lines may involve varying tax implications, titling delays, and compliance hurdles. It’s manageable—but only if you’re prepared and informed.
What’s the Right Choice for You?
Getting your dealer license out of state can be a smart move—if you do it correctly. It’s ideal for:
- Part-time car flippers
- Entrepreneurs looking to access auctions
- Those operating strictly in the wholesale market
- Buyers reselling to other licensed dealers, not the public
But it may not be ideal for:
- Dealers who want to sell directly to consumers (retail)
- Those unable or unwilling to meet physical office requirements
- Businesses planning to expand in-state long-term
Still not sure? That’s where US Dealer Licensing comes in.
How US Dealer Licensing Can Help
We’ve helped thousands of dealers across the U.S. successfully obtain and maintain their wholesale dealer licenses—including those from out-of-state setups. We walk you through:
- Choosing the right state for your goals
- Securing a compliant office lease
- Preparing for audits and recordkeeping
- Meeting all documentation requirements
Don’t take chances with your business—read our testimonials and see how we’ve helped others get licensed the right way.
Ready to Explore Out-of-State Licensing?
Whether you’re in California, Florida, or New York, US Dealer Licensing can help you obtain a wholesale dealer license in a state that works for your business—without the guesswork.
Start your application today, and let’s get you on the road with confidence.