How to Get a California Auto Dealer License
A California auto dealer license is required for anyone that sells more than 5 cars a year. Although there are various car dealer license types, all auto dealers in California are licensed through the California Department of Motor Vehicles (DMV).
Here is what you need to complete the application process to obtain a California auto dealer license (temporary licenses can be granted within 30 days).
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Determine Which Type of California Car Dealer License You Need
- New Auto Dealer License: Allows you to sell new and used vehicles to the public, to licensed motor vehicle dealers, and at auction.
- Used Auto Dealer License: This license permits you to sell only used cars and trucks to the public and licensed vehicle dealers.
- Wholesale Dealer License: Allows you to sell only to licensed dealers and at auction. It does not permit you to sell to the public.
- Autobroker’s Endorsement: This is an addition to a new, used or wholesale license. It allows you to provide the service of arranging, negotiating, and otherwise assisting in the purchase of a new vehicle or used vehicle for an individual in exchange for compensation.
Attend a Dealer Training Program
If you are applying for a used or wholesale auto dealer license, you must attend a 6-hour pre-licensing training program from an approved dealer education provider. Dealer education programs are taught online, but upon completion, you will have to pass an in-person test at a California DMV. The test consists of 40 multiple-choice questions, and a score of 70% is required to pass. You get 3 attempts to pass and must wait one week between sittings.
Test Fee: $16 per sitting
Obtain a Permanent Business Location
Depending on your type of license, your business location will need to:
- Have an office with direct entry from the outside, fitted with a desk, filing cabinet, and telephone, holding all records related to your business
- Obtain zoning and property use verification to ensure the business location is compliant with regulations
- Display a sign at a minimum of 2 square feet that meets all California Vehicle Code (CVC) guidelines and the CA Code of Regulations
- Meet the minimum display area size requirements outlined in the CVC auto dealer handbook
Take Photographs of the Office & Dealership
Once you have a business location, you are also required to take photographs to send in with your application. Photographs requested commonly include the car dealership, display area, office, and signage, but will vary depending on your type of license.
Check to learn which auto dealer photographs are needed for your business.
Acquire Licenses and Permit
The licenses and permits you need to acquire are:
- State Board of Equalization Resale Permit
- City and/or County Business License
- Fictitious Name License: For businesses that operate under a name other than the actual name of the owner
- Auto Repair Dealer License: For businesses offering repair services, you will have to apply with your local Bureau of Automotive Repair (BAR).
Compile the Required Documents
You’ll need to fill out the following 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)
- Statement of Information (SI 550) or Statement of Information LLC (LLC 12) filed with the Secretary of State (corporation, limited liability company, or limited liability partnership owned businesses only)
- Copy of permits and licenses (resale, fictitious name, city or county)
- 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)
Obtain Your Auto Dealer Bond
All dealers must purchase a dealer surety bond to get licensed.
Why Do I Need a California Auto Dealer Bond?
A dealer surety bond guarantees that you will fulfill your obligations as an auto dealer. It is a form of insurance required that protects the public and the State of California in the event that you default on paying your fees or fail to remit your sales tax.
How Much Does a California Auto Dealer Bond Cost?
Bond Amount Required:
- $50,000 for Retail 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)
The cost of a California auto dealer bond is a small percentage of the total bond amount. The bond cost varies depending on your financial strength, e.g. credit score.
- Fill out our online application form to obtain a free bond quote for your auto dealer license. It takes 5 minutes and you will be able to lock your rate for the next 90 days (in case you want to purchase the bond).
You can also take a look at our most frequently asked surety bond questions.
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. Learn more about what surety bonds are, and how they benefit you.
Arrange a Place of Business Inspection
Schedule an appointment with an Occupational Licensing inspector once you’ve filled out and collected all the necessary application items. The inspector will examine your place of business, including the office, the books and records, the display area, and the signs.
Submit Your Auto Dealer License Application & Fees
Once you’ve completed your New Dealer Checklist or Used and Wholesale Dealer Checklist, it’s time to submit all forms, documents, and fees to your Local Occupational Licensing Inspections Office. Note that the fees listed below are subject to change at any time.
Licensing Fee: $175 (plus $70 for each branch location)
- $88 for each dealer plate and $90 for each motorcycle plate (an additional county-specific fee may apply depending on your business location)
- $300 New Motor Vehicle Board fee per dealership location
- $100 Autobroker Endorsement fee
- $42 Fingerprint card from Occupational Licensing (only for out-of-state applicants)
- $75 Autobroker Endorsement fee
- $1 Family Support Program fee
When your auto dealer license comes up for renewal, all the above fees will once again be applicable. Additionally, you will also need to submit proof of a surety bond and proof of continuing education (with some exemptions).