Straight answers to the questions people ask before, during and after getting a California dealer license. Each answer links to a full article with the details and the Vehicle Code, DMV, CDTFA or BAR source behind it.
Educational information only. Nothing here is legal, tax or financial advice.
Jump to: Getting licensed · Selling without a license · Cost and getting started · Wholesale and no lot · Auctions · Salvage and rebuilt titles · Plates, bonds, insurance and permits · Taxes and fees · Selling and compliance · Auto brokers
Getting licensed
How do I get a dealer license in California?
Take a DMV-approved pre-licensing course, pass the DMV exam, set up your business and location, get a bond and Live Scan, and submit your application for DMV's inspection.
What do you need to get a dealer license in California?
A pre-licensing course certificate from a DMV-approved provider, a passing score on the DMV dealer exam, a business entity, a location your city and DMV approve, a surety bond, Live Scan fingerprints, a CDTFA seller's permit, and a complete DMV application packet with fees. Retail dealers also need a display area and a sign.
How hard is it to get a dealer license in California?
It's not hard if you're organized. The DMV dealer exam needs a score of 70% to pass, and most students who finish a DMV-approved course pass on the first try. The harder parts are finding a location your city and DMV will approve and submitting a complete application.
How long does it take to get a dealer license in California?
Usually 60 to 90 days from the day DMV receives your application. By law, DMV has up to 120 days to investigate a complete application under Vehicle Code 11704(b).
What is Live Scan?
Live Scan is electronic fingerprinting. A Live Scan site takes your fingerprints digitally and sends them to the California Department of Justice for a criminal record check. DMV requires it for first-time dealer and salesperson licenses.
Can a felon get a dealer license in California?
Sometimes. A record doesn't automatically disqualify you, but DMV can refuse a license for convictions related to dealer work, especially recent ones.
Is a California dealer license worth it?
It's worth it if you treat it as a business with a plan. The license fees are low, but starting the business takes thousands of dollars for insurance, software, business licenses and inventory. Success comes from buying vehicles at the right price, marketing well and staying compliant.
What does a California dealer license let you do?
Buy at dealer-only auctions, buy inventory for resale without paying sales tax, sell to other dealers (and to the public with a retail license), drive inventory on dealer plates, and issue temporary plates and DMV paperwork when you sell.
Do you need a license to be a car salesperson in California?
Yes. Anyone who sells vehicles or vehicle contracts, or supervises sales, for a dealer needs a DMV vehicle salesperson license. Apply on form OL 16S, complete Live Scan and pay $50 plus $1. The license lasts three years.
Can you be a car salesperson in California with a DUI?
Often, yes. DMV can refuse a salesperson license for a conviction, but a DUI isn't an automatic bar. Felony DUIs are decided case by case and are harder. The dealership also has to be able to insure you as a driver.
How do you look up a California dealer license number?
Use DMV's free Occupational License Lookup. Choose Vehicle Dealer and search by business name, city or ZIP code, or by the dealer's occupational license number.
Where do car dealers get their cars?
From dealer auctions, trade-ins, private sellers, other dealers, online dealer-to-dealer marketplaces and salvage auctions. Many new dealers start at auction, but buying directly from private sellers often gets a better price and more time to inspect.
Selling without a license
How many cars can you sell in California without a dealer license?
California doesn't set a number. Selling vehicles you bought and used yourself doesn't make you a dealer. Buying vehicles to resell them for profit does, and requires a dealer license even if you only do it a few times a year (Vehicle Code 285, 286(e) and 11700).
Can you flip cars without a dealer license?
No. Buying vehicles to resell for profit is dealing under the Vehicle Code.
Cost and getting started
How much does a dealer license cost in California?
The license fees are about $391 for a small wholesaler or $791 for retail, plus Live Scan. Starting the business costs far more once you add insurance, software, business licenses, a location and inventory.
Can you start a car dealership with no money?
Not with zero. Licensing alone is about $391 plus Live Scan for a small wholesaler, but business setup, insurance, software and your first car put even a lean home-office start at roughly $8,000 to $20,000 or more.
What is floor plan financing for car dealers?
A revolving credit line that pays for inventory when you buy it. You pay interest and fees while the car is in stock, make curtailment paydowns as it ages, and repay the advance when it sells.
How do independent car dealers offer customer financing?
Most use outside lenders. The dealer writes a retail installment sale contract with the buyer, submits the credit application to lenders, and assigns the approved contract to the lender, which pays the dealer and services the loan.
