Car buying isn't something that always happens at a big car dealership. People buy, trade, and sell cars all the time on Facebook Marketplace, eBay, or Craigslist. These types of sales happen every day in the state of Iowa. If you go to Iowa's Facebook Marketplace right now and simply type in "car", you'll find everything from a 1999 stretch limo, a 2012 Chrysler 200, and a 12v ride-on toy jeep.

If someone wants to buy a car, fix it up, and sell it for profit, I'd consider them a pretty handy person. If you have the time, knowledge, and resources, it can be a pretty fun way to make some extra money if you're into working on cars. I wish I was a bit more mechanically inclined myself.

Did you know there's a limit to the number of times a person can "flip a car" in the state of Iowa, per year, before they'd need to purchase a dealer's license? Is it just me or does this number seem really low?

Unsplash - Aaron Huber
Unsplash - Aaron Huber

When I first started looking into how many cars per year someone was allowed to sell before needing a license, I just assumed most states would have a number between 10-12. That would give someone the opportunity to make some extra cash about once a month each year. Boy was I wrong.

Iowa Dealership License

According to the Iowa DOT, "Iowa law requires a person selling and/or rebuilding for resale more than six motor vehicles during a twelve-month period to be licensed by the Iowa Department of Transportation. Failure to obtain a license" while selling more vehicles is a violation of Iowa law and may result in criminal charges being filed by the Bureau of Investigation & Identity Protection."

The fees for a dealership license are $70 registration fee, $70 dealer license fee, and $40 dealer plate fee (per plate).

I might be completely wrong here but does 6 not seem extremely low? Selling a car is not illegal, so why is there a limit on the number of times a person can sell one? Supposedly, you aren't supposed to sell a car, with the intention of making a profit, anywhere in North America, according to Canadian Gear Head.

Canadian Gear Head says,

The rules change based on your location but one thing that everyone agrees on is this: If you’re planning on buying a car strictly to make a profit when you sell it, you need a dealer’s license. That overrides any allowable number of cars that might be listed by a state or province.

The average number of cars you can sell each year, in the U.S. is 4, before needing a dealer's license. This actually puts Iowa a bit higher than the national average. In the state of Indiana, you're allowed to sell 12 per year.


If you've made it this far, I just want to let you know the article is over. I shared the information I've discovered and you won't learn anything by continuing to read further. All I wanted to add was that for some reason, this bothers me.

What happened to the land of the free? Selling a car is not illegal. Why does it matter how many you buy and fix to try and make some extra money? I'd call that great entrepreneurship. Don't we need more of that in America? If you want to buy a car, store it in your own garage, work on it in your own garage, and then sell it out of your own garage, why is there a limit to the number of times I do this on my own property?

I understand there has to be some kind of cutoff. We don't want people hoarding a ton of cars in their garages that just sit around and create some kind of junkyard. But this stinks for someone who is really just trying to make a few extra bucks. Even though the fees aren't wildly expensive, paying taxes on this stinks.

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