1) How do I become a car dealer in California?
The first step to getting your California used auto dealer license is to complete a Pre Licensing course. Our course satisfies the DMV’s educational requirement, and goes over the different license types, applying for your license, and operating as a dealer.
Once you complete your course, you will take your DMV Exam with your Inspector, and then you will start working on your dealership business information (such as a surety bond, local business license, and location) to submit with your application.
The last step will be your DMV Inspection, at your business location.
Check out our Steps to Becoming a Dealer page for a more detailed overview.
2) How long does it take to get a California used auto dealer license?
The DMV gives you one year from the date you complete your Pre Licensing course to submit your dealer license application. Most students complete their dealer license application process within a few weeks of taking their course. If your plans are delayed, and a year passes before you are able to submit your application, you can retake Pre Licensing for an updated certification. Once you submit your application, the last step will be your DMV Inspection. This is scheduled based on your local Inspector’s availability, and usually includes a waiting period of a few weeks.
3) Why do I need an auto dealer license?
If you sell a vehicle without an auto dealer license, you risk being barred by the DMV from obtaining a license in the future.
The benefits of being a licensed dealer include:
1. Access to dealer only vehicle auctions.
2. Purchasing vehicles at wholesale dealer prices.
3. Purchasing vehicles with auction company financing.
4. You will not pay sales tax on your vehicle purchases.
5. You will not pay registration fees on your vehicle purchases.
6. You can use dealer plates to drive vehicles without registering them.
7. Writing off your expenses.
8. Saving significant money purchasing vehicles for yourself, friends and family.
9. Selling locally or exporting vehicles to other countries.
10. Purchasing cars at auction, then selling them via EBay, Craigslist or through your own company website.
11. Brokering vehicles without investing your own money.
And, making money doing what you enjoy.
4) What is the difference between a Wholesale auto dealer license and a Retail auto dealer license?
How do I get an auto dealer license without a display area or lot?
Wholesale
Wholesale dealers can obtain dealer plates.
A wholesale dealer license allows you to buy from private parties, at the dealer auctions, and from other dealers directly. Wholesale dealers can sell to other dealers, and they can sell/export vehicles to foreign countries.
Wholesale dealers cannot sell directly to the public.
To get your wholesale dealer license, DMV requires an office. There is no sign or display area requirement for a wholesale dealer license.
Can I work from home as a California auto dealer?
A home office can, in some cases, qualify as your office requirement for a wholesale dealer license only. The DMV will not consider a home office for a retail license.
A wholesale office in a home or residential unit will be considered if:
- the office is on the ground floor with a direct entrance from the outside
- the office is used exclusively for the dealership business and not shared with personal space in the home
- your local town, city, county planning department will issue a business license for your business at your home address
Wholesale dealer home offices are accepted on a case by case basis, by your DMV Inspector. Even if you meet the above criteria, your Inspector may not pass your home office space. Their primary consideration is the impact of your business on your residential area.
Retail
Retail dealers can obtain dealer plates.
A retail dealer license allows you to buy from private parties, at the dealer auctions, and from other dealers directly. Retail dealers can sell to other dealers and to the general public. They can also sell/export vehicles to foreign countries, and they can broker sales to the public with the Auto Broker Endorsement.
The DMV requires retail dealers to have an office, a two foot square sign, and a vehicle display area big enough for at least two vehicles. The display area requirement does not mean you need to have a lot, as long as it is clearly for the exclusive use of the dealer it can be inside, outside, and as minimal as two parking spots in front of your office designated with signage and on your lease. There are many display area options, which we cover in detail in our Pre Licensing course.
5) How do I become an Auto Broker?
Broker
The Auto Broker Endorsement (which is an add-on to a retail dealer license only, not wholesale) allows you to arrange the sale of vehicles owned by others and get paid for it.
Brokers don’t actually own vehicles. They merely arrange a sale between a buyer and a seller. The auto broker can act on behalf of the seller, and assist buyers with finding and purchasing vehicles. Brokers are sometimes also called Auto Buying Services. Brokers can charge the buyer, the seller, or both for their services. You can get the Auto Broker Endorsement from the DMV with your retail auto dealer license for an additional $100.00. The Auto Broker Endorsement has several nice advantages, which we cover in detail in our Pre Licensing course, including providing dealers getting started a way to buy and sell vehicles without having to invest their own money.
6) What educational course and tests do I need to take to get my California auto dealer license?
The first step to apply for any auto dealer license type – wholesale, retail, or retail with the auto broker endorsement, is to complete a Pre Licensing course.
Pre Licensing is the only education requirement for your license application. During the course, you will complete your first exam. This exam is essentially a practice exam, required by the DMV, to make sure you understands the basics of setting up and operating your dealership.
Once you receive your Pre Licensing certificate, you will schedule your offical exam with your DMV Inspector. This exam will be very similar to your Pre Licensing exam. Once complete, your Inspector will sign off that you can proceed with your auto dealer license application.
7) How do I submit my California auto dealer license application? Is it online, or by mail?
How do I make my California DMV Online Occupational Licensing Portal?
Historically, dealer license applications were mailed in to the DMV.
In 2023, the CA DMV launched their Occupational Licensing Portals – also known as ‘DMX’, ‘Online Access Modules’, or ‘Occupational Licensing Online’.
This online system is still in a state of development, and we continuously update our Pre Licensing course with the most recent information from the DMV.
You will create your OL Portal, and that is where you will submit your auto dealer license application. Some paperwork – such as your Pre Licensing certificate, and Surety Bond certificate – will still be provided to you as a hard copy. You will upload a photo of that hard copy to your portal, and keep the phyiscal certificate for your records.
The DMV has ‘how to’ videos on their Occupational Licensing portal login page, which we suggest watching before you create your OL portal.
If you need assistance with your portal, you can contact Occupational Licensing at (916) 229-3126.
