How to Become an Auto Broker: Education and Career Roadmap
Learn how to become an auto broker. Research the required training, beneficial experience and necessary licensing involved in beginning a career in auto brokering.
Do I Want to Be an Auto Broker?
The term 'auto broker' is a broad one often used to describe various career paths. This field might include independent brokers, car dealers and any degree of auto salesperson in between these opposite ends of the spectrum who work with dealerships and individuals to facilitate the sale of automobiles. Auto sales can be very competitive, and long work hours, including nights and weekends, may be required for success.
There are no specific educational requirements for any of these careers, but each one of them requires various local, state and federal licenses. Licensure requirements vary from one state to the next. The following information outlines the various steps to enter a path toward this field.
Becoming an Auto Broker
Step 1: Obtain Knowledge of the Automotive Industry
While there are no set experiences or education guidelines required to become an auto broker, you can't help your clients if you don't know what you're doing. It is highly recommended that a working knowledge of the automotive industry be acquired before striking out on your own. You could obtain this by working under another independent auto broker or under a car dealer as a salesperson at his or her dealership.
Another option is to acquire a formal education via attending one of the many automotive schools available. One such school is the National Auto Dealers Association's (NADA) Dealer Academy. The NADA Dealer Academy includes six weeks of classes and 45 weeks of training in an actual auto dealership. Students learn such career duties as how to work auctions to obtain vehicles for resale and how to correctly price these vehicles.
Step 2: Decide Your Career Path
Independent auto brokers are self-employed individuals who often choose to work as intermediaries between dealerships and individuals. Their job is to help a client find a specific automobile that will fit a set number of needs and then negotiate a lower price with either the dealership that owns the car or the individual selling it. There are no guarantees that work will be available and as with any self-employment opportunity, you take all of the inherent risk upon yourself.
Car dealers are the more familiar form of auto brokers. These individuals are the ones who own and run car lots. As a car dealer, you can choose to take the route of the franchisee and associate your lot with a brand name. This can provide valuable resources for your new business. Optionally, you could decide that the risks of self-employment or owning your own business are not for you and continue to work as a salesperson under a car dealer.
Step 3: Apply for Any Licenses Needed
If you decide to become an auto broker, you will need to make sure you're legal. At the very least, an independent auto broker requires a selling permit in order to buy and sell used vehicles. A car dealer needs a selling permit, dealer's license and 'Doing Business As' (DBA) permit. The dealer's license gives holders the right to purchase and sell new vehicles, while the DBA permit allows for the choosing and place-holding of an original business name.
Step 4: Use Your Dealer's License to Access Automobile Shows and Auctions
Car shows and auctions provide an excellent place to pick up stock for a new broker. While obtaining physical vehicles for resale might not be your chosen job as an independent auto broker, car dealers should definitely look into this option as a means of stocking their car lots.
Step 5: Commence Business
Once you have chosen your career path and obtained all of the proper licenses, you are free to begin transacting with customers. Be sure to maintain your licenses so that they are current. Failure to comply with all laws and regulations can result in hefty fines and penalties.
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