How to Become a Car Dealer in California

used car dealer in california

If you want to buy and sell cars as your occupation in California, you need to obtain a dealer’s license. A dealer’s license gives your the right to operate a business as a car dealer, though several criteria must be met and an application submitted fully. You must:

  • Attend a dealer training education course
  • Fill out several forms
  • Have proof of your property for operating as a dealer
  • Pay your application and annual fees
  • Provide a surety bond
  • Undergo a background investigation

Your application, once everything has been submitted, will be reviewed by special inspectors and either approved or denied within 120 days of your completed application.

This guide assumes that you already have a business set up along with the building, a sign, and the necessary requirements are already in place.

Part 1 of 4: Attend a dealer training program

Step 1: Find a dealer training program. Find a dealer training program operating close to you.

Step 2: Complete the training programe. Once you complete the training program, you must successfully pass a test on the course information.

Step 3: Get your certificate. Obtain the Dealer Education Certificate of Completion from the course provider.

  • It will need to be submitted with your application for a dealer license.

Part 2 of 4: Obtain a surety bond

For used car dealers, you’ll need to secure a surety bond of $50,000 prior to being issued a dealer license. This essentially provides a security to the state that your business will be operated in an ethical and legal manner.

Step 1: Acquire a bond. Obtain a bond from your financial institution in the amount of $50,000.

Step 2: Complete the form OL25. Fill out form OL25 completely to be submitted along with your dealer license application.

Step 3: Paying the surety bond. You can also pay the surety bond as a cash deposit to the DMV.

Part 3 of 4: Obtain your used car dealer application checklist

Step 1: Use the online application checklist. Use dealer application checklist on the State of California DMV website.

  • Your application will be rejected or delayed if you are missing information.

  • The checklist must be submitted along with your application, and all the following forms in order.

Step 2: Submit the form OL12. Supply a completed Application for Original Occupational License, form OL12.

Step 3: Complete the form OL21A. Submit a completed Original Application for Occupational License, form OL21A.

  • Both occupational license forms are different and must be completed and submitted.

Step 4: File the form OL25. File your surety bond form, OL25, next in your application.

Step 5: Submit the form OL53. Complete form OL53, Authorization to Release Financial Information, and submit it next in the order.

Step 6: Supply the form OL 902. Submit the Property Use Verification for Vehicle Dealers License, OL 902 next.

  • This form must be completed and signed by an official for your local zoning agency.

Step 7: Complete and attach form OL29B. The Application for Occupational License Personal History Questionnaire.

  • It must be completed by every person listed as part of the ownership on form OL12.

Step 8: Attach your personal information. Attach a photocopy of your driver’s license and social security number next in the order.

Step 9: Complete the form ADM9050. The Appointment of Director as Agent for Service of Process for each listed owner on form OL12.

Step 10: Submit the form DMV 8016. Complete a Request for Live Scan Service, form DMV 8016, for each person required to complete the personal history questionnaire.

  • This is a fingerprint card scan that is kept on record.

Step 11: Attach supporting documents in the following order:

  • Your Dealer Education Certificate of Completion that was issued when you finished your training course

  • Articles of Incorporation if you are starting your used car dealership as a corporation

  • A copy of your Fictitious Name Statement

  • A signed copy of your rental or lease agreement for your property, along with proof of ownership from the property owner

  • A photocopy of your business license

  • A copy of your State Board of Equalization Resale Permit

  • Photos of your business location, sign, car lot, and building

Step 12: Check all of your paperwork. Double check that your paperwork is all present, your checklist is completed, and make a copy of all the forms and documents for your records.

Part 4 of 4: Submit your used car dealer application

Step 1: Locate your local Occupational Licensing Inspections Office.

Step 2: Turn in your paperwork. Submit all of your paperwork at the OL Inspections Office.

Step 3: Pay the necessary fees. There is a $175 non-refundable application fee.

  • In addition, you are required to pay a $1 Family Program Support Fee.

  • Pay $71 plus applicable county fees for each dealer plate you wish to obtain. You aren’t required to have any.

  • If you have more than one location, pay $70 for each additional branch location.

Step 4: Stand by for your approval. Wait for your used car dealer license approval. It can take up to 120 days for an application to be approved.

  • A background check will be performed as well.

  • If you have a criminal record or have a past that may indicate you won’t conduct business in an ethical manner, your application may be rejected.

The statements expressed above are only for informational purposes and should be independently verified. Please see our terms of service for more details

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