All auto dealers in California are licensed through the California Department of Motor Vehicles. There are two different applications for new dealers and all other types of dealers, but application packages and checklists for both are readily available. A background check will be run for every applicant. Here’s how to get started.
Determine Which Type of License You Need:
- New or Used Commercial Auto Dealer: This license permits you to sell new or used cars and trucks to the public, as well as to licensed vehicle dealers
- Used Commercial Auto Dealer: This license permits you to sell only used cars and trucks to the public and to licensed vehicle dealers
- Wholesale Dealer: This license permits you to sell only to licensed vehicle dealers
- Autobroker: This license allows you to provide the service of arranging, negotiating, and otherwise assisting in the purchase of a new or used vehicle for an individual in exchange for compensation.
Note: You can apply for an additional autobroker endorsement with any of the first three license types.
Attend a Dealer Training Program
If you are applying for a used vehicle dealer or wholesale dealer license, you must attend a 6-hour pre-licensing training program and pass a test consisting of 40 questions. Take a look at our comprehensive California wholesale dealer license guide.
Test Fee: $16 per sitting
Obtain a Permanent Business Location
Depending on your type of license, you will need to:
- Obtain zoning and property use verification to ensure the business location is compliant with regulations.
- Include an office with direct entry from the outside, fitted with a desk, filing cabinet and telephone, holding all records related to your business
- Display a sign at a minimum of 2 square feet that meets all CVC guidelines and the CA Code of Regulations
- Meet the minimum display area size requirements outlined in the CVC auto dealer handbook
Note: Make sure to read through the full requirements to learn which location requirements apply to your business.
Once you have a business location, you should take photographs of the location, which you will need to send in with your application. Based on the type of license you are applying for, different photographs will be required.
Obtain Licenses and Permits
The licenses and permits you need to acquire are:
- Board of Equalization Resale Permit
- Board of Equalization Seller’s Permit
- City and/or County Business License
- Fictitious Occupational License: For businesses that operate under a name other than the actual name of the owner
Arrange a Place of Business Inspection
You are required to arrange an appointment with an Occupational Licensing inspector. The inspector will inspect your place of business, including the office, the books and records, the display area and the signs. For further details on the exact procedure, visit the DMV’s website.
Obtain Your Auto Dealer Bond
All dealers must purchase a bond to get licensed.
Bond Amount Required:
- $50,000 for Dealers (form OL 25)
- $10,000 for Motorcycle Dealers, Motorcycle Lessor-Retailers, All-Terrain Vehicle Dealers, or Wholesale-Only Dealer (less than 25 vehicles per year) (form OL 25B)
In lieu of one of the above surety bond forms, the following deposits may be accepted:
- Cash (forms OL 65 and OL 94)
- A passbook account assigned to DMV (forms OL 64 and OL 65)
- A certificate of deposit made payable to DMV (form OL 65)
It’s important to understand that getting an auto dealer bond is likely your best option. You can learn more about how surety bonds benefit you.
Compile the Required Documents
You can download the application checklist for both a new dealer license and used, wholesale or autobroker licenses. You’ll need to fill out all of these documents and include them with your application:
- Application for Original Occupational License, Part C (OL 12)
- Original Application for Occupational License, Part A (OL 21A)
- Authorization to Release Financial Information (OL 53)
- Application for Occupational License Personal History Questionnaire, Part B (OL29B)
- Appointment of Director as Agent for Service of Process (ADM 9050)
- Request for Live Scan Clearance (receipt) (DMV 8016)
- Certificate of Proposed Franchise (new automobile, commercial, motorcycle, all-terrain vehicle, motorhome, and recreational trailer dealers only) (OL 124)
- Photographs of business location
- Original Dealer Education Certificate of Completion, issued by the course provider (Used Auto-Commercial and Dealer-Wholesale only)
- Letter of authorization (New Trailer dealers only) from a licensed manufacturer for every vehicle line sold
- Application to join the Business Partner Automation program (New/Used Auto-Commercial only)
Submit Your Dealer License Application
Once you’ve filled out and collected all the necessary items in your checklist (including the application for Original Occupational License and the original application for Occupational License), it’s time to submit all forms and documents to a Local Occupational Licensing Inspections Office.
Licensing Fee: $175 (plus $70 for each branch location)
- $71 for each dealer plate and $73 for each motorcycle plate (varies by county)
- $300 New Motor Vehicle Board fee per dealership location
- $100 Autobroker Endorsement fee
You can check the status of your application here. Temporary licenses can be granted within 30 days.