Over the last few years AAMVA member jurisdictions have discussed challenges related to the licensing and regulation of wholesale vehicle dealers. Some of the challenges identified were the sale of vehicles beyond the restrictions of the license, the sale or the use of wholesale dealer licenses by private entities via the internet to individuals located in other jurisdictions, and the increased difficulty in locating transaction records, as well as the potential for increased title and odometer fraud.

Some jurisdictions issue licenses specifically to wholesale dealers, while other jurisdictions do not specifically issue a wholesale dealer license. However, a review of the laws of several jurisdictions that do license wholesale dealers reveal that, while the definition of a wholesale dealer license may vary slightly, there are many similarities. All of the definitions reviewed begin with the basic premise that a person selling vehicles to dealers must be licensed by the jurisdiction and a wholesale dealer can only sell used vehicles and only to licensed dealers and cannot engage in the retail sale of vehicles to the general public. In most jurisdictions, the laws allow wholesale dealers to purchase vehicles from anyone and also permits the sale of vehicles to licensed dealers in other jurisdictions.

Many jurisdictions require the wholesale dealer to have a physical presence within the jurisdiction where records are kept and can be examined, but do not require a vehicle display area. In some cases, the jurisdiction acknowledges this may encourage several wholesale dealers to co-locate, and therefore, they restrict the number of wholesale dealers in one physical location. Once jurisdictional law defines wholesale dealers and the transactions they are allowed to conduct, the laws, rules, and policies further define the jurisdiction’s license application process and licensing requirements. Download