Is this legal?
Yes! And the reason is the way AutoIncome structures the used car dealership which holds the used car dealer license. You are NOT renting a dealer plate nor renting a dealer license, both of which are illegal. AutoIncome sets members up with a local used car dealership that is structured as a LLC. AutoIncome simply makes everyone a member of the LLC which gives the member the legal right to buy and sell cars for the LLC. Each member buys and sells the cars as an agent for the LLC and keeps all the profits he or she personally generates.
Can I sell cars retail to the public?
Yes, the used car dealership can sell cars retail to the public.
All of our Co-op used car dealerships have retail licenses which allows retail sales to the public. Just for clarification though, you the member are not selling cars to the public, the used car dealership is actually selling cars to the public. You, the member, are just acting as an agent for the Co-op used car dealership.
Can I sell cars out of my house or driveway?
There is no need to
sell cars out of your driveway with our program. AutoIncome sets you up with a
local Co-op used car dealership where you can conduct your business and allow you to portray a professional image. AutoIncome also strongly suggests selling cars on the Internet. The Internet is a powerful tool for selling cars and it is poised to explode in the next few years. Why spend countless hours showing cars in person when you can sell them online with much less effort.
How many dealer plates do I get?
Each member gets one (1) insured used car dealer plate.
Can I attend dealer only auctions?
Yes, members can attend dealer only auto auctions. Attending dealer only auto auctions is one
of the biggest benefits of having a used car dealer license. You can find dealer only auctions easily online. Two of the biggest dealer-only auctions are located online at www.adesa.com or www.manheim.com. Both of these used car dealer only auto auctions are great sources for used cars. Some used car dealer only auto auctions sell up to ten thousand used cars per day..!
How can I get a list of auctions in my area?
You can get a list
of auctions in your area by searching on the Internet. Two of the biggest
auction houses are www.adesa.com and www.manheim.com.
There are also thousands of small used car auto auctions that are held at local used car dealerships
and tow companies. The best way to find these smaller auctions is
to build relationships with other car dealers and ask them if they know
of other auctions in the area. You can also ask the management at
the auctions you visit if they know of other auctions in the area.
Each auction usually operates on a particular day of the week.
In the New England area, Mondays are Greater Maine Auto Auction in Gray Maine, Tuesdays are American
Auto Auction in Dighton MA, Wednesday is Southern Auto Auction in CT, Thursday
is New England Auto Auction in Londonderry NH, and Friday is Adesa Auto Auction
in Framingham MA.
Do I have to pay sales tax on the cars I buy and sell?
Car dealers are exempt from having to pay sales tax on the vehicles they
purchase for resale. The sales tax is passed to the retail buyer who pays when
they register the car. However, depending on what state your used car dealer license
is located, you might have to collect sales tax from the customer.
All policy and procedure will be fully explained to you once you are a
member of the Co-op used car dealership.
Do I have to pay income taxes on the cars I buy and sell?
do. You are in business and you need to pay income
taxes on your profits. All members are treated as independent contractors and you will receive from the Co-op used car dealership a 1099 which you need to file with your income tax form 1040. You simply keep track of your income and expenses and hand everything over to an accountant who will prepare your income tax returns. Members usually report their income on a schedule C, which is attached to their 1040 Income Tax Form.
Where will my dealership be located?
AutoIncome has Co-op used car dealer licenses nation-wide. The particular Co-op used car dealership you will be part
of could be located in any of the fifty states. We do however tend
to deal with about 20 states on a continuing basis because their laws
for operating used car dealerships are favorable. Please remember that you
do not need a used car dealer license from your state to buy and sell cars in your
state. A used car dealer license transcends state lines. For example a used car dealer from
Florida can legally sell cars to anyone in the country, they are not restricted
to just selling cars to Florida residents. Also, a person living
in Oregon is not required to buy a car from an Oregon used car dealer, they can
buy a car from any used car dealer in the country. For more information about your legal rights you can research "Interstate Commerce" on Google.com AutoIncome does try to
place members on local Co-op used car dealerships, however Autoincome can not guaranteed exact placement. Please call AutoIncome for further information on
where we are currently setting up Co-op used car dealerships and placing new members.
Can I buy and sell cars in my state with an out-of-state license?
