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Guide

Wholesale vs retail: the two license paths

Every California dealer license starts with one fork: sell to the public, or sell only to other dealers. The choice changes your bond, your premises, your paperwork load, and your whole business model — and it is the first decision in the licensing path, because everything downstream inherits it.

Side by side

RetailWholesale-only
Who you can sell toAnyone — the public, and other dealersLicensed dealers only, never the public
Surety bond$50,000$50,000 — or $10,000 if you sell fewer than 25 vehicles a year (the OL 56 tier)
PremisesOffice plus a display lot that passes inspectionA real office; no public display lot required
Education6-hour pre-license course + exam; 4-hour CE every renewalSame course and exam; wholesale-only dealers under 50 vehicles a year are exempt from renewal CE
Where you buyDealer auctions, trade-ins, private partiesDealer auctions are the whole business — see the auction directory
Paperwork per saleFull retail stack: contract, disclosures, Buyers Guide, smog, sales taxDealer-to-dealer transfers; no retail contract stack, no consumer disclosures

How to choose

Choose retail if…

your profit comes from the public: a lot, listings, financing, repeat local customers. Retail also covers wholesale activity — a retail dealer can always sell dealer-to-dealer — so retail is the flexible license, at the price of the display premises and the full consumer-compliance stack.

Choose wholesale if…

your profit comes from moving cars between dealers: buying right at auction and placing units with retail lots. Lower premises burden, no consumer paperwork, and — under 25 vehicles a year — the $10,000 bond tier. Many full-time auction buyers run exactly this model.

Two cautions. First, the wholesale volume tiers are real lines, not vibes: selling your 25th vehicle in a year on the $10,000 bond tier without upgrading the bond puts the license itself at risk — track your count. Second, "wholesale" is not a loophole for selling to the public without retail duties: one public sale on a wholesale-only license is unlicensed retail selling. If your model might touch the public, license retail from the start.

Either way the front of the path is identical: the same 6-hour course (planned launch pricing $125), the same 40-question exam, the same name-exactness discipline across entity, DBA, and bond — our Template Kit and Guided Setup build the packet for both paths.

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