Tips on Being a Wholesale Car Dealer

Published: 14th October 2010
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Through becoming a wholesale car dealer, you can get into the automotive industry easily. This is aside from the fact that it costs much less than having a traditional brand new or second had car retail dealership. Wholesale car dealers focus in used cars and sell them chiefly to dealerships that need used cars for their showrooms.
In order to become a wholesale car dealer, you have to check licensing requirements at your area. Automotive wholesalers, also called as car brokers, are required to have a dealer’s license. You can look for licensing requirements at your state by contacting your state’s Department of Motor Vehicles, or by visiting their website. Complete all of the requirements and get one.
Next, you have to find a location for your business. Even though wholesalers may or may not be open to the public, they must acquire an established location for business. Your wholesale dealer application packet may contain a form that must bear certification from an inspector or zoning officer in your area. The form confirms that your intended location for your business is properly zoned to do transactions for used cars.
You should then purchase a surety bond. This is an insurance policy that will reimburse your creditors and suppliers in the case you unexpectedly close your business or are forced to liquidate own assets. Surety bond requirements start at ten thousand dollars, but can rise considerably depending on your state’s requirements. As what most car dealers Indianapolis has would tell you, surety bonds can be availed online, where there is a stiff struggle for your business that pulls costs downward.
After doing so, apply for a line of credit. In financing the purchase of used cars within a year, you will need to have a significant operating capital or simply, a line of credit. Wholesale car dealers in Indianapolis can apply for a floor plan line of credit, which means that vehicles bought on the line of credit are the collateral. Interest will be due after a set of days if you have not sold a vehicle yet. If you will be going to start small and wholesale just one or two cars at a time, you can simply use the income from each sale to purchase your next cars to be sold.
Lastly, after having a comprehensive inventory of your vehicles, wholesale your inventory. Once you have the cars read for sale, contact dealerships and let them know what you have in your inventory. Also, if your state allows wholesale dealers to sell to the public, post up your vehicles through and online classified ads website. Remember to target between $300 and $1,000 margin per wholesaled vehicle, depending on the price of the vehicle and your target sales. Wholesale car dealers in Indianapolis can always send back to the auction shop any unsold inventory allowing you to have your investment back.

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