In California, a legitimate auto broker is a licensed dealer with an autobroker endorsement, so the check is simple: get the business name and dealer license number, look it up on DMV's Occupational License lookup, and confirm the license is active. Then make sure the broker gives you a written brokering agreement before you sign a purchase agreement or pay $100 or more, that it says in bold whether the broker gets paid by the selling dealer, and that any deposit is no more than 2.5% of the car's price.
Educational information only. This article is not legal or financial advice.
In this article
Where to find brokers
- Referrals from friends, credit unions or employers' car-buying programs
- Brokers that specialize in a brand or in hard-to-find vehicles
- Online searches, followed by the license check below every time
How to verify one
| Check | How |
|---|---|
| Active dealer license | Search the business name or license number on DMV's Occupational License lookup (Opens in new window). See How to look up a dealer license number |
| Autobroker endorsement | Ask for proof. The endorsement goes on a retail dealer license (VC §11735) |
| Written brokering agreement | Must come before you sign a purchase agreement or pay $100 or more (VC §11736(a)) |
| Fee disclosure | The agreement states your fee and, in bold, whether the broker receives a fee from the selling dealer (VC §11738) |
| Deposit | No more than 2.5% of the price, in a federally insured trust account |
Red flags
- No dealer license number, or one that doesn't come up on DMV's lookup
- Asking for a large deposit before any written agreement
- Wanting you to sign the purchase contract with the broker's own company when it's also "brokering" the deal
- Refusing to say whether the dealer pays them
- Pressure to wire money
If something goes wrong, the agreement must tell you how to contact a DMV investigator, and you can file a complaint. See How to file a claim against a dealer bond.
Frequently asked questions
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.
How much deposit can an auto broker take in California?
No more than 2.5% of the vehicle's selling price, held in a federally insured trust account.
What should a brokering agreement include?
The fee you owe, a bold statement of whether the broker gets paid by the selling dealer, the vehicle description, refund conditions and how to reach a DMV investigator.
Related questions
- What does an auto broker do?
- How do auto brokers make money?
- How to look up a dealer license number
- Back to the California Dealer License FAQ
Resources
- DMV Occupational License lookup (Opens in new window)
- California Vehicle Code §11736, autobroker rules (Opens in new window)
- California Vehicle Code §11738, brokering agreement contents (Opens in new window)
Sources: Vehicle Code §§11735, 11736 and 11738 · DMV Occupational License lookup. Verified 2026-10-16.
This article is for educational purposes only and is not legal or financial advice. California Dealer Academy doesn't recommend or endorse any broker.