Guide to Become an Autobroker in California

Guide to Become an Autobroker in California

March 6th, 2024 by Garrett Eddings

If you have a passion for cars and want to embark on a career in the automotive industry, becoming an autobroker in the state of California can be a lucrative and fulfilling option. Autobrokers act as intermediaries between car buyers and sellers, facilitating the sale and purchase of vehicles. In this article, we will delve into the process of becoming an autobroker in California, explore the advantages and disadvantages of this profession, and shed light on how auto brokers make money.

How to Become an Autobroker in California

Auto broker license computer with paperwork on desk
  1. Meet Eligibility Requirements: Before you can embark on your journey to become an autobroker in California, you must meet certain eligibility criteria. You need to be at least 18 years old and have a valid California driver's license. Additionally, you should have a clean criminal record.
  2. Complete the Required Education: California law mandates that aspiring autobrokers complete a minimum of 6 hours of pre-licensing education from a state-approved provider. This education covers essential topics such as automotive laws, regulations, and ethical practices.
    Important to note that an Autobroker is an endorsement of a retail license so you’ll need to get your retail license and add the Autobroker endorsement on.
  3. Secure a Business Location: Autobrokers are required to have a physical office location to conduct their business. The location must meet specific requirements, including zoning regulations and office hours. Ensure that your office is in compliance with all relevant laws and regulations.
  4. Obtain an Autobroker License: To operate as an autobroker in California, you must apply for and obtain an autobroker license from the California Department of Motor Vehicles (DMV). This process involves submitting an application, paying a fee, and passing a background check. Be prepared to provide all necessary documentation and comply with any additional requirements as specified by the DMV.
  5. Secure a Surety Bond: Autobrokers are required to obtain a $50,000 surety bond to protect consumers from fraudulent activities. You'll need to work with a bonding company to secure this bond.
  6. Complete the Application Process: Once you've met all the prerequisites, you can submit your autobroker license application to the DMV. Be prepared for a waiting period while your application is processed and reviewed.
  7. Pass a Criminal Background Check: The DMV will conduct a thorough criminal background check as part of the licensing process. Any criminal history may affect your eligibility.
  8. Pay the Necessary Fees: Be prepared to pay various fees, including the application fee, license fee, and fingerprint processing fee. These fees can vary, so check with the DMV for the most up- to-date information.
  9. Maintain Compliance: Once licensed, it's crucial to stay informed about any changes in California's automotive laws and regulations. Compliance is key to operating successfully and ethically as an autobroker.

Advantages and Disadvantages of Being an Autobroker


  • Profit Potential: Autobrokers earn commissions on every successful transaction. With the right skills and network, you can generate a substantial income.
  • Flexibility: Autobrokers often have flexible work schedules and can choose their client base and niche within the market.
  • Networking: This profession offers the opportunity to build strong relationships with car dealerships, wholesalers, and buyers.


  • Licensing and Regulation: The process of becoming a licensed autobroker can be complex and involves significant paperwork, fees, and background checks.
  • Competition: The automotive brokerage industry can be highly competitive, and success may take time and effort to achieve.
  • Liability: Autobrokers are responsible for ensuring the legality of vehicle transactions, which can be legally and financially risky if not done correctly.

How Autobrokers Make Money

Autobrokers primarily make money through commissions earned from facilitating car transactions. Here's a breakdown of how they typically earn their income:

  • Buyer's Commission: Autobrokers charge a percentage or a flat fee from the buyer for their services in locating, inspecting, and negotiating the purchase of a vehicle.
  • Seller's Commission: Autobrokers can also earn a commission from the seller, typically for listing and marketing their vehicles or finding buyers for their inventory.
  • Dealer Relationships: Building strong relationships with dealerships allows autobrokers to access exclusive deals and potentially earn a commission on each successful transaction.
  • Add-On Services: Some autobrokers offer additional services such as financing assistance, vehicle inspections, and warranty packages, which can generate extra income.
  • Volume-Based Earnings: Autobrokers who facilitate a high volume of transactions can increase their overall income, as commissions accumulate with each sale.

In conclusion, becoming an autobroker in California is an attainable and potentially rewarding career path for those interested in the automotive industry. While it involves meeting stringent licensing requirements, the opportunities for financial success and flexibility in this field are significant. However, it's crucial to be aware of the responsibilities, competition, and potential risks associated with being an autobroker. If you're passionate about cars and dedicated to ethical business practices, this profession may be a perfect fit for you.

Posted in: Education