A used car dealer license transcends state lines. A dealer located in Arizona
is not restricted to selling only to Arizona residents, they can sell
cars to anyone in the country. A person living in Ohio is not legally
required to buy a car from an Ohio dealer, they can buy a car from any
dealer in the country they desire. Remember though, it is how you
conduct your business that makes it either legal or illegal. Tax evasion is
illegal while tax avoidance is perfectly legal. The way AutoIncome sets you up is the key to this question. We make you part of a used car dealer license which gives you the legal right to buy and sell cars for that dealership.
You will never have any problems with wholesaling a car to another dealer.
Also, AutoIncome does not allow any member to sell a car directly to the public as that could be construed as "curb-stoning" which is illegal. All retail
sales are processed through the used car dealership of which you are a member. The manager of the dealership
prepares all the paperwork for the retail sale. You the member, never buys and sells the used car in question. You, the member, are acting as an agent for the used car dealership, which in turn sells the used car to the retail buyer.
How long does it take to get the license?
We generally get people setup within three (3) days of being approved..
Do I have to obey local laws with an out-of-state license?
you do. Using AutoIncome's dealer license program does not absolve anyone from adhering to state
laws. If your town has an ordinance that states that you can not have more
than three unregistered cars in the driveway, then you can not have four
unregistered cars in your driveway. If your state has a lemon-law,
then you are obliged to follow that lemon-law for your customer. If you put twenty used cars on your front lawn and balloons
on each vehicle, you will have problems with the local officials.
However, if anyone ever comes to you and says "You can't sell cars
in this state with an out-of-state license" then you have that person
call our office immediately! AutoIncome has gone head-to-head with over
fifteen different states over the years concerning the legality of what we do
and we have never lost! It is legal to buy and sell cars in any
state with any used car dealer license, but that does not give anyone the right to disobey
or disrespect other local laws pertaining to the used car business.
Can I use the plate for personal use?
No. The used car dealer plates that AutoIncome supplies to members are for BUSINESS USE ONLY. Business use are
things like transporting a car from the auction to the dealership location,
transporting a car from the dealership location to a mechanic and test-driving
with a customer. Basically, as long as where you are coming from and
where you are going to is business related, then you are fine. Now
many people say to us "I know of this guy who uses his
plate all the time and whenever he is pulled over he just makes up where
he is going to and coming from and....". That is fine, but remember that person runs the risk of getting fined if they are caught. Yes, we understand that thousands of
people in the car business use their plates every day for personal
use, but remember it is just like speeding, if you get caught you could
get a ticket.
How much insurance coverage comes with the plates?
There is usually
$100,000 liability insurance and $25,000 to $30,000 worth of physical
damage with a $1,000 or 10% deductible, which ever is greater. Physical
damage covers fire, theft, comprehensive and collision. If you have questions about the amount of insurance coverage or have a special request for more insurance please feel free to call
How long has AutoIncome been in business?
Timothy Putnam, the founder of AutoIncome, started
in the used car business in 1990 when he attending the University of
New Hampshire. Mr. Putnam bought and sold used cars as a way to pay his way through school.
Almost immediately, Mr. Putnam saw the potential for the business opportunity and
started to market the Co-op Used Car Dealer License concept in early 1991. The name AutoVentures
was adopted in early 1994 and by 1996 AutoVentures was doing business nationwide. Timothy Putnam secured the name AutoIncome in 2007 because it was more descriptive of what the company offers. (People can earn an Income from Autos, hence AutoIncome) AutoIncome/Timothy Putnam has had over 2,000 customers, many of whom are still active with
the company. There are several members who have been with
AutoIncome/Timothy Putnam since 1991! So the short answer is that the company AutoIncome has been officially in business since February 2007 but the people behind AutoIncome have been marketing the Co-op used car dealer license since 1990. Read Timothy Putnam's story here.
Can I have other people use the plate to transport cars for me?
The member is the person listed on the used car dealer license and the insurance company, so only the member can
use the plate to transport cars. Any accident while someone else is "using" the plate will void the insurance coverage.
Can I share the license with other people to cut my cost?
Yes and no. Yes you can have "partners" and all of you
can share in the profits of the cars sold but only one person gets access
to the dealer auctions and there is only one dealer plate issued. The reason
for this is that the DMV will issue a limited number of dealer plates to each used car dealer license. If the DMV issues five plates to a used car dealer, then AutoIncome only has 5 "slots" on that dealership. If AutoIncome gave every member
two or three plates, then this business would not be profitable.
