How to Become a Motor Trader

Written by natasha jackson-arnautu
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How to Become a Motor Trader

To become a motor trader means to engage in the business of buying and selling motor vehicles. Requirements to become a motor trader vary by jurisdiction, but many have minimum requirements to become a licensed motor trader. If cars and sales peak your interest, then motor trading could be the right choice for you.

Skill level:
Moderately Easy

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Things you need

  • People skills
  • Sales ability

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  1. 1

    Decide if you want to trade cars to the public or privately. The licenses you need will depend on this fact. Selling privately does not require a license, but you could face serious penalties under the law. Public motor trading requires licensure, but the requirements vary by jurisdiction.

  2. 2

    Purchase a lot to house the motor vehicles you wish to trade. A legitimate motor trader must have a place customers can come to see the vehicles and process applications to buy a vehicle. In addition some jurisdictions will not approve your application for a business license without a location already secured.

  3. 3

    Apply for a business license to operate a motor trading business. Like any business, a motor trader must be certified by the local municipalities to operate a business within a specific jurisdiction. Most jurisdictions require proof of business location as well as proof of permission to trade vehicles at specified location.

  4. 4

    Secure motor trading insurance. Each vehicle on your lot must be insured for you to drive, as well as any employees that may operate your vehicles. Motor trading insurance can be quite costly, but it is necessary for a licensed motor trader.

  5. 5

    Apply for motor trade number plates for all of your vehicles. Test drives and vehicle relocation will require number plates to travel, and all vehicles must have plates before they are allowed on the road.

  6. 6

    Apply for liability insurance for your auto lot. Although each of your cars should be insured, your lot should also be insured to protect you against injuries or problems that arise with employees and customers.

  7. 7

    Wait for application approval and license, and start trading vehicles.

Tips and warnings

  • Check for specific requirements with your local licensing authority.
  • Operating as a motor trader without a license is illegal is some jurisdictions

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