Vehicle Licensing and Registration

1. The maximum document preparation fee that a dealer may charge a buyer for preparing the DMV paperwork is $55.00.
2. This fee may not be represented to the buyer as a governmental fee.
3. You do not have to charge this fee. It is entirely up to you.

1. The maximum fee you may charge the buyer for smogging the vehicle is $50.00. The smog certificate fee (currently $8.25) is a separate, additional fee that you may charge the buyer.
2. Remember to tax the smog fee you charge to the buyer (up to the $50.00 maximum). Do not tax the smog certificate fee (the $8.25).
3. Smog Transfer Fee: This $8.00 fee must be charged when transferring vehicles that are four model years old or newer.
4. Smog Abatement Fee: Do not confuse this fee with the Smog Transfer Fee above. The smog abatement fee is charged by DMV, in lieu of a smog test, for vehicles that are six registration years old or newer.

11.0.5 Vehicle License Fee

1. The Vehicle License Fee (VLF) is a tax charged for operating a vehicle on public highways in California. See Revenue & Taxation Code section 10751-10753. All of the revenues from this tax, other than administrative costs and fees on trailer coaches and mobile homes, are constitutionally dedicated to local governments. In 2003, Former Governor Gray Davis raised the VLF to try and close a 38 billion dollar shortfall in the state budget. This increase was very unpopular with motorists and helped lead to his recall and election of Governor Schwarzzeneger. One of Governor Schwarzengger’s first official acts was to rescind the fee retroactive back to when Davis had raised it.
   
   The VLF is calculated on the vehicle’s "market value.” The market value is the cost to the buyer (including the value of any trade-ins), less sales tax, adjusted by a depreciation schedule. The market value does not include tax, smog fees, document preparation fees, license fees, or finance charges. For motor vehicles, the depreciation schedule is based on an 11-year depreciation period; an 18-year depreciation period is used for trailer coaches.
   
2. The VLF Rate: A 0.65 percent rate is applied to the depreciated value to determine the fee. Prior to January 1, 2005, the rate was 2 percent.
3. Alternative Fuel Vehicles
   1. See section 2.035 of the Handbook of Registration Procedures, http://www.dmv.ca.gov/pubs/pubs.htm for further information on alternative fuel vehicles.

11.0.6 VLF Classification

1. DMV initially assigns a two letter Vehicle License Fee classification based on the cost of the vehicle paid by the buyer. The VLF classification and year first sold are used to determine the annual VLF amount while the vehicle is owned by the buyer.
2. “Asterisk Year”
   An asterisk year (*YR) is assigned to a vehicle by the DMV when:
   1. A used California registered vehicle is transferred to a new owner;
   2. A nonresident vehicle is registered to someone other than the original buyer and;
   3. the vehicle is altered or modified

   The asterisk year is assigned by DMV when processing the transfer paperwork. This starts a new VLF depreciation schedule for the vehicle. If an asterisk year appears on the title, use that year, instead of the year 1st sold, to determine the VLF using the Table.

3. Asterisk Year Exceptions:
   Asterisk years are not assigned in these situations:

   1. Transfer of a leased vehicle from the lessor to the lessee.
   2. Transfer of a repossessed vehicle to the repossessor.
   3. Transfers between certain family members who are exempt from use tax
   4. Transfer of a vehicle to the insurance company after a total loss settlement.
   5. Vehicles being junked.
4. To determine the VLF amount, use the Vehicle License Fee Rate Table (Reg 360), which lists the VLF classifications and corresponding fees. This Table can be obtained from the DMV at the following address:
   
   DMV
   Forms and Accountable Items Section MS G202
   P.O. Box 932382
   Sacramento, CA 94232-3820
   
5. You must charge a full year VLF upon transfers of used vehicles unless you are transferring a non-resident military ownership to a regular registration. In that case only, pro-rate the VLF from the month of transfer through the vehicle expiration date.

Late Penalties
Since January 1, 2003, penalties for the VLF, registration fees, and weight fees are calculated separately. A flat penalty is assessed on the registration fee, and the
penalties on the VLF and weight fees are a percentage of their total.

For Original Applications:

If the payment is late: the penalty will be the sum of:

One year or less

• $30 registration fee penalty.
• 40% of the VLF due for that year.
• 40% of the weight fee due for that year, if any.

More than one year to (and including) two years

• $50 registration fee penalty.
• 80% of the VLF due for that year.
• 80% of the weight fee due for that year, if any.

More than two years

• $100 registration fee penalty.
• 160% of the VLF due for that year.
• 160% of the weight fee due for that year, if any.

For Renewal Applications:

If the payment is late: the penalty is the sum of:

1 to 10 days

• $10 registration fee penalty.
• 10% of the VLF due for that year.
• 10% of the weight Fee due for that year, if any.

11 to 30 days

• $15 registration fee penalty
• 20% of the VLF due for that year.
• 20% of the weight fee due for that year, if any.

31 days to (and including) one year*

• $30 registration fee penalty.
• 60% of the VLF due for that year.
• 60% of the weight fee, due for that year, if any.

More than one year to (and including) two years

• $50 registration fee penalty.
• 80% of the VLF due for that year.
• 80% of the weight fee due for that year, if any.

More than two years

• $100 registration fee penalty.
• 160% of the VLF due for that year.
• 160% of the weight fee due for that year, if any.

*Source: Handbook of Registration Procedures 31–7

PNO Penalties
A certificate of Planned Non-Operation (REG102) may be filed up to 90 days after the registration expiration date if the vehicle was not operated during that time period. However late penalties will be due in addition to the PNO filing fee. To get the form go to http://www.dmv.ca.gov/forms/reg/reg102.htm

Waiver of Fees and/or Penalties

Penalties: These may be waived upon payment of the registration fees due if the penalties accrued prior to the date the transferee (including a dealer) purchased the vehicle and the transferee was unaware that registration fees were due. (VC §9562a)
Note that the license plate assigned to the vehicle must display a current year sticker
that matches the year for which the transferee is requesting a waiver of fees and penalties. A Statement of Facts (REG 256) stating the sticker number on the license plate and
that the transferee was not aware the fees were unpaid and due must be submitted
with the application. See V.C. §9562. To obtain a REG 256 go to http://www.dmv.ca.gov/forms/reg/reg256.htm .

Penalty Calculations
If the payment is late: then the penalty rate is:
1 to 10 days = 10%
11 to 30 days = 20%
31 days to (and including) one year = 60%
more than one year to (and including) two years = 80%
more than two years = 160%

Source: V.C. 9554

Waiver of Penalties For Vehicles bought at an Auction
Vehicle Code §9561.5 allows the DMV to waive any penalties due for late registration if all of the following criteria are met:

1. The vehicle is sold through a dealer conducting a wholesale motor vehicle
   auction as provided in Vehicle Code §4456(b).
2. Immediately prior to the sale the vehicle was registered as a leased vehicle.
3. Delivery of the vehicle to the dealer conducting the wholesale motor vehicle
   auction is not later than 25 days after the termination of the lease.
4. The lease termination date and date of delivery to the auction is on the application for registration or transfer and registration. Use a REG 256 (http://www.dmv.ca.gov/forms/reg/reg256.htm ) when submitting your application.