California doesn't issue a stand-alone auto broker license. To broker retail car sales, you need a California retail dealer license with an autobroker endorsement on it (Vehicle Code §11735). The endorsement costs $100 and $75 a year to renew. Once you have it, the law sets the rules: a written brokering agreement before the buyer signs or pays $100 or more, a bold statement of whether the selling dealer pays you, deposits capped at 2.5% and held in a trust account, and a DMV autobroker log for every deal.
Educational information only. This article is not legal or financial advice.
In this article
- Broker, dealer or both?
- What you need
- Step by step
- The rules once you're brokering
- How brokers get paid
- What it costs
- Frequently asked questions
Broker, dealer or both?
An auto broker finds a car for a client and negotiates the deal with a selling dealer. The client signs the purchase contract with the selling dealer, not with the broker, and the broker owes a fiduciary duty "of utmost care, integrity, honesty, and loyalty" to the party it represents (VC §11735). In California, the broker must itself be a licensed dealer, but it can't be both the seller and the broker in the same deal (VC §11736(e)).
For a side-by-side comparison, see Auto broker vs dealer license. For what brokers do day to day, see What does an auto broker do?
What you need
| Requirement | Detail | Source |
|---|---|---|
| Retail dealer license | The endorsement goes on a vehicle dealer license and is needed "to broker retail sales transactions" | DMV; VC §11735 |
| Pre-licensing course and DMV exam | 6-hour DMV-approved course; 70% to pass the exam | DMV |
| Established place of business | An office that meets DMV's requirements; DMV may inspect it | DMV |
| Surety bond | $50,000 for a retail dealer | VC §11710 |
| Live Scan | For every owner | DMV |
| CDTFA seller's permit | Required for dealers | CDTFA |
| Endorsement fee | $100; $75 at each renewal | DMV; VC §9262(d) |
| Trust account | At a state- or federally regulated bank, savings and loan or credit union, for consumer deposits and purchase money | VC §11737 |
Step by step
- Take the pre-licensing course and pass the DMV exam. Start the 6-hour course
- Set up the business: entity, EIN, city business license, seller's permit and a location DMV will approve.
- Get your $50,000 bond and Live Scan.
- Apply for your retail dealer license and add the autobroker endorsement, paying the $100 endorsement fee with your application. Already licensed? Contact DMV Occupational Licensing to add it.
- Open a trust account before you take any deposits.
- Get your autobroker log. DMV provides it after issuing the endorsement. It stays DMV's property and can be inspected at any time.
- Build your brokering agreement with every required disclosure before your first client. See the rules.
Full licensing checklist: What do you need to get a dealer license in California?
The rules once you're brokering
| Rule | What it requires | Source |
|---|---|---|
| Written brokering agreement | Given to the buyer before the buyer signs a purchase agreement or pays $100 or more, whichever comes first, and to the selling dealer before it signs with the buyer | VC §11736(a) |
| Fee disclosure | The agreement states any fee the buyer owes and, in bold, either "We do not receive a fee from the selling dealer" or "We receive a fee from the selling dealer" | VC §§11736(f), 11738 |
| Deposit cap | No more than 2.5% of the vehicle's selling price | VC §§11736(b), 11738 |
| Trust account | Deposits and purchase money go directly into a trust account | VC §11737; DMV |
| Full refund | If the final price is higher than agreed, the car isn't as described, or the agreement expires before the buyer sees a purchase agreement, the buyer can cancel and get everything back, broker fee included | VC §§11736(d), 11738 |
| No double role | You can't be both the selling dealer and the broker in one deal | VC §11736(e) |
| Autobroker log | For each brokered retail sale: VIN, date of the brokering agreement, selling dealer's name, address and dealer number, consumer's name, and your name and dealer number | VC §11735; DMV |
| Records | Keep each brokering agreement at least 3 years | VC §11736 |
| Disputes | The agreement must tell consumers how to contact a DMV investigator | VC §11738 |
From experience (Garrett Eddings, professional opinion): Auto brokers make money by being the intermediary between a customer and a licensed dealer. They negotiate the deal so the transaction goes more smoothly, without the customer having to sit across the desk from the dealer.
The short version of the rules: agreement first, disclosure in bold, deposit in trust, and every deal in the log.
How brokers get paid
| Model | How it works |
|---|---|
| Flat fee from the buyer | A set fee per deal. Consumer guides put typical fees at about $200 to $1,000 or more |
| Percentage of savings | A share of what you save the client off an agreed benchmark |
| Fee from the selling dealer | Allowed, but it must be disclosed in bold in the agreement |
| Retainer | A small upfront amount credited toward the fee, within the 2.5% deposit cap |
California doesn't cap the broker fee itself. It caps the deposit and requires disclosure. See How do auto brokers make money?
What it costs
| Cost | Amount |
|---|---|
| Licensing fees for a retail dealer with the endorsement, before Live Scan | About $891 (breakdown) |
| Endorsement renewal | $75 a year, on top of the dealer renewal |
| Yearly license upkeep with the endorsement | About $721 |
| Running the business | Insurance, office, software, marketing. See the startup cost guide |
Frequently asked questions
Is there an auto broker license in California?
Not a separate one. Brokering retail sales requires a California dealer license with an autobroker endorsement.
How much is the autobroker endorsement?
$100 to add it and $75 at each renewal, on top of the dealer license fees.
Can a wholesale dealer be an auto broker?
The endorsement is for brokering retail sales and goes on a retail dealer license. A wholesale-only license doesn't cover retail brokering.
How much deposit can an auto broker take in California?
No more than 2.5% of the vehicle's selling price, held in a trust account.
How long do brokers keep records?
Keep each brokering agreement for at least 3 years, and keep the DMV autobroker log current for every brokered retail sale.
Is there a cap on auto broker fees?
No cap on the fee, but it must be disclosed in the written agreement, along with whether the selling dealer pays you.
Related
- Auto broker vs dealer license in California
- What does an auto broker do?
- How to find a licensed auto broker
- California Dealer License FAQ
Next step: Start the 6-hour dealer course for $99
Resources
- DMV: Autobroker's endorsement (Opens in new window)
- DMV: Vehicle dealer license (Opens in new window)
- Vehicle Code §11735 (Opens in new window)
- Vehicle Code §11736 (Opens in new window)
- Vehicle Code §11738 (Opens in new window)
Sources: DMV autobroker's endorsement page (Opens in new window) (retail brokering, log contents, trust accounts, VC §§11735, 11737, 9262(d)) · DMV vehicle dealer license page (Opens in new window) ($100 endorsement, $75 renewal) · Vehicle Code §§11710, 11735, 11736 and 11738 · CDA license cost breakdown · CarEdge (Opens in new window) and FINN (Opens in new window) (typical fees). Verified 2026-10-16.
This article is for educational purposes only and is not legal or financial advice. DMV makes every licensing decision. Have a California attorney review your brokering agreement. The instructor note reflects one instructor's professional experience and opinion.