Obtaining a California Dealer License

Posted on September 21, 2012 by Aaron

Are you interested in getting your own California dealer license, but don’t know where to begin? Do not fret. We’ve taken the time to detail the process to obtain your very own California dealer license!

Class and Exam

The California DMV requires applicants to complete a live, six-hour DMV Pre-licensing Class. The class, which costs $125 to attend, teaches how to become an auto dealer, how to get into dealer auctions, and how to purchase and sell vehicles. Upon completion of the class, the California DMV requires applicants to pass a 40-question exam. The cost of the exam is $16, and the Pre-licensing Class prepares you for the examination.

Applications

Once you have successfully completed the exam, you will need to download and complete the Dealer License Application forms. The application fee is $176, and should be submitted to your local DMV along with the completed applications.

Dealership Location

The next step in obtaining your California dealer license is to select a location for your dealership. If you are interested in acquiring a retail dealer license, you will need an office, a display area / lot to display your inventory, and a permanent sign posted outside of your location stating your company name and address. All of the details regarding your dealership location are explained in great detail in the Pre-licensing Class, as well as instruction on avoiding issues with your dealership.

Licenses, Permits and Miscellaneous

The next step in obtaining your California Dealer License is to apply for a local business license, which can be obtained at your local city or town offices in their tax and license division. Some cities have online applications. Once you’ve applied for your local business license, you must apply for a seller’s permit at one of the Bord of Equalization field offices. These permits allow you, the dealer, to buy vehicles tax-free. Often times, seller’s permits are issued the same day they are applied for.

Next, you need to get your “live scan” fingerprints taken. The “live scan” is an electronic fingerprinting process, which takes your scanned fingerprint and sends it to the Department of Justice to complete a criminal background check. Typically, the cost for your “live scan” fingerprints is $25. The next step required to obtain your California dealer license is to obtain a surety bond. The California DMV requires dealers to get a surety bond of at least $50,000. It will be easier and less expensive to obtain the bond if you have good credit or purchase a bond for longer than one year.

Inspection

You’re almost there! After completing all of the previous steps, there are three pieces of the puzzle remaining. You need to obtain a signed copy of your dealership’s lease or rental agreement to submit with your dealer license application. Once you have the signed agreement, you give you completed application along with the agreement to your local DMV inspector.

Now you’re in the home stretch, rounding third base with your eye on the prize. Last, but not least, is your inspection. Your inspector will contact you to set up a time to meet you at your dealership to inspect the property. Once you pass the inspection, your inspector will provide you with a temporary license, and you are set! Your formal California dealer license will be mailed to your dealership.