Vehicle Industry Registration Procedures Manual

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Section 10 of 38

Chapter 9: Wholesale Report of Sale

9.025 New Vehicle Wholesale

A franchised new vehicle dealer may wholesale a new vehicle to another franchised dealer. The fees are based on the first retail buyer’s purchase price.

  • A dealer cannot advertise for sale, sell, or purchase for resale, any new vehicle of a line-make for which the dealer does not hold a franchise. (VC §11713.1)
  • If a broker obtains a new vehicle from a franchised dealer and the vehicle is subsequently sold through a non-franchised dealer to a retail buyer, the transaction is handled similar to a used vehicle sale.
    • A Registration of New Vehicle (REG 397) form is not completed.

Exceptions (VC §11713.1[f, 2])

  • A mobile home.
  • A recreational vehicle (motor home, travel trailer, or camping trailer) as defined in Health and Safety Code (H&SC) §18010.
  • A commercial coach as defined in H&SC §18001.8.
  • An off-highway motor vehicle (OHV) subject to OHV identification.
  • A commercial vehicle with a gross vehicle weight (GVW) rating of more than 10,000 pounds.
  • A manufactured home.
  • A new vehicle that will be substantially altered or modified by a converter prior to sale.
  • A vehicle purchased for export and exported outside the territorial limits of the United States without being registered by DMV.

Use the following chart for wholesale vehicles.

For SalesThen Submit
Between franchised new vehicle dealers.
A Wholesale Report of Sale (REG 396) is not
required for sales between dealers of the same franchise.		A REG 397 from the second dealer to the retail buyer and all fees due.
The first dealer must submit a Notice of Transfer and Release of Liability (REG 138) form.
Between a franchised and nonfranchised or used vehicle dealer, if the vehicle is one listed above as an exception.A REG 397 from the franchised dealer with bill(s) of sale necessary to complete the chain of ownership.

Application for Title or Registration (REG 343) completed and signed by the new retail buyer. Enter the cost to the retail buyer in the certificate of cost or value section.

Report of Sale–Used Vehicle (REG 51) from the dealer retailing the vehicle.

Statement of Facts (REG 256) from the retailing franchised dealer stating the vehicle was new when sold to the buyer.
From a licensed wholesaler (broker) to a nonfranchised dealer.A REG 343 completed and signed. Enter the cost to the retail buyer in the certificate of cost or value section, one of the following:

– Manufacturer’s Statement of Origin properly endorsed to the dealer.
– Certified copy of the factory invoice with bill(s) of sale as needed for chain of ownership.

A REG 51 from the dealer retailing the vehicle.

A REG 256 from the retailing franchised dealer stating the vehicle was new when sold to the buyer.

A vehicle verification (required because a REG 397 from the franchised dealer is not submitted with the application).

A Smog certification, if applicable (required because a REG 397 is not being submitted, and, therefore, no compliance certification is being signed).