Selling vehicles as a business in California takes a dealer license from the DMV. The process has several parts, but none of them is hard once you know the order. Here it is, step by step.
At a glance
| Issued by | California Department of Motor Vehicles |
|---|---|
| Surety bond | $50,000 used dealer; $10,000 wholesale-only |
| Course | Pre-licensing education from a DMV-approved provider |
| Application fee | $175, non-refundable |
7 steps to your license
1. Choose the type of license
California licenses new and used vehicle dealers, motorcycle dealers, wholesale-only dealers and auto brokers, each with its own rules. The two most common:
- Used motor vehicle dealer: buy at dealer-only auctions, sell to other dealers and to the public.
- Wholesale dealer: buy at dealer-only auctions and sell to other dealers, but not to the public.
2. Meet the prerequisites
- Be at least 18 years old
- Hold a valid California driver's license
- Have a permanent commercial place of business
- Get zoning approval from the city or county
- Get a seller's permit from the California Department of Tax and Fee Administration
- Register the business with the California Secretary of State and include the latest statement of information
3. Take the pre-licensing course
The course comes from a DMV-approved provider and covers dealer regulations, sales practices, advertising rules and record keeping.
4. Set up the business location
Both retail and wholesale dealers need a physical location where the accounting and business records are kept, and a DMV inspector may visit.
- Retail dealers need commercial office space used only for the dealership.
- Wholesale dealers need an office, which may be in a residential or a commercial building.
5. Get a surety bond
Every dealer needs a surety bond or a certificate of deposit. It protects customers and the state if DMV fees or collected sales tax go unpaid. The bond is $50,000 for a used car dealer and $10,000 for a wholesale-only dealer.
6. Submit the application and fees
Along with the application, include proof of the course, proof of insurance, fingerprint and background check clearance, proof of the business location, the occupational license application with the personal history questionnaire, the authorization to release financial information, the appointment of the director as agent for service of process, the Live Scan request, a letter of authorization, the fictitious name statement and the resale permit, plus the dealer plate application if you want plates (they are optional). The fees:
- $175 non-refundable application fee
- $1 family support program fee
- $70 for each branch location
- $90 for each dealer plate, $92 for each motorcycle plate, plus county fees
- $300 New Motor Vehicle Board fee per location (new vehicle dealers only)
- $100 auto broker endorsement
Then book an appointment at the nearest DMV Occupational Licensing Inspection office to hand in the paperwork and fees.
7. Pass the DMV inspection
The DMV inspects the premises to confirm the office, the vehicle display area and the record keeping meet its requirements.
Before you apply
Requirements, fees and bond amounts change. Confirm the current rules with the California DMV before you file. This guide is general information, not legal advice; for questions about your situation, talk to a lawyer.
Licensed? Stock your lot at the Kendall FL Auto auction
Licensed dealers can register to bid at the Kendall FL Auto auction, check the run list of upcoming lots, or consign vehicles to the sale.