What does buy here pay here mean?
The dealership finances the car it sells, and the buyer makes payments to the dealer instead of a bank or finance company.
Do buy here pay here dealers report to credit bureaus?
Some do and some don't. No federal or California law requires it. A dealer that reports must follow the Fair Credit Reporting Act's accuracy and dispute rules.
How do I start a buy here pay here dealership?
It takes a retail license, plus financing contracts and collections that follow California's installment sales rules.
Wholesale and no lot
Can I get a dealer license without a lot, or work from home?
Yes, with a wholesale license. It needs an approved office but no display lot or sign, and home offices often qualify.
What does it mean when a dealer wholesales a car?
The dealer sells it to another licensed dealer or through a dealer auction instead of to a retail customer, usually because it can profit without reconditioning, the car can't easily be retailed in California, or it has sat too long.
Where can you buy wholesale cars in California?
Licensed dealers buy wholesale at dealer auctions like Manheim, ADESA and CarMax Auctions, on online platforms like ACV, OVE.com and EBlock, and from other dealers. Without a license, options are public auctions, some Copart public lots and private sellers.
Auctions
How do I get a license to buy cars at auction?
Dealer-only auctions require a dealer license, usually verified through AuctionACCESS.
What is AuctionACCESS?
The registration system most dealer-only auctions use to verify that you're a licensed dealer.
Can you buy at a car auction without a dealer license in California?
Yes, at public auctions: government surplus, tow-yard lien sales, some Copart and IAA lots, and enthusiast sites. Dealer-only auctions such as Manheim, ADESA, ACV and CarMax require a dealer license.
Can you buy from Manheim if you're not a dealer?
No. Manheim is a dealer-only wholesale marketplace, including its physical auctions, Simulcast, Manheim.com and OVE.com. You need a dealer license and registration, usually through AuctionACCESS.
Can you buy from Copart without a license in California?
Sometimes. Registered public members can bid on lots open to the public, and a Copart-approved broker can bid on more. Many salvage lots are limited to licensed dealers and dismantlers, and each listing shows who can bid.
How does Copart bidding work?
You register, fund a deposit that sets your buying power, and bid online before or during the live sale. Winners pay the bid plus Copart's fees and must pay and pick up by Copart's deadlines.
What does pure sale mean on Copart?
The vehicle sells to the highest bidder without further approval from the seller.
What's the best auction for a brand-new car dealer?
Many beginners do best on an online dealer auction, where a trained inspector writes up each car's condition and post-sale protection is available. EBlock's hybrid model, where you inspect in person and bid online, is another good start in Southern California.
Is it worth buying cars at auction as a new dealer?
Yes, if you price every car before you bid and include the fees, transport and reconditioning. Auctions are convenient, but you pay for that convenience, so buying right matters most.
How does dealer auction arbitration work?
Arbitration compares the seller's condition report, light and announcements against what a post-sale inspection finds. If an undisclosed problem qualifies under the auction's rules and you file in time, the auction can award repair costs, a price adjustment or a cancelled sale.
Where do dealer auction cars come from?
Mainly dealer trade-ins the dealer won't retail, off-lease returns, fleet and rental vehicles, and repossessions.
Can you sell your car at an auction in California?
Usually not at a dealer auction. Dealer auctions take vehicles from licensed dealers and commercial sellers. Private owners can sell privately, trade in, sell to a dealer, consign with a dealer, or sell a damaged or totaled car through a salvage auction such as Copart under its terms.
What is OVE Manheim?
OVE.com is Manheim's online wholesale vehicle marketplace for licensed dealers, with bidding, buy-now and make-an-offer options around the clock.
Who owns Manheim auto auction?
Cox Automotive. Its brands also include Autotrader, Dealertrack and Kelley Blue Book.
How do police auctions work in California?
State surplus vehicles are sold at monthly Department of General Services auctions, bid online through Bar None Auction, with viewing lots in Sacramento, Fresno and Fontana. Unclaimed towed vehicles are sold by tow yards at DMV lien sales. Both are open to the public and as-is.
How much cheaper are cars at dealer auctions?
Often less than retail, but fees, transport and reconditioning eat into the savings.
Salvage and rebuilt titles
How does a car get a salvage title in California?
Usually when an insurance company declares it a total loss. After the insurer settles with the owner, the insurer, its designee or the owner must apply for a salvage certificate within 10 days under Vehicle Code 11515.
