Basic Licensing Requirements of Dealers
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When is a Dealer License* Required?
“Only a Dealer or the Registered Owner (individual or business) of record shall sell or offer for sale a vehicle of a type required to be registered” (OL 11100 – 12217)
- Anyone related by blood, adoption, or marriage to the registered owner
- Administrators, executors, guardians or other person acting under a judgment or court order
- Trustees of a trust in which the vehicle is registered as an asset
- Public Officers in the performance of their official duties
- Attorneys on behalf of a client who is the registered owner
- Insurers selling the salvage of one of its insured’s vehicle
- Persons with written authorization from the owner and not receiving payment of any kind
*No Dealer License is required to sell motorized bicycles, mopeds, portable tow dollies, aircraft refueling vehicles, manufactured homes, campers with one axle, dune buggies or sand rails
New License Applications
The DMV requires that all Dealers provide complete and submit specific forms when they are applying for a new license or when renewing an existing license.
All Dealers must complete:
- OL 21A Original Application for Occupational License, (Part A)
- Details who will operate the Dealership
- OL 29B History Questionnaire, (Part B)
- Provides personal background history(s) on those applying
- OL 12 Application for Original Occupational License, (Part C)
- Details location, bank and requested license type
- OL 53 Authorization to Release Financial Information
- OL 902 Property Use Verification for Vehicle Dealer’s License
- Zoning verification from your City
- DMV 8016 Request for Live Scan Clearance
All Dealers must have a Surety Bond valued on their license type and provide proof:
- OL 25 New or Used Auto-Commercial Dealer ($50,000)
- OL 25B Motorcycle Dealer, Motorcycle Lessor-Retailer, All-Terrain Vehicle Dealer, or Wholesale-Only Dealer (Less Than 25 Vehicles Per Year) $10,000
Additional documents/permits Required with Application
- Evidence of successful completion of the DMV’s Vehicle Dealer Written Examination (taken with Occupational Licensing Inspector)
- A current California driver license or identification card
- The original Dealer Education Certificate of Completion
- If applying as a Corporation, a “Statement of Information (SI 550)” as filed with the Secretary of State
- If applying as a Limited Liability Company or Limited Liability Partnership, a “Statement of Information LLC (LLC 12)” as filed with the Secretary of State
- A copy of your Fictitious Name Statement (not required if your surname is included in your business name)
- A copy of your CDTFA (California Department of Tax and Fees Administration) Permit
- Photograph(s) of business location
- $175 Non-Refundable Application Fee
- $70 For each Branch Location
- $90 For each auto Dealer Plate ($92 for Motorcycle) plus County Fees that vary depending on the county where your business is located
- $100 Autobroker Endorsement Fee (only if adding Endorsement to your license)
- $1 Family Support Program Fee
- $42 For Each Person Submitting ADM 1316 Fingerprint Card (out-of-state applications only)
- $16 Examination (each retest will be an additional $16)
Dealers must renew their license prior to the expiration date, every two years and must attend an approved continuing education program of not less than four (4) hours.
Dealers may still renew the license during a “30-day grace period” after their license expiration and must pay a penalty equal to the amount of the original application.
The license will be automatically canceled on the 30th day.
Dealers should complete and submit the following to renew their license:
- Renewal Application (DMV form OL 45)
- Proof of Continuing Education
- Proof of Surety Bond ($10k or $50k as needed for your License)
Payment of Renewal Fees: (for a two-year renewal, double the following fees.)
- $125 Renewal Application
- $125 Renewal of Branch Location
- $75 Autobroker Endorsement
- $86 For each auto Dealer Plate ($88 for Motorcycle) plus County Fees that vary depending on the county where your business is located.
Office Requirements (your Place of Business)
The DMV requires that you have a “Place of Business” that is occupied either continuously or at regular periods by a Dealer where the books and records pertinent to the business are kept.
A “Dealer-Wholesale” that is only involved in the sale of vehicles between licensed Dealers must also have an office, but a display area or signage is not required
Property Use Verification
- Your business location must be in an area zoned and approved for the type of business you wish to conduct
Before signing a lease or rental agreement, check with the agency responsible for completing the Property Use Verification for Vehicle Dealers License (OL 902) to ensure appropriate property use.
Your Office must:
- Be devoted exclusively for the use of your business with entry directly from the outside
- Have a telephone, desk, and a filing cabinet
- Host all books and records pertinent to the business must be maintained at the office (320(b) CVC).
- Not less than 2 square feet and readable from at least 50 feet
- Show the Dealer’s name and address
- Be permanent, able to withstand weather conditions and erected on the exterior of the office
- Situated at the Place of Business
a sufficientsize to accommodate vehicle(s) of a type for which the dealership is licensed to sell (409.00 CA Code of Regulations)
Notices Required To Be Posted
Every dealer who displays or offers one or more used vehicles for sale at retail must post a notice (at least 8 inches high and 10 inches wide) in a place conspicuous to the public, which states the following:
“The prospective purchaser of a vehicle may, at his or her own expense and with the approval of the dealer, have the vehicle inspected by an independent third party either on or off these premises.”
Every dealer must conspicuously display a notice, not less than eight inches high and 10 inches wide, in each sales office and sales cubicle of a dealer’s established place of business where written terms of specific sale or lease transactions are discussed with prospective purchasers or lessees, and in each room of a Dealer’s established place of business where sale and lease contracts are regularly executed, which states the following:
“THERE IS NO COOLING-OFF PERIOD UNLESS YOU OBTAIN A CONTRACT CANCELLATION OPTION
- Application Requirements for Vehicle Dealers
- Used Dealer or Dealer Wholesale Only Application Checklist
- Renewal Application