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3 How To Become An Auto Wholesaler In California

(doylc.com) How to Become a Wholesale Car Dealer in California - Car wholesalers buy cars and then sell them to other dealers or at wholesale auctions. This means they do not make sales to the general public. In California, as in other states, obtaining wholesaler certification is not difficult if you follow the necessary steps with the Department of Motor Vehicles. Whether you're hoping to have a successful wholesale business or planning to get into retail at some point in the future, follow the steps below to become a California auto wholesaler.

How To Become An Auto Wholesaler In California

  • Fulfillment of the requirements

How to Become a Wholesale Car Dealer in California (with Pictures)

Read the DMV application checklist. The DMV provides a handy, editable PDF checklist that you can work through to complete your entire dealer application. It contains all the documents you need to fill out and submit before you are eligible to receive your dealer license.

If at any point you do not understand any part of the application, follow the links in the checklist or read the DMV Application Guide (OL 248).

How to Become a Wholesale Car Dealer in California (with Pictures)

Make sure you have a valid California driver's license. The checklist does not say that you must have a California driver's license, but you must have a state driver's license to be a legal dealer. You may see online opportunities to get an out of state dealer license, but these are usually scams. In any case, make sure your California driver's license is up to date.

How to Become a Wholesale Car Dealer in California (with Pictures)

Rent or buy a business location. To become a wholesaler, you need a place of business. However, you do not need a parking space or shop window. You need a place to park your vehicles and a business location, but it doesn't matter if it's the same place. You cannot use your home as a business location. Once you have a business location, make sure you have the following ready for later:

A lease, rental agreement or deed for your business location.

A photo of your business location as defined in the Merchant Application Guide (OL 248).

Your company headquarters will be inspected as part of the application process. Make sure it meets any additional requirements outlined in Place of Business Inspection.

How to Become a Wholesale Car Dealer in California (with Pictures)

Think of a name for your company. When you license and incorporate your business, you need to come up with a name to use. Think of something that explains what you're doing, like "Johnson Wholesale Auto Traders" or something similar. This is how you make it clear to potential customers that you are the right person for them. Your business name will be backed by a fictitious name statement that you must file with your state before applying for your dealer license.

How to Become a Wholesale Car Dealer in California (with Pictures)

Obtain a resale permit. Apply to your local equalization office for an equalization resale permit, which allows you to collect taxes. The application is free, but depending on your company's particular situation, you may need to pay a deposit. You must maintain this approval in order to obtain and retain your wholesale license.

How to Become a Wholesale Car Dealer in California (with Pictures)

Get a business license. You need a city and/or county business license to start your wholesale business. Contact your city or country chamber of commerce to apply for a business license. Either a copy of this license or a letter stating that your country does not issue business licenses is required to obtain your wholesale license.

How to Become a Wholesale Car Dealer in California (with Pictures)

Get a guarantee. A bond is a guarantee that the merchant will comply with state and local regulations and laws when dealing with sellers and customers. The bail pays the injured party compensation in the event that the trader commits fraud. For a wholesaler, the value of this bond must be $10,000. However, you only pay a percentage of that value based on your credit history. Visit a surety bond agency to get a quote on your bond.

Traders with good credit (over 680) pay around $100.

Merchants with medium credit (600-680) can expect to pay anywhere from $100 to $500.

Merchants with bad credit (below 600) pay over $300.

  • How to applying for license

How to Become a Wholesale Car Dealer in California (with Pictures)

Complete the dealer training program. To proceed with the application, you must enroll in and complete the dealer training program and receive a certificate of completion. This program is available at a number of locations across the country.

How to Become a Wholesale Car Dealer in California (with Pictures)

Pass the used dealer test. Once you complete the training program, you can visit your local DMV to take the used dealer test. This test assesses what you have learned in the dealer training program. You must pay a fee of $16 each time you take the test. You must pass the test to complete your merchant application.

How to Become a Wholesale Car Dealer in California (with Pictures)

Complete the required forms and applications. A number of forms are required on the wholesaler application checklist. Go back to the checklist and either click on the links provided or locate the forms by number on the CA DMV website. Be sure to fill out each application completely and truthfully to the best of your knowledge.

How to Become a Wholesale Car Dealer in California (with Pictures)

Attach the required documents. Attach all the documents required in the checklist to your completed application forms. In some cases, the checklist requires a specific order, so be sure to check the order of your documents in those cases. The required documents are usually proof of your company and location.

How to Become a Wholesale Car Dealer in California (with Pictures)

Check your application for completeness. This is a complicated application with many required forms. Therefore, review your complete application carefully to ensure all parts are present and complete. If your application is incorrect, you will need to pay the application fee again to reapply.

How to Become a Wholesale Car Dealer in California (with Pictures)

Submit your application and fee. When you have your complete application, take it to the nearest DMV professional inspection office. The locations of these offices are available on the CA DMV website. Submit your documents and pay your application fees. You will be notified if your application is accepted or rejected.

There is a $176 non-refundable registration fee.

  • How to operation of business

How to Become a Wholesale Car Dealer in California (with Pictures)

Buy vehicles to sell them. Wholesalers can source vehicles from a number of sources. Visit wholesale auctions in California or the surrounding states to buy larger quantities of cars. Communicate with new and used car dealers to place bids on unwanted vehicles on their property. You can also buy vehicles from other wholesalers. Look for good deals and grab them when you see one.

How to Become a Wholesale Car Dealer in California (with Pictures)

Create an online presence for your business. All business these days has to work just as well online as it does face-to-face. That means creating a reputable looking and functional website that shows your inventory and makes it easy to contact you. This website should act as an extension of your physical location. In addition, you can search for cars to buy on other wholesaler or auction websites.

How to Become a Wholesale Car Dealer in California (with Pictures)

Do business with buyers. The most important thing as a wholesaler is building and maintaining relationships with the retailers who buy from you. They want to be known as a fair negotiator who always accurately assesses vehicle quality. Even if you don't make a lot of money from some sales, that's better than losing your reputation and being unable to make any sales at all. Some wholesalers also include transport costs in the price of their cars, making the buying process easier for their customers.

How to Become a Wholesale Car Dealer in California (with Pictures)

Consider changing your license. Many wholesalers eventually turn to selling cars because there can be more money in there. Retailers also have wholesale privileges. So if you change your retail license, you can simply expand your business instead of changing it. Your dealer license can be changed for a fee of $70.

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