The basics: How to get your wholesale dealer license in California

The new year is in full swing, and it’s no wonder that many of us are feeling an influx of energy to face new challenges and start new projects. If you are inspired to apply your entrepreneurial enthusiasm to opening a new wholesale dealership business in California, there are a few administrative and financial steps that you will have to take first.

Becoming a wholesale dealer is different from new or used auto dealers, as these businesses sell vehicles directly to the general public. As a wholesale dealer, your activity boils down only to selling to other car dealers. You can purchase the vehicles from car auctions or from other car dealers. The sales limit in California is 25 vehicles per year.

Although obtaining a wholesale dealer license in California is not a complicated process, it is good to be prepared and informed about the various steps and requirements. Read on for some useful tips on how to tackle the licensing and how to save on the surety bond requirement.

Easy basics

Naturally, the first place to start your licensing endeavor is the California Department of Motor Vehicles website. Reading carefully through the Application Check List will give you a thorough idea of the required documents and fees.

When you are confident you can meet the requirements, you can proceed with the Application for Original Occupational License and the rest of the paperwork found on the checklist.

Licensing procedure

Obtaining a wholesale dealer license in California is, of course, linked to some expenses. The first fee you will have to pay is quite high in this state. The registration fee in California is $176.

You will also have to undergo a Dealer Education Program and receive a Certificate of Completion for it. There will be fees associated with this process as well.

The licensing process includes filling in the Personal History Questionnaire and providing a copy of your Fictitious Business Name Statement. Don’t forget to check the specific requirements for the office location for wholesale dealers. This includes a rental or lease agreement for a physical space or a proof of ownership.

Getting bonded

An indispensable requirement of the licensing process is obtaining a wholesale dealer surety bond for the State of California.  You will need to supply a signed copy of the original in your application package.

California Wholesale Dealer License

If you are stumbling upon the term surety bond for the first time, you probably need some clarification. This is not insurance for your business, but instead is a protection for your clients and for the state in which you operate. The surety bond functions as a guarantee that your business will comply with all applicable state regulations. If you have more questions, please visit the California wholesale dealer bond page.

The bond price is a percentage of the surety bond amount. Although licensing expenses are firm, you can save on the surety bond by carefully selecting your surety bond agency. Most agencies quote rates based on personal and business financials as well as professional experience. Due to the large number of wholesale dealer licenses we write, JW Surety Bonds is able to approve your application based on your personal credit alone.