Get Your Dealer License in California

Step 1: Choose Your License Type

I recommend looking into the Used Commercial Auto Dealer License.

Step 2: Attend a Dealer Training Class

If you are applying for a used vehicle dealer or wholesale dealer license, you must attend a 6-hour pre-licensing training program and pass a test consisting of 40 questions. 

Test Fee: $16 per sitting

Step 3: Location - (need 1st and last month usually)

Your location must have the following requirements:

• The display area of the principal place of business shall be of sufficient size to physically accommodate vehicles of a type for which the dealership is licensed to sell.
• The display area must be clearly for the exclusive use of the dealer for display purposes only.
• Additional display areas are permitted within a radius of 1,000 feet from the principal place of business and any licensed branch location without being subject to separate licensing. 
• Include an office with direct entry from the outside, fitted with a desk, filing cabinet and telephone, holding all records related to your business
• Display a sign at a minimum of 2 square feet that meets all CVC guidelines and the CA Code of Regulations

For more details, click here to visit the CA DMV site.

Note: Be sure the location is in compliance with all state, county and municipal zoning regulations and ordinances before signing the lease agreement.

To find a location, resources include the commercial real estate section on Craigslist, real estate agents experienced in commercial property & zoning and other auto dealers. Here is how you find out where other dealers have leased space.

Step 1: Search cars for sale on Craigslist by dealers.

Step 2: Take the phone number from the Craigslist listing and search it on the internet.

Step 3: Take the address of the dealer and search to find the office complex or warehouse that allows auto dealers.

Step 4: Last step is to contact the landlord for any vacancies.

Step 4: Bond - $50,000

I describe a Bond as an insurance policy for your customers. You only pay a percentage of the Bond amount. That percentage is based on your credit score with the most favorable rates for those with 680 score or higher in my experience.

Step 5: Obtain the Proper Licenses & Permits

The licenses and permits you need to acquire are:

• Board of Equalization Resale Permit

Questions should be referred to CDTFA at (800) 400-7115 or refer to information published at CDTFA Publication 73.

• City and/or County Business License

Note: If you are offering repair services, you will have to apply with your local Bureau of Automotive Repair.

Step 6: Arrange a Place of Business Inspection

You are required to arrange an appointment with an Occupational Licensing inspector. The inspector will inspect your place of business, including the office, the books and records, the display area and the signs. For further details on the exact procedure, visit the DMV’s website.

Step 7: Incorporation & EIN

 You may need these numbers: NAICS Code for Used Car Dealers 441120 and SIC Code 5521.

Step 8: Gather All Required Documents

You can download the application checklist used, wholesale or autobroker licenses. You’ll need to fill out all of these documents and include them with your application:

• Application for Original Occupational License, Part C (OL 12)
• Original Application for Occupational License, Part A (OL 21A)
• Authorization to Release Financial Information (OL 53)
• Application for Occupational License Personal History Questionnaire, Part B (OL29B)
• Appointment of Director as Agent for Service of Process (ADM 9050)
• Photographs of business location
• Original Dealer Education Certificate of Completion, issued by the course provider (Used Auto-Commercial and Dealer-Wholesale only)
• Letter of authorization (New Trailer dealers only) from a licensed manufacturer for every vehicle line sold
• Application to join the Business Partner Automation program (New/Used Auto-Commercial only)

Step 9: Submit Your Application

Once you’ve completed the application and collected all the necessary items in your checklist (including the application for Original Occupational License and the original application for Occupational License), submit all forms and documents to a Local Occupational Licensing Inspections Office.

Licensing Fee: $175 (plus $70 for each branch location)

 Additional Fees:

• $71 for each dealer plate and $73 for each motorcycle plate (varies by county)
• $300 New Motor Vehicle Board fee per dealership location
• $100 Autobroker Endorsement fee

You can check the status of your application here. Temporary licenses can be granted within 30 days.

Step 10: Get a Mentor! The learning curve is 2 years. Take the shortcut and be profitable faster.

You can have knowledge and experience at your side to give you that 20/20 hindsight vision. Go to the Auto Dealer Business School to learn how you can level up with a mentor.

NOTE: If any links give you trouble, report them to me...lol.. Email me at [email protected]