To get a California dealer license: choose your license type, complete the 6-hour DMV-approved pre-licensing course ($99 self-paced online), form your business, secure a compliant location, obtain your $50,000 surety bond and insurance, submit the DMV application ($175 fee), pass inspection, and enroll with auctions. Annual bond premium starts around $500 depending on credit. Plan on 45–90 days total.
California recognizes six main dealer license categories. Most first-time dealers start with retail (sell to the public) or wholesale (sell only to other dealers). The autobroker endorsement adds purchase-assistance authority to a retail license. Motorcycle and dismantler licenses are specialized. Lessor-retailer covers lease-to-own arrangements. Your choice determines your bond amount, location requirements, and who you can sell to.
The table below covers the six main license categories. Bond amounts are from California Vehicle Code §11710:
| License Type | Who You May Sell To | Lot Required | Bond Tier | Typical Use Case |
|---|---|---|---|---|
| Retail | Public + dealers | Yes : display lot required | $50,000 (OL 25) | Selling directly to consumers |
| Wholesale | Licensed dealers only | No display lot; office space may suffice | $10,000 (OL 25 B) <25/yr; $50,000 (OL 25) 25+/yr | Sourcing at auction, B2B flipping |
| Autobroker Endorsement | Assists buyers; cannot sell inventory | No : rides on base retail license | $50,000 (OL 25) | Fee-based purchase assistance |
| Motorcycle / ATV | Public + dealers | Yes | $10,000 (OL 25 B) | Powersports-only dealers |
| Dismantler / Recycler | Licensed dealers + public (parts) | Yes | - | Salvage, dismantling, parts resale |
| Lessor-Retailer | Lessees (lease-to-own) | Yes | - | Lease/rental-to-own arrangements |
Wholesale-only dealers at or above 25 vehicles per year may apply on Form OL 56 for DMV permission to maintain the $10,000 bond. Written DMV approval is required.
California permits a $50,000 cash deposit filed with DMV in lieu of a surety bond.
The bond must remain at full value. A claim that reduces it below the required amount results in automatic license suspension until restored.
Bond data verified August 3, 2026 | Source: California Vehicle Code §11710
California law requires all new dealer applicants to complete a 6-hour DMV-approved pre-licensing course (California Vehicle Code §11704.5). California Dealer Academy is state-approved. The course is $99 self-paced online; add a live Saturday webinar session for +$49.
Already licensed? Renewal requires 4 hours of continuing education every 2 years : $39 (California Vehicle Code §11704.5).
Before applying, you must create a legal business entity. Most California dealers choose an LLC ($70 filing fee) or Corporation ($100). You'll also need an EIN from the IRS (free, instant online), a California business bank account, and a CDTFA Seller's Permit (free, 1–3 business days). California charges an annual $800 minimum franchise tax.
Retail dealers need a commercial location with a display area for at least two vehicles on a paved surface visible from a public street. A permanent sign with your exact business name and minimum 6-inch letters is required : handwritten, paper, or vinyl banners are not accepted. Your office must have a desk, chair, lockable filing cabinet, computer, and dedicated phone line. Co-working spaces, shared offices, personal residences, and mail-drop addresses are not permitted.
Zoning approval typically takes 3–6 weeks. Always verify zoning before signing a lease.
California Vehicle Code §11710 requires a surety bond. The amount depends on your license type:
| License Type | Bond Amount | Form |
|---|---|---|
| Retail new or used vehicle dealer | $50,000 | OL 25 |
| Motorcycle-only or ATV-only dealer | $10,000 | OL 25 B |
| Wholesale-only, fewer than 25 vehicles per year | $10,000 | OL 25 B |
| Wholesale-only, 25 or more vehicles per year | $50,000 | OL 25 |
The bond premium is what you actually pay : a small annual fee, not the full bond amount. For a $50,000 bond, annual premiums start around $500 depending on credit.
You'll also need garage liability insurance (typically $1M/$2M coverage) and garage keepers legal liability if you store, repair, or detail customer or consignment vehicles. Workers' compensation is required if you have employees.
Wholesale-only dealers at or above 25 vehicles per year may apply on Form OL 56 for DMV permission to maintain the $10,000 bond. Written DMV approval is required.