Can you sell a car with a salvage title in California?
Yes. You can sell an unrepaired car on its salvage certificate or a repaired revived salvage car, as long as you disclose the brand. Buyers usually pay less.
Can a dealer sell a salvage title car in California?
Yes, once it's repaired and re-registered as revived salvage, with the brand disclosed and an NMVTIS warning sticker posted under Vehicle Code 11713.26. An unrepaired salvage car can only be sold to dealers, dismantlers or rebuilders.
Can you trade in a car with a salvage title in California?
Often yes, but fewer dealers will accept it and the offer will be lower. Dealers must disclose the brand to retail it, and branded cars are harder to finance and insure, so many dealers wholesale them.
Is there a rebuilder license in California?
No. California doesn't issue a separate rebuilder license. Rebuilding salvage cars for resale is dealer activity, so you need a dealer license. Buying wrecks for parts is covered by a dismantler license.
How do you sell a rebuilt title car in California?
Finish DMV's revived salvage re-registration first: brake and lamp inspection certificates, a DMV or CHP inspection, smog for most vehicles, and REG 343 with the vehicle's cost. Then disclose the revived salvage brand in writing, show the repair records, and price it below comparable clean-title cars.
How do you buy salvage cars from insurance companies in California?
Through the salvage auctions insurers sell through, mainly Copart and IAA. Licensed dealers and dismantlers get the widest access; the public can bid on some lots as registered members and on more through a broker.
Plates, bonds, insurance and permits
What does DLR mean on a license plate?
It stands for dealer. A dealer plate is issued to a licensed dealer, tied to its license number, and can be used on vehicles the dealer owns or lawfully possesses.
Can you drive with dealer plates in California?
Yes, if you qualify under 13 CCR 201.00 and the vehicle is owned or lawfully possessed by the dealer. Owners and active managers may use them for any purpose, employees only within the scope of their job, and prospective buyers for test drives of up to seven days.
Do dealerships give you license plates in California?
Yes. When a dealer sells a vehicle without California plates, it must issue temporary license plates before the car leaves the lot. Permanent plates come from DMV.
How do I get dealer plates?
Order them from DMV once you're licensed. They're $92 each per year plus county fees.
How much does a $50,000 dealer bond cost in California?
You pay a yearly premium, not $50,000. With good credit it often starts around $500 a year; weaker credit can mean several thousand dollars a year.
How do you file a claim against a car dealer bond in California?
Get the dealer's bond and surety details from DMV's Occupational Licensing Unit at (916) 229-3126, send the surety a written claim with your documents, and file a written complaint (INV 172A) with DMV Investigations. Money damages come through the surety or the courts.
What insurance does a California car dealer need?
Typically garage liability, auto liability for driving inventory, dealer's open lot coverage for physical damage to inventory, garagekeepers if you hold customers' cars, and workers' compensation once you have employees. The DMV surety bond is separate and isn't insurance.
Do you need a seller's permit to sell cars online in California?
If you're a dealer, yes. CDTFA requires motor vehicle dealers and wholesalers to hold a seller's permit, including for online sales. Registration is free. A private person selling their own car doesn't need one; the buyer pays use tax to DMV at registration.
What is a seller registration number?
In California it's your seller's permit number, the account number CDTFA issues when you register to sell. Dealers use it on resale certificates and in auction dealer packets.
Is a resale license the same as a seller's permit in California?
In everyday speech, yes. California issues a seller's permit through CDTFA; 'resale license' isn't an official name. The permit number goes on a resale certificate (CDTFA-230).
Taxes and fees
What is the sales tax on cars in California?
It's based on the address where the vehicle is registered. Private-party buyers pay it as use tax to DMV at registration.
Do you pay sales tax on a private-party car sale in California?
Yes, as use tax. The buyer pays it to DMV when registering the car, at the sales tax rate for the buyer's address, on the full purchase price.
What is California use tax on a vehicle?
It's the tax due when sales tax wasn't collected on a vehicle used in California, such as a private-party or out-of-state purchase. The rate matches the sales tax rate for the registration address, and it's usually paid at DMV.
How can you legally avoid sales tax on a used car in California?
Only through narrow exemptions: a true gift, a transfer from a parent, grandparent, child, grandchild, spouse or registered domestic partner (or a sibling when both are minors), an inheritance or court-ordered transfer, and certain military or out-of-state situations.
Does a trade-in reduce sales tax in California?
