California doesn't set a number. What matters is why you bought the car, not how many you sell. Selling vehicles you bought and used yourself doesn't make you a dealer. Buying vehicles in order to resell them for a profit does, and the Vehicle Code requires a dealer license for that, even if you only do it a few times a year.
Educational information only. This article is not legal or financial advice.
In this article
- What California law says
- Where the "number of cars" idea comes from
- Which side of the line you're on
- What happens if you sell without a license
- Legal ways to sell more cars
- From experience
- Frequently asked questions
What California law says
Three sections of the California Vehicle Code answer this question.
1. Who counts as a dealer: Vehicle Code §285. A dealer is anyone who, "for commission, money, or other thing of value, sells, exchanges, buys, or offers for sale" a vehicle subject to registration, or who "is engaged wholly or in part in the business of selling vehicles," whether or not they own the vehicles. Nothing in §285 sets a minimum number of sales.
2. Who doesn't count: Vehicle Code §286(e). The law excludes people "not engaged in the purchase or sale of vehicles as a business" who sell a vehicle "acquired and used in good faith, for their own personal use, or for use in their business, and not for the purpose of avoiding the provisions of this code." That exclusion has three conditions:
- You're not in the business of buying and selling vehicles.
- You acquired and used the vehicle for yourself or your business.
- The sale isn't a way around the Vehicle Code.
A car bought to flip fails the second condition, because it was never acquired for your own use.
3. The license requirement: Vehicle Code §11700. "No person shall act as a dealer... without having first been issued a license" or a temporary permit from DMV.
Put together: once you buy vehicles to resell them, you're acting as a dealer, and the count doesn't change that.
Where the "number of cars" idea comes from
Search online and you'll find rules of thumb that name a number of cars per year. Some other states do write a number into their dealer laws, and that's likely where the idea spreads from. California's Vehicle Code has no such number. A single car bought to resell can count as dealing, and someone who sells several of their own family cars in a year can still be a private seller.
Which side of the line you're on
| Situation | Dealer license needed? | Why |
|---|---|---|
| Selling the car you've been driving | No | Acquired and used for personal use (§286(e)) |
| Selling a family car or a work truck you used | No | Same exclusion |
| Selling two of your own cars in a year because you upgraded | No | Count doesn't matter; you used them yourself |
| Buying a car on Facebook Marketplace to fix up and resell | Yes | Acquired to resell for profit (§285) |
| Buying at a public or salvage auction to resell | Yes | Same |
| Selling cars for friends or family for a fee | Yes | Selling "for commission, money, or other thing of value" (§285) |
| Inheriting a car and selling it | Generally no | Not bought to resell; but get the title into the estate or heir's name properly |
What happens if you sell without a license
DMV actively looks for unlicensed dealers, often called "curbstoners," who pose as private sellers. In one statewide sting, DMV issued 139 citations to unlicensed dealers and towed vehicles (CBS Sacramento, 2012 (Opens in new window)). The report describes curbstoners buying cheap cars from private parties and salvage yards, then advertising them on Craigslist and similar sites under different seller names with the same phone number.
Beyond a citation, dealing without a license leaves you with:
- No legal standing to buy at dealer auctions or buy for resale tax-free
- Exposure to buyer claims, with no bond or dealer protections behind the sale
- A record that can come up later if you apply for a dealer license. DMV's application asks about your prior licenses and convictions.
Legal ways to sell more cars
| Option | Best for | Cost to start |
|---|---|---|
| Wholesale dealer license | Buying at auction and selling to other dealers. No lot or sign needed | License fees about $391 plus Live Scan; a lean start with one car often runs $8,000 to $20,000+ |
| Retail dealer license | Selling to the public, including online | License fees about $791 plus Live Scan; a small office-based dealer often needs $25,000 to $50,000 |
| Consigning with a licensed dealer | Selling a car you own through a dealer who handles the sale | The dealer's consignment fee |
Compare them side by side: license type comparison · dealer license cost.
From experience
Garrett Eddings, founder of California Dealer Academy (professional opinion, not legal advice): A lot of people start by flipping cars on Facebook Marketplace or buying through an auction broker. DMV Occupational Licensing's position is that buying and selling vehicles with the intent to make a profit requires a dealer license. Not that we're encouraging that by any stretch of the imagination: if you're doing it more than once, get licensed. A wholesale license is the cheapest way in, but selling to the public takes a retail license.
Frequently asked questions
Is there a set number of cars you can sell in California before you need a license?
No. The California Vehicle Code has no numeric limit. What matters is whether you bought the vehicles to resell them.
Can I sell my own cars on Facebook Marketplace without a license?
Yes, if they're cars you bought and used yourself. Listing many cars, or cars you bought to resell, is dealing and needs a license.
Can I sell cars for my friends and family?
Not for a fee without a license. Selling vehicles "for commission, money, or other thing of value" is dealer activity under Vehicle Code §285.
What's the cheapest way to flip cars legally?
A wholesale-only license. The license fees are about $391 plus Live Scan, but plan on several thousand dollars more for business setup, insurance, software and your first car. It covers buying at dealer auctions and selling to other dealers; selling to the public requires a retail license.
Related questions
- Can you flip cars without a dealer license?
- Can you buy at a car auction without a dealer license?
- Do you need a seller's permit to sell cars online?
- How hard is it to get a dealer license in California?
- Back to the California Dealer License FAQ
Next step: Start the 6-hour DMV-approved course for $99
Resources
- California Vehicle Code §285, dealer definition (Opens in new window)
- California Vehicle Code §286, exclusions (Opens in new window)
- California Vehicle Code §11700, license required (Opens in new window)
- California DMV: Vehicle Dealer License (Opens in new window)
- California Legislative Information (official code text) (Opens in new window)
Sources: Vehicle Code §§285, 286 and 11700 (linked above) · CBS Sacramento, "DMV Sting Issues 139 Citations to Unlicensed Car Dealers" (Opens in new window) (May 12, 2012). Verified 2026-10-16.
This article is for educational purposes only and is not legal or financial advice. California Dealer Academy is a DMV-approved education provider, not a law firm. Whether a particular sale makes you a dealer depends on the facts; for your situation, contact DMV Occupational Licensing or a licensed California attorney. The instructor note reflects one instructor's professional experience and opinion.