Jetcityimage/Getty ImagesAlthough my time working at a dealership was mostly on the sales side, I did get to see how different parts of the business worked. One area involved acquiring cars for the company's used car lot (although most of the revenue came from new car sales), including buying vehicles at wholesale auctions. The experience quickly opened my eyes to the value of these dealer-only outlets and why some people want access to them. If this thought has ever crossed your mind, you'll want to know the details, whether you're looking to save money on a personal ride or to flip higher-margin, higher-quality cars. Keep in mind that there are pros and cons to buying an auction car.You may be familiar with Manheim, ADESA, ACV, or other dealer-only marketplaces, but the only way you're getting in to bid is with a dealer license. It's a secret club that requires more than a handshake and a wink to join. Every state regulates auto dealers to some extent. To bid yourself, you'll generally need a dealer license issued by your state, whether through your own dealership or another licensed dealer. In most states, setting up your own operation means obtaining a physical location (with minimum standards), passing a licensing exam, obtaining a surety bond, and jumping through several other hurdles. All for the privilege of buying used cars more cheaply than the public. If that hasn't scared you away, then read on. There are also some potentially dubious workarounds, which I'll explain, too. Keep in mind that none of what you're reading in this article is legal advice, just general information.AdvertisementAdvertisementRead more: These Car Brands Aren't Making It Through The Next RecessionHow to get a dealer licenseSmodj/Getty ImagesThen there's the used or independent dealer license, which permits retail sales. Certain states also have a separate category for new or franchised dealers. depends on the state. Some jurisdictions have different dealer licensing categories. A wholesale dealer license enables auction access and often has the fewest requirements, but you can't sell to the public. Then there's the used or independent dealer license, which permits retail sales. Certain states also have a separate category for new or franchised dealers.Beyond the business basics (setting up an LLC or corporation and obtaining a business license), most states require applicants to complete a dealer training school. You'll then need to obtain business and liability insurance. In addition, most states require dealers to have a surety bond, which is basically insurance, that if your dealership rips off a customer, the state has a way to recover the lost funds. The government doesn't want to encourage title washing or other illegal practices.Arguably, the biggest obstacle to setting up a dealership is the requirement for having a physical location. Depending on the state, wholesale-only dealers may be exempt, but retail dealers aren't usually so fortunate. However, what counts as a location varies by state. In Georgia, dealers only need a sales room, a landline telephone, and exterior signage. This has created a cottage industry of landlords who rent space to small used car dealers. Meanwhile, Virginia requires a minimum commercial building size of 250 square feet and 10 contiguous vehicle display spaces, along with other stipulations. In most states, the location must meet local zoning regulations, and the agency that oversees dealer licensing usually requires photos or an in-person inspection of the facility.Alternatives if you just want dealer auction accessImagedepotpro/Getty ImagesWhenever I run up against my state's annual limit for private vehicle sales, I calculate the numbers to go from car flipper to car dealer. It's usually a five-figure investment that doesn't include operating expenses and other headaches. But there are auction access alternatives that don't require a substantial financial commitment. The first option is to use an auction broker. These are businesses that may be licensed as dealers and act as intermediaries between wholesale auctions and the public. If you've ever bought a salvage title car through Copart or IAA and live in a state that restricts public access to these auctions, you've likely used a broker. Some brokers may also offer access to Manheim and other dealer-only auctions. Fees may be a flat rate or a percentage of the purchase price.AdvertisementAdvertisementBesides a broker, some smaller dealers may offer to bid on your behalf. The dealership where I worked didn't offer this to the public, but the staff was given limited auction access for personal use only. We had to pay for the car, auction fees, and a dealer fee. Vehicles were purchased on an as-is basis; expect the same whether you work through a dealer or a broker. Some brokers or dealers may want a deposit up front, so be cautious. Finally, the dubious part of auction access comes through outfits that offer a dealer licensing service, adding you as a "dealer agent" to an existing dealership operation. Whether this is legitimate, a gray area, or outright illegal depends on whom you ask and where you live. This isn't for casual car purchases, but for someone looking to flip cars more frequently. You'll pay sign-up and monthly fees, as well as a per-transaction charge. Proceed at your own risk.Want more like this? Join the Jalopnik newsletter to get the latest auto news sent straight to your inbox, and follow us or add us as a preferred search source on Google.Read the original article on Jalopnik.