How to Become a Wholesale Car Dealer

  Reviewed by: Jayne Thompson, LLB, LLM
  Written by: Andra Picincu      Updated October 27, 2018
Used car wholesalers provide dealerships with important inventory

In this day and age, owning a car is no longer a luxury. Between September 2017 and September 2018, 17.55 million vehicles were sold in the U.S. alone. Industry leaders, such as Ford, Toyota and Audi, continue to experience record sales. Toyota, for example, sold over 178,500 cars in the United States in September 2018. Car wholesalers and dealers continue to thrive year after year. If you're thinking about starting your own business in this industry, check the legal requirements for selling wholesale cars in your state and get licensed.

Car Wholesalers Differ From Auto Dealers

Car wholesalers sell vehicles only to other auto dealers, not to the general public. Their income depends on the number of sales and other factors, such as the brands provided and whether they sell new or used cars. The average car dealer salary is approximately $73,000 per year.

As a wholesale car dealer, you can purchase vehicles from other dealerships and auctions. In general, those who work in this industry buy and sell new, off-lease or used cars. Sometimes, they act as brokers between two dealers without actually storing or displaying the vehicle. For example, car wholesalers can sell used vehicles to a dealership like Richard Catena Auto, a company located in Teterboro, NJ. R Catena will display the cars on its website and in-store so that customers can purchase them individually. The wholesale car dealer may also purchase used vehicles from Richard Catena Auto and then sell them to another dealership.

Get Your Car Wholesalers License

Once you decide to start a wholesale car dealership, check with your state’s department of motor vehicles and get a license. Every state has different regulations concerning this business model. Arizona, for example, provides two types of wholesale dealer licenses: wholesale dealer and wholesale auction dealer. Wholesale dealers are allowed to operate from their home residences and can sell only to other licensed dealers. Wholesale auction dealers cannot buy, sell or own the cars they auction; they can only make wholesale transactions.

For example, to obtain a license in Arizona, access the state's DMV website and fill out the form available online. Submit a fingerprint card with your application. The card can be obtained from local law enforcement agencies. Next, purchase an auto dealer bond and send it along with your application by mail to the DMV department in Phoenix, Arizona, with the applicable fee.

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Find a Location

After you get a license, rent or buy space for your car dealership. Depending on your location, you may be able to register your home residence as your place of business. Some states require car wholesalers to meet certain criteria regarding vehicle storage, so check with your local zoning authority to ensure you're compliant.

Buy the Right Stock

Most wholesale dealers purchase vehicles at auctions. Go online and search for auctions in your area or close by. You may be able to place bids over the internet without the need to visit a physical location. Before getting started, make sure you have a good understanding of the market so you can get a fair price.

Promote Your Business

Connect with local dealers and let them know about your services. Consider setting up a website to promote your business and display your inventory. Attend events where you could meet other dealers. Place advertisements online and sign up on industry-related business directories to gain exposure for your wholesale car dealership.

About the Author

Andra Picincu is a digital marketing consultant with over 10 years of experience. She works closely with small businesses and large organizations alike to help them grow and increase brand awareness. She holds a BA in Marketing and International Business and a BA in Psychology. Over the past decade, she has turned her passion for marketing and writing into a successful business with an international audience. Current and former clients include The HOTH, Bisnode Sverige, Nutracelle, CLICK - The Coffee Lover's Protein Drink, InstaCuppa, Marketgoo, GoHarvey, Internet Brands, and more. In her daily life, Ms. Picincu provides digital marketing consulting and copywriting services. Her goal is to help businesses understand and reach their target audience in new, creative ways.

Photo Credits

  • yellow car, a honda japanese sport car model image by alma_sacra from Fotolia.com
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