Owning a dealer license in California comes with some very strong advantages.
1) Licensed dealers have the ability to purchase cars from private dealer auctions at or below wholesale often with auction credit.
2) Licensed dealers have the ability to purchase wholesale vehicles directly from large new car dealerships at private dealer only closed bid sales.
3) Licensed dealers have the ability to sell as many cars as they desire. Remember, without a dealers license you are restricted in how many vehicles you may sell per year, and NONE if your desire is to make a profit.
4) Licensed dealers have the ability to use dealer plates. Owners of the dealership may drive around their inventory for business or pleasure without registering the vehicles into the dealership. This little known tax advantage is one of the the best benefits of owning a dealership.
5) Licensed dealers do not have to shop private parties when looking for a car to purchase. At a dealer only auction, dealers have hundreds of choices in the same day.
6) Licensed dealers work for themselves and no one works as hard for you as you work for yourself. The pride of owning your own dealership business is tremendous.
7) Licensed dealers rarely pay retail for goods and services are they are always free of sales tax.
8) Licensed dealers command good prices for their vehicles given the safety and compliance checks built in by the state often called the ” warranty of merchantability “.
In California there are two basic types of dealer licenses:
Retail Dealer License
Wholesale Dealer License
There is one endorsement allowed on either license as long as you post a $ 50k Bond and can post a sign:
With a retail car dealer license, you can sell cars to the anyone. You can sell cars to the public, you can sell cars to dealers, you can sell cars to auctions. Retail licensed dealers may also sell on consignment. When you have a retail license you are automatically a wholesaler as well.
With a wholesale car dealer license, you can only sell cars to dealers and auctions. Wholesale car dealers wishing to sell a car to the public need a retail licensed car dealer to ” draft ” their sale. This ensures that the vehicle is registered properly with the DMV and the correct sales taxes are paid. We offer “drafted sale ” services to our students who obtain a wholesale dealer license and insurance.
Autobrokers are independent agents that represent buyers and receive a fee. Autobrokers are legally allowed to transport and deliver vehicles. Autobrokers trades are the cream of used car acquisitions.
We always suggest a retail car dealer license with an autobroker endorsement, if possible. Zoning restrictions are stricter but there is more money in retail. Wholesale dealers turn over more cars buying right and selling them at the dealer auctions.
Retail Car Dealers & Autobrokers must post a $ 50k Bond.
Wholesalers selling 24 cars per year or less must post a $ 10k Bond
Your Car Dealer Bond
We are the only DMV Certified Car Dealer School
owned by an actual Retail Car Dealer
with an Autobroker Endorsement
Teaching quality dealer education since 1998
DLR License 35862
DMV Teaching License CCC0004