Also, dealer auctions limit the number of people that can enter as buyers,
so AutoIncome is faced with the same problem. If an auto auction only allows five representatives per used car dealership, then AutoIncome needs to have all five representatives be full-paying
Do I have to pay anything else beside the monthly fee?
Each member is responsible for any cost associated with their individual business. Such costs might include auction fees, advertising costs, paperwork administrative fees, legal fees incurred from your activities etc. Each Co-op used car dealership also imposes an "Administration Fee" which is $99 per retail car sale. This Administration Fee is customary in the used car sales industry and is usually passed on to the customer.
Do I need to have a lot or location for the cars I sell?
no. You will obviously need a place to store the cars after you
purchase them but you do not need to rent a location to display them.
Many of our customers only have one to five cars at a time so it is never
an issue. The way we train all of our members alleviates any
and all storage problems. Think about the following question: "Do
you want to be in the used car sales business
or the used car storage business?"
The answer should be apparent and is the basis of our training. If you have used cars in inventory then you have a problem! If you have
cars that have been sitting for two or three weeks then you should not
be buying more cars but selling the ones you have. AutoIncome trains our
members to sell cars within two to three days so that storage never becomes
a problem. AutoIncome also has dealerships all over the country so many times
the member can store their cars right at the Co-op used car dealer license location.
Is the dealership setup in my name?
No. The dealership AutoIncome sets up is a Limited Liability Company (LLC) and will have a separate
name. The purpose of the LLC is to gain the proper license to legally
buy and sell cars as well as corporate protection from lawsuits. Each member is then made a Member of the LLC via a resolution which gives the member
the legal right to buy and sell cars for the LLC. Members of the
LLC are basically partners and are entitled to the profits they generate.
Will the license be located in the State that I live?
yes; however, even if the Co-op used car dealership is not located in your state, it will
likely be in a neighboring state. AutoIncome currently has Co-op used car dealerships located
in over 20 different states and is opening new Co-op used car dealerships at the rate
of about three per month.
Will I be getting a wholesale or a retail license?
The Co-op used car dealership you join will be a Retail Used Car Dealer License.
Do I need a local business license?
No. You will be a member of
a LLC; the LLC has all the required licenses.
How long do I have to commit for ?
The business arrangement with the Co-op Dealership
is a month-to-month contract. We collect first and last two months
payment up front and when you want to leave the Co-op dealership, you simply notify
them and your last two months are paid up. The reason for this is
for members to wind down their business activities. Members generally
have a few cars they need to sell and the last two months allows the member to do so. AutoIncome also does not believe in long term contracts because if someone is struggling with the business there is no sense in forcing that person
to stay with the company. Basically, the member has full control over
when they want to leave AutoIncome.
When do my monthly payments start?
Your monthly payments start as
soon as you get the used car dealer license. For example, if you sent in your application
September 1st with your first and last two months payment and you got
your license October 15th, then your first monthly payment would be due
November 15th. Please note that the dealership uses an ACH service
for collecting the monthly payment so you will need a checking account.
What is the corporate structure of the Co-op Dealership?
AutoIncome sets up all its Co-op used car dealerships as Limited Liability Companies (LLC's) A LLC is a hybrid between a corporation and a partnership. This legal structure offers
the protection of a corporation but has the flexibility of a partnership.
One individual is designated as the Manager and is responsible
for the daily operations of the used car dealership. Everyone else is then added
to the LLC as members, giving them the legal right to buy and sell cars
for the used car dealership. Every person involved with the Co-op used car dealer license is then
entitled to the profits that they personally generate.
Am I liable for any of the other people on the license?
are not, and there are two parts to the answer. First part of the answer involves civil liability. If another member on the LLC
causes civil damages by his or her actions those civil damages stay with
the LLC. That is the whole basis of having a LLC in the first place.
For example, a member sells a used car with a bad transmission and that member decides
to "disappear". The customer who bought the car only has
recourse against the LLC, not the individuals that comprise the LLC. As a side note, AutoIncome can
assure you that we have checks and balances in place that
prevents a person from "just disappearing". The second part of the answer involves criminal liability. Criminal activity
affects not the LLC but directly affects the individual involved in such criminal activity. So if a person
was turning back odometers that person would be the one liable for any criminal
charges. Again, you can be assured that AutoIncome has checks
and balances in place that prevent this type of activity. For further
clarification on this issue please feel free to contact our office.