How to get an Automobile Wholesale License

Wholesale dealers sell cars to licensed auto dealers or other wholesale dealers.

An automobile wholesale dealer license only allows you to sell vehicles to other wholesale dealers or licensed motor vehicle dealers. Most states require you to complete a wholesale dealer application form, purchase a surety bond, and pass a Department of Motor Vehicles (DMV) inspection of your dealership location. Some states require you to sell a minimum number of cars during the year to maintain your license, while others do not.

Things You'll Need

• Wholesale dealer license application
• Surety bond
• Articles of Incorporation or Articles of Organization

Instructions

1. Contact the Department of Motor Vehicles in your state to request a wholesale dealer license application or visit the website to download an application. Submit the application along with filing fees and other documentation such as proof of ID to the address included on the application form. Filing fees range from $100 to $500 or more, depending on your state.

2. Purchase a surety bond from a licensed insurance provider for the amount stated on the wholesale license application. A surety bond helps keep the licensee honest when conducting business transactions. In the event of a lawsuit or settlement, the state will use bond monies to help cover these costs. Submit an original copy of the surety bond signed by you and your insurance provider. Some states require the bond to be notarized.

3. File articles of incorporation if you're forming a corporation, or articles of organization if you're forming a limited liability company or partnership with the secretary of state's office per state regulations. Send a copy of business entity articles to the Department of Motor Vehicles.

4. Pass a dealership inspection by DMV dealer licensing agents. Inspection of your business location may include verification of dedicated business phone lines, office space, and vehicle display space. Verification of licensing paperwork may also be included in the inspection. Vehicles may also be inspected at this time.

Tips & Warnings

• Some states require you to complete an educational course in dealership rules and regulations before issuing a wholesale dealer license. You may also have to complete a criminal background check.

• Failure to follow the rules and regulations outlined by the DMV may result in the loss of your license or the filing of criminal charges against you.

References

• Gov-Auctions: How to Get a Car Dealers License

Resources

• California Department of Motor Vehicles: Dealer Licensing Requirements