Retail vs Wholesale vs Broker Dealer License- Which Dealer License is Right for You?

Before obtaining any of these 3 licenses you will need to know the differences because if you are doing things with a license that are not allowed with that license your state will either fine you, suspend your license temporarily, or possibly even revoke your dealer license. If you get a find or a license suspension, you have become a blip on the radar for your state dealer licensing office, in other words they are not going to be keeping an eye on you, so you are much more likely to be spotted for any type of violations of state law after you have become a blip on the radar. One of the best pieces of advice I can give you is to fly under the radar, you do not want to become a blip in your state dealer license offices radar, in fact it would be best if your state dealer license office does not know you exist. You do not want customers complaining to your state dealer license office and you do not want to bring attention to your dealership by breaking state laws. Do your best to maintain compliance, and obviously compliance is to follow every state law, rule, and guideline. We are a tightly regulated industry because we are a high profit industry that has seen a lot of fraud. A few folks have gotten a dealer license to run criminal enterprises, so now the laws have been tightened for us, the ethical dealers that are running a legitimate business.

Learn more at https://texasdealers.com

I have actually seen several states change their laws so a company cannot come into that state, rent a building with several offices and rent wholesale dealer licenses to out of state residents. Illinois, Missouri, Washington, Texas, Ohio, Oregon, and many other states changed their laws to specifically prevent companies from obtaining wholesale dealer licenses for out of state residences. If you are currently holding a wholesale license from another state that you do not live in, be sure to follow that states bills that are being introduced in that state’s legislature because it is a nationwide trend to ensure if you hold a dealer license in specific state, you must be a resident of that state. For awhile the state of Washington actually outlawed all wholesale licenses which put all the legitimate wholesale licensees out of business. They did revise that law later and allowed someone with a Washington dealer license to hold licenses but it no longer allows license holders to live in other states. In Ohio a company was renting 50 dealer licenses to out of state residents when the state law only allows 2 licenses in one building. The out of state dealer license company was required to shut down. There was once a company from Indiana that was renting a huge location in Missouri with about 250 licenses and was shut down by the state of Missouri.
Now, if you want to use one of these companies to obtain an out of state dealer license, in fact I think that Idaho and Wisconsin are one of the handful of states that allow out of state residents to hold a wholesale license.

The biggest advantage to a wholesale license is that you are not required to have a lot. I want you to be aware, however, there are a couple of states that require a wholesale dealer to have a lot, I am only aware of 2 states that require a wholesale dealer to have a lot but they are not the norm. Almost every states allows you to have wholesale dealer license without a lot.
So maybe a wholesale license is for you, or maybe it is not, now lets talk about a retail dealer license.

The greatest thing about obtaining a retail dealer license is that you can sell vehicles to absolutely anyone. You can sell vehicles to other dealers, you can sell vehicles to the general public, you can sell vehicles to family members, and most states will allow you to buy a vehicle at a dealer auction and keep it as your personal vehicle. You will need to pay your state’s sales tax if you want to keep the vehicle, but the great thing about this is that you will save on sales tax as well because you will normally pay sales tax only on the dealer auction purchase prices which will be thousands less than retail so you will pay lest sales tax as well. However, there are some states that require licensed dealers to buy personal vehicles at dealer auctions but must pay sales tax based on the market prices of the vehicle as per blue book for nada.

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https://www.dealercourse.com/