California permits a $50,000 cash deposit filed with DMV in lieu of a surety bond.
The bond must remain at full value. A claim that reduces it below the required amount results in automatic license suspension until restored.
Bond data verified August 3, 2026 | Source: California Vehicle Code §11710
Applications are 100% online via the DMV Occupational Licensing Portal (ol.dmv.ca.gov). Paper packets are no longer accepted. Required: completed pre-licensing education, business entity registration, bond, and insurance.
A typical error-free application takes 45–90 days from start to finish. Missing Live Scan results are the #1 cause of application holds.
Once your application is under review, DMV schedules an on-site inspection : typically 30–60 minutes. The inspector verifies your permanent signage, posted business hours, accessible office, your bond and insurance documents, and a secure place to store records. Bring a printed binder with copies of all uploaded documents to speed the process.
Once licensed, you can register with California's major wholesale auto auctions. Most require a valid dealer license, $50,000 bond, CDTFA Seller's Permit, and garage liability insurance ($1M/$2M). Registration takes 2–5 business days after approval.
Major California auction networks:
Buyer's premiums typically range 5–10%. Plan on transport costs of $500–$2,500 per vehicle depending on distance.
Protect your license after approval: renew your bond annually, maintain insurance coverage, post all required disclosures, include your dealer number in advertising, and complete 4 hours of continuing education every 2 years ($39). Keep deal jackets and records organized : DMV can audit at any time.
Zoning, signage enforcement, and inspection logistics vary by city. These pages collect local DMV contacts, zoning portals, nearby auctions, and vendor partners for your area:
Expanding or relocating? Every state does dealer licensing differently. These guides break down requirements for key states and compare them to California:
For expert hands-on support through every step : entity formation, bond and insurance placement, location selection, DMV application assembly, inspection prep, and auction enrollment : our Deluxe Dealer Package walks you through from idea to approval.
Practical guides for running a profitable dealership once you're licensed:
Yes. Retail dealers must have a commercial location with a display area for at least two vehicles, visible from a public street, with permanent signage. Wholesale dealers may operate from an office without a display lot : verify zoning before leasing.
Plan for 45–90 days from start to finish. The pre-licensing class takes 1–2 days online. Zoning approval typically takes 3–6 weeks. After application submission, dealer plates arrive within 2–4 weeks. (California Vehicle Code §11710)
Under California Vehicle Code §11710: $50,000 (OL 25) for retail new or used vehicle dealers. Motorcycle-only or ATV-only dealer: $10,000 (OL 25 B). Wholesale-only, fewer than 25 vehicles per year: $10,000 (OL 25 B). Wholesale-only, 25 or more vehicles per year: $50,000 (OL 25). You pay only the annual premium : not the full bond amount. For a $50,000 bond, premiums start around $500/year depending on credit. (Source: California Vehicle Code §11710)
Yes. Major California auctions : Manheim, Copart, IAA, ADESA, ACV : accept both retail and wholesale licenses. You'll need your dealer license, $50,000 bond, CDTFA Seller's Permit, and garage liability insurance ($1M/$2M). Registration typically takes 2–5 business days.
Your sign must be permanent, mounted at your business location, visible from the street, and display your exact business name as registered with DMV. Minimum suggested letter height is 6 inches. Handwritten, paper, or vinyl banner signs are not accepted by DMV inspectors.
DMV schedules an on-site inspection after your application passes initial review. Inspections typically take 30–60 minutes. The inspector verifies your permanent signage, posted hours, accessible office, bond and insurance documents, and a secure place to store business records. Bring a printed binder with copies of all uploaded documents.
Ready-to-use resources to speed up your licensing process:
Additional resources are in development. If you need a specific template or tool, contact us and we'll help you find what you need.
California Dealer Academy is a DMV-accredited dealer education provider (CA License #CCC0007) with four California locations: West Covina (West Covina), Corona (Corona), San Diego (San Diego), Folsom (Folsom). Our pre-licensing and continuing education courses are state-approved. Our setup team works with new and experienced dealers across the state on application preparation, location compliance, bond and insurance placement, auction access, and inspection readiness.
