You will need to meet all these requirements to obtain your California Dealer License:
A California dealers license must be at an established place of business. The dealer's building must be permanent in nature and can be a trailer as long as the trailer never becomes part of the dealer's inventory. All records and books must be located at the dealer's place of business and must be open for inspection during all operating hours.Your business building for your dealers license must meet all local zoning requirements. Be sure to contact your City or County Planning and Zoning office before your purchase or lease a building for your dealership. It must be zoned for the sale of motor vehicles.
A dealer must have a display area for the vehicles you are selling. You must have enough room for the type of vehicles your are licensed to sell. Motorcycle dealers would need enough space to display motorcycles. Motor vehicle dealers would need enough space to display cars, trucks, or trailers. Wholesalers and autobrokers are exempt for the dealers display area. The display area for dealers must be the same address as the dealer building. The dealer's lot must be used exclusively for the sale of motor vehicles. Be sure to never allow a neighboring business's customers to park on your dealer display area. Then a customer might assume that vehicle is part of your inventory. This is confusion the State wants you to avoid. You will need to arrange for an Occupational Licensing Inspector to inspect your dealership to make sure it meets all requirements as per California law. You can find your local inspector by visiting Inspector Officers by Location website.
Any California dealer must have a sign identifying the business building as a dealership. Proper signage is required for all dealer locations according to California State law.
Submit Dealer Surety Bond. If you are only selling motorycles or if you are a wholesale dealer selling less than 25 vehicles per year you will only need a $10,000 dealer surety bond and complete dealer surety bond OL 25B All other California Dealers will need to submit a $50,000 dealers surety bond and complete surety bond form OL 25C A dealer surety bond is based on your credit score and can be obtained from most insurance agents. With good credit a $50,000 dealer surety bond will cost a dealer about $300 to$400 dollars a year. Dealers may also complete a Deposit Agreement form OL 25 E and deposit these amounts in a financial institute such as a bank.
Dealers must complete a Pre-License Education Program. Any dealer renewing a license must complete continuing education every 2 years. The Pre-License education may be taken as a live webinar, the continuing education may be taken in a downloadable format. Both courses may now be taken online.
Dealers must complete an Appointment of Director as Agent for Services Form ADM 9050. You must appoint the Director of Motor Vehicles as your "True and Lawful Agent". Every dealer in the State of Califronia must appoint the Director of Motor Vehicles as an Agent for Services. This form can either be notarized or signed by a Deparment of Motor Vehicles officer or an officer of the California Highway Patrol.
Complete Application for Original Occupational License Part C OL 12 This form shows the CA DMV what type of business entity you choose for your dealership.
Complete Original Application for Occupational License OL 21 A This is the California Dealer License Application form. You must also attach zoning approval with this form and include your dealers bank information. You will also include a copy of the lease or any ownership information. The DMV wants to make sure every dealer has the legal right to operate out of the business building.
Complete California Authorization to Release Financial Information Form OL 53 The State of California wants to make sure a person is financially secure before granting a California Dealers License.
Complete Occupational License Personal History Questionnaire Form 29B for every person listed on the dealers license.This form includes important personal and business history for each persons name that will be on the license.
A copy of Request for Live Scan Service form 8016 This baxically shows the State of California that each person on the dealers license is of high ethical standards. The DMV does not want to issue a dealers license to someone that was managing an auto theft ring or someone that previously rolled back odometers. The DMV will not tolerate any type of past motor vehicle crimes. Any person that lives out of State must call 916-229-3126 to request Fingerprint Card ADM 1316. Persons that live in a state other than California must also Request Exemption from Mandatory Fingerprint Submission BCII 9004. This is required for all persons that live in another state applying for a California Dealers License.
If you are a dealer selling brand new trailers you will need to submit a Letter of Authorization from your manufacturer. This is not required unless the dealer is selling brand new trailers.
If you are applying for a dealers license as a Corporation you must submit Statement of Information SI 550 If you are applying for your license as a Limited Liability Company or a Limited Liability Partnership, you must submit Statement of Information LLC -LLC 12
Submit a copy of your California Fictitous Name Statment
Submit copy of your Business License, Occupational Certficate, or Tax Certificate. These are to be submitted with your license paperwork if required by your city or county. You can find out by calling the Planning and Zoning office at your City Hall or County court house that your dealership will be located in.
Submit a copy of your State Board of Equalization Resale Permit
A dealer in California is required to complete Report of Sales on a regular basis and submit them to the DMV. A dealer must also use dealer license plates according to all State of California guidelines. You may never loan out a dealer license plate in California.
You must notify the Department of Motor Vehicles if you ever change dealership locations or if you open a branch dealer office anywhere in the State.
A dealer must also agree to notify the California Department of Motor Vehicles if you ever change ownership, or if you ever change your dealership business structure. Staying in contact with the DMV is crucial to operating a California Dealership.