Delivery of the vehicle to the buyer MUST occur at the sellers licensed location. Some wholesalers will buy seasoned stock ( vehicles which are front line ready on a retailers lot but approaching 60 days in inventory ) and swap them out for vehicles freshly obtained. This allows the used car sales manager to restart the clock ON THAT SEASONED STOCK. These deals are often done book for book, the wholesaler ends up with added value.

In a front line ready car the wholesaler can sell to another dealer, but it will often take a series of these book for book trades before you can actually see profits. Many small used car lots do not have the time to go to auction. A good wholesaler can stock these smaller lots and make a small profit on each car.

A WHOLESALER CAN NEVER CONSIGN A VEHICLE TO ANOTHER DEALER. The wholesale license is a good starting place for the beginner; lesser bond, easier zoning and access to the market. Dealer plates and insurance are included in the wholesale package but as a wholesaler one can only buy and sell within the industry. That means as a wholesaler you can sell only to other dealers, there is no buying off the street. If and when a wholesaler has a vehicle to sell to the public he/she may draft that sale thought a licensed retailer, this is call this a drafted sale. A drafted sale creates liability for the retailer. Typical draft fee is $ 500.

We advise the following: no loss selling ( wholesaler must sell higher than acquisition cost ), smog safety and verification provided by wholesaler, wholesaler as contact person on the buyers guide, statement from wholesaler assuming all liability if customer is not happy. Then the retailer collects and pays all taxes and fees, and sends the documents to DMV for processing.

Wholesale dealership is also a good model for any car collector. Because there is no registration and sales tax, you get dealer plates and one blanket insurance policy.

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