Selling cars without a car lot - How to be a dealer selling cars from your home
September 2nd, 2021 by Jessica Biarbe
One of the biggest questions that we get is:
Can I sell vehicles from my house?
The short answer is yes, but probably not in the capacity in what you think. You can get your wholesale dealers license and sell vehicles from your home however there are some limitations on it.
What is a wholesale dealer license?
A wholesale dealers license means your can purchase vehicles from wherever you would like, however you are limited to selling to other licensed car dealers. The biggest element would be capitalizing on how to make your at home business profitable. Let’s talk about first on how to get there.
Planning your business is crucial to your at home wholesale dealers license and here are the few questions you need to make sure that your current property meets the requirements:
Is your property zoned to be a wholesale auto dealer?
There are many cities that do not allow wholesale dealers licenses to be operated out of the home. A few reasons for this is how many cities view car dealers to begin with. There are many wholesalers that end up bringing their work home with them and turning their house into a used car lot. This can cause neighbors to complain about the number of vehicles being stored at your home-based wholesale dealer location.
Therefore, it is worth a phone call to at least outline if your house is a good idea to start with your wholesale dealer license. If you Google “Planning department {City where your wholesale dealership is located}, you will be able to find the planning department phone number in the city you are looking to start your dealership in.
Overcoming the questions that the zoning department will have about your wholesale dealership will be some of the biggest pitfalls to overcome. Here are some tips that will help you navigate the conversation:
What kind of business are you operating?
A rookie mistake would be saying a wholesale car dealership. Most zoning officials do not know the difference between a car dealer that sells to the public and a wholesale car dealer.
Try instead “I am opening an automotive dealership that is for office use only. I buy cars from the auction and sell them from the auction. I am using my home address to satisfy the DMV requirements”
Are you parking the vehicles at your location?
This is a big issue for a lot of cities based on previous experiences with wholesale car dealers. There are many California car dealers that end up bringing their work home with them and turning their yards and streets into a used car parking lot. This can cause many of your neighbors to complain and the city could come through a revoke your ability to sell within the city.
Are you doing repairs at your house?
This is a tough question because in the eyes of the DMV, a dealer is allowed to work on their own vehicles. However, understand that if you work on a vehicle for a customer or even arrange for services to be performed, you technically need a BAR license with the state.
The city is asking if you’re going to be a mobile mechanic at your location. This rarely comes up but you want to make sure you have your responses ready
At the end of the day, for most cities in California, when you open a wholesale dealer license from your home or at a commercial location you are looking for something that requires office use only. This is an important phrase that, if you’re pursuing getting your wholesale license, you need to get use to saying.
What is office use only?
Office use only implies that you do not have an active display area but utilize commercial signs as well outside of your dealership. In a residential zone, the reason why wholesale car dealerships are permitted is because a wholesaler can get licensed without signs on the outside of their home.
The city also wants to make sure that you are not going to get a lot of customer traffic at your home as well. Customer traffic can create a parking situation in a residential area and can cause undesirable commercial traffic that most of your neighbors will complain about.
Most wholesale dealers that operate from their home end up selling most of their inventory at one of two places:
- Auto auctions
- Directly to other independent or franchise retail dealers
Once you get approval from the zoning department, you need to check to make sure your home meets DMV requirements.
The DMV has a few requirements when you operate a wholesale dealer license out of your home:
- Direct entry point from the outside
- A desk
- Locking filing cabinet
- Sellers permit on the wall near your desk from the California Tax and Fee Administration
What is a direct entry point from the outside?
Most people are probably use to the home office where most of your business endeavors are probably conducted with any other businesses that you have been apart of in the past. When you are looking to get your wholesale dealer license out of your house, DMV is much stricter with what qualifies as you office for your wholesale dealership.
The DMV wants to make sure that you that you have a direct entry point from the outside. This is qualified as any outside structure that is separate from the home. Examples of this would be a shed, granny flat, or any exterior entrance that goes directly into the office where the wholesale dealership will be conducted.
A more common location for most at home wholesale dealerships is in the garage since it is the most common element of most properties that have a direct entry point from the outside. If you are planning on using your garage, you need to make sure that either the garage door or any side doors are functional because in the picture taking process for you wholesale dealer license, you will need to present picture requirements to the DMV providing the functionality of the door.
Looking for DMV requirements for your dealer license, learn more about how to take pictures for your dealership directly.
Once you have completed these two elements of confirmation, you are ready to pursue getting your wholesale dealer license. The first step in the process is taking a pre licensing class with a California certified DMV school. Book the next class to learn all about how to be a wholesaler out of your home.
Posted in: Auto Dealer Business