In 2022, California car dealerships brought in a total of $73.5 billion in sales—the highest combined revenue of any state . Getting a California car auction license is one way to capture a piece of that state’s booming automotive market—but with fewer start-up costs compared to starting a car dealership.
A car auction license allows you to sell cars to other dealers, the general public, or both. Plus, if you go with a wholesale dealer license, you can skip the hefty cost of an office and car lot.
Keep reading to learn what you need to get a California car auction license to buy and sell auctioned cars. We guide you through vehicle dealer license types, auto dealer bonds, required business licenses, and more.
What Type of License Do You Need to Buy and Sell Cars in Auctions?
A California car dealer license is required to auction cars. There are two main options, but unless you also plan on running a new car dealership, a Used Car Dealer License is the most common for buying and selling at auctions.
New Vehicle Dealer License: A retail dealer license for selling new and pre-owned vehicles.
Used Car Dealer License: For selling used vehicles to the general public and/or dealers. If you apply under this category as a wholesale-only dealer, then you may only sell to registered dealers—not the general public.
Requirements for Obtaining a Car Auction License in California
Complete a Car Dealer Training Course
Completion of a California DMV-approved training course is a licensing requirement for any dealer planning to sell used cars. This program runs approximately 4 - 6 hours and is available both online and in-person through numerous training schools. There are scheduled sessions or courses that you can take at your own pace. Check the DMV’s list of approved pre-licensing courses.
Pass the DMV Occupational Licensing Exam
This sit-down test is taken at your closest DMV branch location. It involves 40 multiple-choice questions regarding selling cars in California—the dealer training course covers all this information. You need 70% to pass and are granted 3 attempts (waiting one week between sittings).
Step-by-Step Guide to Getting a California Car Auction License
After you complete your dealer education course and pass the DMV exam, you’re well on your way to getting your license. Below we outline what to expect from the next steps of the application process.
Step 1: Obtain License and Permits
You will need to apply for certain licenses and permits to send in with your car dealer application.
- Board of Equalization Resale Permit: File an application for a Seller’s Permit through local Board of Equalization offices.
- Business License (City and or County): You will need to get a business license for the city and/or county where you plan to conduct business.
- Fictitious Name Statement: Required if your business operates under a name that does not include your surname.
- California Department of Tax and Fee Administration (CDTFA) Resale Permit: Required to collect and remit sales tax.
Step 2: Prep Your Business Location and Take Photos
While wholesale-only dealers don’t need a specific business location—they can often work out of their homes—all other California auto auctioneers and dealers must have a physical location that meets specific requirements. These include:
- Adhering to all city and county zoning laws
- A display area with clear and permanent business signage
- A place to hold all books and records related to the business
- A separate entrance when the business is attached to a house
Once your location meets all the requirements, you will need to take photos to include in your application. You can find exactly what photos are needed on the California Department of Motor Vehicles’ website.
Step 3: Get a California Auto Dealer Bond
All motor vehicle dealer license applicants operating in the State of California are required to get an auto dealer bond. This bond ensures that dealers operate ethically, adhering to the rules and laws surrounding the profession.
How to Get an Auto Dealer Bond
Getting a California auto dealer bond is quick and easy—you can apply online in minutes for a free bond quote. From there, you can process your payment online to obtain your bond A total California auto dealer bond amount must be $50,000—with the applicant paying, on average, 1% - 5% of that amount. Therefore, an applicant with good credit can expect to pay $500 - $2,500.
Have a low credit score? In many cases, you can still secure a surety bond. Read our guide to getting a surety bond with bad credit.
Step 4: Get Your Auto Dealer/Auction License Application Forms
Dealer application packets are available on the California DMV website. They can be filled out online or printed and completed in ink.
Step 5: Fill Out Your Forms & Submit
A variety of forms need to be filled out in your application packet. With them, you must also include:
- A Copy of Your Occupational License
- A Copy of Dealer Education Certificate of Completion
- Photos of Business Location
- Request for Live Scan Fingerprint Service or a Fingerprint Card
- A Copy of Board of Equalization Resale Permit
- A Copy of Your Business Licenses
- Fictitious Name Statement
- A Copy of CDTFA Resale Permit
- A background check
Double-check that you have everything needed for your application before you submit it with your license fees.
Step 6: Schedule a DMV Inspector
Once you submit your California dealer license application, the last step is to schedule a DMV inspector to come view your business location (this does not apply to wholesale-only dealers).
How Much Does It Cost to Get an Auction License in California?
- $80+ - Dealer Education Course Fee
- $16 - DMV Test Fee
- $175 - Non-Refundable Application Fee
- $42 - Fingerprint Card (out-of-state applicants ONLY)
- $1 - Family Support Program Fee
- $70 - Per Branch Location
- $90 - Per Dealer Plate
- $92 - Per Motorcycle Plate
- $100 - Autobroker Endorsement Fee (Not required, but available for non-wholesale dealers)
- $300 - New Motor Vehicle Board Fee per Dealership Location (Only for those also running a dealership)
FAQ
How Long Does It Take to Obtain a Car Auction License in California?
Temporary licenses can be granted within 30 days of submitting your application.
Can I Operate a Car Auction Business Without a License in California?
No. California and all other states require those that run car auction businesses to hold a valid car dealer license.
What Happens if My Car Auction License is Denied?
If your car auction license is denied, you can re-apply in most cases. However, your application fee is non-refundable and you must pay again to re-submit.
How Often Do I Need to Renew My Car Auction License in California?
A car auction license in California needs to be renewed annually. Those designated as dealer-wholesale only must also attend an approved continuing education program every two years to renew their license.
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