No. California taxes the full selling price, and the trade-in allowance isn't deducted. A $20,000 car with a $4,000 trade-in is taxed on $20,000.
What taxes and fees do you pay on a used car in California?
Sales or use tax at your local rate, plus DMV fees including a $76 registration fee, $34 CHP fee, 0.65% vehicle license fee, a $33–$231 Transportation Improvement Fee and a $15 transfer fee, plus smog and county fees. Dealers may add a doc fee of up to $85.
What is the vehicle license fee in California?
A value-based fee of 0.65% of the vehicle's purchase price or value, paid at registration and each renewal.
Is car sales tax deductible?
Sometimes. If you itemize, you can elect to deduct state and local sales taxes, including tax on a car, instead of state income taxes, within the SALT cap ($40,000 for most filers on 2025 returns, reduced above $500,000 of modified AGI).
Selling and compliance
What changed with the CARS Act (SB 766)?
New California dealer rules took effect October 1, 2026, including a 3-day right to cancel on used vehicles priced at $50,000 or less.
Can a dealer take a car back after you signed in California?
Only in limited cases, mainly when financing falls through, either under Civil Code 2982.9 or under the contract's terms. A dealer can't cancel a signed deal just because it changed its mind.
What is the maximum dealer doc fee in California?
$85 for dealers in DMV's electronic registration program and $70 for others, under Vehicle Code 4456.5.
Do used car dealers have to give a warranty in California?
Usually not. Dealers can sell as-is with a properly completed FTC Buyers Guide. Exceptions include buy-here-pay-here dealers, which must give at least 30 days or 1,000 miles, and dealers that give an express warranty or sell a service contract within 90 days.
How long is the California Lemon Law good for?
It covers defects while the manufacturer's warranty is in effect. A presumption applies in the first 18 months or 18,000 miles if the same problem wasn't fixed after four tries, a safety problem after two, or the car was in the shop more than 30 days.
Do you have to smog a car after you buy it in California?
Usually not. The seller must provide a valid smog certificate, good for 90 days, for most gasoline vehicles more than four model years old. Newer vehicles pay an $8 smog transfer fee instead.
What is the smog abatement fee in California?
A $20 DMV registration charge on newer vehicles that are exempt from the biennial smog check, generally those eight model years old or newer. It's paid instead of a smog inspection.
How do you register a used car bought from a private party in California?
Submit the signed title (or REG 227), the seller's smog certificate when required, an odometer disclosure and the fees, including use tax, to DMV within 10 days of the sale.
How many days do you have to notify DMV after selling a car in California?
Five days. File the Notice of Transfer and Release of Liability (REG 138) online or by mail within 5 days of the sale.
How do you sell a motorcycle in California?
Sign the title over to the buyer (or complete a REG 227), record the odometer reading, keep any personalized plates and file the Notice of Transfer and Release of Liability (REG 138) within 5 days. No smog check is needed.
What is the dealer number on a title or sale paperwork?
It's the selling dealer's DMV occupational license number. It appears on dealer sale paperwork such as the Report of Sale (REG 51) and ties the transaction to a licensed business.
When can you legally reset an odometer?
Only during a repair or replacement when the existing reading can't be kept. Federal law then requires setting it to zero and attaching a notice to the left door frame with the prior mileage and the date (49 U.S.C. 32704).
How do you become a DMV registration service in California?
Apply to DMV Occupational Licensing with form OL 601, a registration service surety bond (OL 605), an OL 29B and Live Scan fingerprints for each owner, zoning approval for your location (OL 139), a sign showing your firm name, and the application fee.
Auto brokers
How do I become an auto broker in California?
You need a retail dealer license with an autobroker endorsement.
What does an auto broker do?
An auto broker finds a car for a buyer, negotiates with the selling dealer and coordinates the paperwork and delivery. In California, only a licensed dealer with an autobroker endorsement can broker retail sales, under a written brokering agreement.
How do auto brokers make money in California?
By charging a fee for finding and negotiating a car, paid by the buyer, the selling dealer or both. Typical flat fees run about $200 to $1,000 or more. California requires a written brokering agreement that discloses the fee and any payment from the selling dealer.
How do I know if an auto broker is licensed in California?
Look up its dealer license on DMV's Occupational License lookup and confirm it holds an autobroker endorsement. California brokers must be licensed dealers with the endorsement.
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This page is for educational purposes only and is not legal, tax or financial advice. DMV makes every licensing decision. Each linked page lists its sources and the date they were verified.