How to Get a Wholesale Dealer License in California in 10 Easy Steps

To operate as a wholesale car dealer in California, you must obtain a license through the California Department of Motor Vehicles (DMV). Wholesale auto dealers primarily sell vehicles to other dealerships or through auctions rather than directly to the public. Before obtaining a wholesale dealer license, you need to get your auto dealer bond. The process of becoming licensed as a wholesale dealer in California involves meeting various requirements, submitting forms, and providing supporting documents.

Before applying for a wholesale car dealer license in California, it’s essential to know the exact requirements set by the California DMV. 

Here’s a detailed guide to help you through each step of obtaining your wholesale auto dealer license in California.

1. Create a California DMV Dealer License Account

Start by visiting the California Department of Motor Vehicles (DMV) website and creating an account through their online portal. This account will be used to submit your application, track its status, and upload necessary documents.

2. Complete Dealer Education Course (If Required)

• First-time applicants for a used vehicle dealer or wholesale-only dealer license may need to complete a dealer education program. Wholesale dealers are encouraged to familiarize themselves with state laws and DMV regulations, though they may not be explicitly required to take a formal training course.
• After completing the program, if required, obtain a Certificate of Completion to submit with your application. This will confirm that you have met the educational requirements.

The California DMV conveniently provides a list of approved dealer education providers so you can find one near you.

3. Establish a Compliant Business Location

• For wholesale auto dealers, a permanent office location separate from any living space is required. A display lot is not mandatory for wholesale-only dealers.
• The office must have a working telephone, an internet connection, and a desk. It must also meet local zoning laws, so be sure to provide proof of zoning compliance with your application.

You will also need to photograph the business location and submit the photos as per the DMV’s photography requirements.

4. Complete the Dealer License Application and Upload Supporting Documents

• Submit Form OL 12 (Occupational License Application) via the DMV’s online portal. You’ll need to provide the following:
  • Business name (DBA), location, ownership details, and legal structure.
  • Personal history information (Form OL 29B), criminal background check, and authorization for financial information (Form OL 53).
  • Fictitious Name Statement (DBA) if applicable, and any other necessary business-related records.
• If applicable, provide a Certificate of Completion for Dealer Education or proof of passing the used dealer test.
• Statement of Information (Form SI 550) for corporations, limited liability companies, or limited partnerships.

5. Obtain a Surety Bond

• A $10,000 surety bond (Form OL 25) is required for wholesale auto dealers. This bond ensures that you comply with state regulations and protects consumers.
• If you sell fewer than 25 vehicles per year, you may qualify for a smaller bond (Forms OL 25B or OL 25E), depending on your business volume.

6. Obtain a Resale Permit

If you plan to purchase vehicles for resale, you must obtain a resale permit from the California State Board of Equalization. This permit is required to collect sales tax on vehicles you sell and ensures compliance with tax laws.

7. Submit Fingerprints for Background Check

• Complete Form DMV 8016 (Request for Live Scan Service) to undergo a fingerprint background check as part of the licensing process. This applies to all owners, partners, and anyone listed on the application.
• Out-of-state applicants will need to complete additional fingerprint forms (Form ADM 1316).
• Fingerprints must be submitted to the California Department of Justice for a criminal background check.

8. Register Your Business Name (If Applicable)

If your dealership is operating under a name other than the legal business name, file a Fictitious Name Statement (DBA) with your local county office.

9. Pay the Application Fees

• There are various fees associated with submitting your application, including:
  • $175 non-refundable application fee
  • $1 family support program fee
  • $70 fee for each branch location (if applicable)
  • $92 fee for each dealer plate (plus applicable county fees)
  • $300 fee for new motor vehicle dealers (if applicable)
  • $100 auto broker endorsement fee (if applicable)
  • $16 examination fee (if you need to retake the dealer exam)

Be sure to check the California DMV website for the latest fee amounts and ensure your payment is submitted along with your application.

10. Schedule an Inspection

• After the DMV processes your application, you will be instructed to schedule an inspection of your business location.
• The inspection will verify:
  • Your business office, ensuring it meets all regulatory requirements.
  • A display area (if applicable), ensuring it can physically accommodate vehicles for sale.
  • Signs and other requirements must be visible and meet DMV standards.
• For wholesale-only dealers, the display area is not mandatory, but the office must still meet all regulatory requirements.

Once your application and supporting documents are reviewed and the inspection is complete, you’ll receive approval for your wholesale dealer license.

The license is typically valid for two years, and you will need to renew it before it expires.

Important Information for California Dealers

• Continuing Education Requirements (Effective January 2025)

California mandates that first-time dealers complete a six-hour pre-licensing training course approved by the DMV before obtaining a dealer license. This course covers the legal aspects of the auto industry and the steps to becoming a licensed dealer. ​

• Timely Submission of Sales Documentation (Ongoing Requirement)

California law requires that vehicle registration and ownership transfer applications be submitted within 30 days of a sale to avoid fines and ensure consumer satisfaction. This measure has been in place to maintain consumer protection and smooth dealer transactions. ​

• Annual License Renewal (Ongoing Requirement)

California auto dealer licenses are valid for one year, necessitating annual renewals. Dealers receive a notice 90 days before expiration. Renewal involves submitting the Renewal Application Form OL 45 and paying associated fees.

• Proper Use of Dealer Plates 

California law prohibits dealers from loaning dealer license plates to unauthorized individuals. Any changes in dealership location or the opening of a branch office must be reported to the DMV. This rule ensures that dealer plates are used solely for business-related activities.

Frequently Asked Questions

Can I operate as a wholesale car dealer without a California driver’s license?

The California DMV requires that all dealers, including wholesale auto dealers, hold a valid California driver’s license to operate legally. 

How long does it take to get a wholesale auto dealer license in California?

The time frame of 30 to 60 days is consistent with the general application process, assuming all documents are submitted promptly. The live scan fingerprinting process may indeed add some time, according to the DMV’s procedure

Can I sell vehicles directly to the public as a wholesale car dealer in California?

Wholesale auto dealers in California can only sell to other licensed dealerships or through authorized vehicle auctions, not directly to the public. If you wish to sell directly to consumers, you would need a retail license.

To maintain a wholesale dealer license, what is the minimum number of vehicles I must sell annually?

While there is no strict minimum, if you sell fewer than 25 vehicles annually, you may qualify for a smaller bond amount or a different licensing category (Form OL 25B), as you mentioned. This is in line with the DMV’s guidelines for smaller operations.

How do I renew my wholesale car dealer license in California?

Wholesale auto dealer licenses in California must be renewed every two years. The renewal process involves submitting the Renewal Application Form OL 45 and updating the necessary documents, which aligns with the DMV’s renewal instructions.