What is the main difference between a retail and wholesale dealer?

The distinction between retail and wholesale dealers primarily lies in their target customer base and selling practices. A retail dealer sells vehicles directly to end consumers or the general public. This type of dealership typically maintains a physical lot where customers can examine and test drive cars, and they engage in advertising to attract individual buyers.

In contrast, a wholesale dealer operates primarily by selling vehicles to other dealers rather than to the public. This model is based on business-to-business transactions, allowing wholesale dealers to function at a different scale and often without a showroom accessible to consumers. They may source inventory from various auctions or fleet sales and then sell it to retail dealerships that will later sell to consumers.

The other options do not accurately capture the primary distinction between the two types of dealerships. Operating hours and tax rates are not defining features of the retail versus wholesale distinction. Additionally, while some wholesale dealers may focus on used cars, the major differentiator is how and to whom they sell.