Getting a used car dealer license in California

In California, used-car dealers are licensed by California DMV Occupational Licensing.

Before your first retail sale you’ll need a $50,000 surety bond, a 6-hour pre-licensing course and a business location that meets the state’s rules. The state also inspects the location.

This page gathers what a new independent lot needs, each fact linked to the official source it came from.

Sources checked

At a glance

License
Used vehicle dealer, retail dmv.ca.gov (source, opens in a new tab)
Issued by
California DMV Occupational Licensing dmv.ca.gov (source, opens in a new tab)
Surety bond
$50,000 retail dealer bond. dmv.ca.gov (source, opens in a new tab) That’s the bond’s face amount, not what you pay: a surety company charges a yearly premium, usually a small percentage of it, set mainly by your credit.
Pre-licensing course
Required: 6 hours. Select a DMV-listed education provider. dmv.ca.gov (source, opens in a new tab)
Exam
DMV written used-dealer exam, $16 per attempt. Three attempts; retests at least one week apart. After third failure, repeat education. dmv.ca.gov (source, opens in a new tab)
Official fees
$175 application + $1 family-support fee + $16 exam. Optional dealer plate $92 plus county fees. Out-of-state fingerprint card $42/person if applicable. dmv.ca.gov (source, opens in a new tab)
Renewal
Annual renewal $125 + $1. Used-dealer continuing education: at least 4 hours every 2 years. Plate/county charges additional. dmv.ca.gov (source, opens in a new tab)
Site inspection
Yes. Occupational Licensing inspector schedules a site review after application processing. dmv.ca.gov (source, opens in a new tab)

Step by step

  1. Make sure you need a retail used-dealer license

    To sell used cars to the public you need California's retail used vehicle dealer license. A wholesale-only license can't sell to retail buyers, and new-car, autobroker and salesperson licenses cover different work. dmv.ca.gov › vehicle-dealer-license (source, opens in a new tab)

  2. Take the 6-hour dealer education program

    Complete the required 6 hours with an education provider on the DMV's list. You need the course before you can sit the exam. dmv.ca.gov › OL-4005-R9-2007-ASB-WWW.pdf (source, opens in a new tab) dmv.ca.gov › dmv-dealer-education-providers (source, opens in a new tab)

  3. Pass the DMV's written exam

    The used-dealer exam costs $16 per attempt. You get three attempts, at least a week apart. If you fail all three, you have to take the education program again. dmv.ca.gov › vehicle-dealer-license (source, opens in a new tab)

  4. Set up the business

    Form your business entity and get a seller's (resale) permit. The DMV also asks for background information on every owner, so collect that now. dmv.ca.gov › ol248u.pdf (source, opens in a new tab) dmv.ca.gov › vehicle-dealer-license (source, opens in a new tab)

  5. Find a location that meets the DMV's rules

    Do this before you apply, because the application describes the site and an inspector visits it. You need a permanent office with your business records kept there (a fixed trailer can qualify), a display area reserved for your inventory, and a permanent, weather-resistant sign outside. dmv.ca.gov › guide-for-licensed-vehicle-dealers-and-lessor-retailers-pdf (source, opens in a new tab)

  6. Get the $50,000 dealer bond

    A surety company issues the bond on DMV form OL 25. You don't pay $50,000: you pay the surety a yearly premium, a fraction of that amount, set mainly by your credit. dmv.ca.gov › ol248u.pdf (source, opens in a new tab) dmv.ca.gov › vehicle-dealer-license (source, opens in a new tab)

  7. Get fingerprinted

    Owners are fingerprinted through Live Scan using form DMV 8016. Applicants from out of state use a fingerprint card instead, which costs $42 per person. dmv.ca.gov › ol248u.pdf (source, opens in a new tab) dmv.ca.gov › vehicle-dealer-license (source, opens in a new tab)

  8. Put the application packet together and apply

    The used-dealer packet (OL 248U) and its checklist (OL 248B) list everything. The core forms are the application (OL 12), the questionnaire (OL 21A), the premises information (OL 29B) and the bond (OL 25). The application fee is $175, plus a $1 family-support fee. dmv.ca.gov › ol248u.pdf (source, opens in a new tab) dmv.ca.gov › vehicle-dealer-license (source, opens in a new tab)

  9. Pass the site inspection

    After your application is processed, a DMV Occupational Licensing inspector schedules a visit to check the location. dmv.ca.gov › vehicle-dealer-license (source, opens in a new tab)

  10. Get the license before you sell anything

    Don't buy or sell for profit until the license is issued. Dealer plates are optional: $92 each, plus county fees. dmv.ca.gov › vehicle-dealer-license (source, opens in a new tab)

  11. Keep it current

    The license renews every year for $125 plus the $1 fee, and you need at least 4 hours of continuing education every 2 years. dmv.ca.gov › vehicle-dealer-license (source, opens in a new tab) dmv.ca.gov › dealer (source, opens in a new tab)

The location

Display lot
Retail display area reserved for dealer inventory. dmv.ca.gov (source, opens in a new tab)
Office
Permanent office and accessible business records; fixed trailer can qualify. dmv.ca.gov (source, opens in a new tab)
Sign
Permanent exterior weather-resistant business sign. dmv.ca.gov (source, opens in a new tab)

Before you apply

Entity documents, seller/resale permit and ownership background/Live Scan documents. dmv.ca.gov (source, opens in a new tab)

Forms

OL 248U used dealer packet; OL 248B checklist; OL 12 application; OL 21A questionnaire; OL 29B premises information; OL 25 bond; DMV 8016 Live Scan. dmv.ca.gov (source, opens in a new tab)

Get the current versions from dmv.ca.gov; we don’t host copies.

Not the license you’re after?

Wholesale-only cannot retail; new/franchise, autobroker endorsement and salesperson licenses serve different activities. dmv.ca.gov (source, opens in a new tab)

What trips people up

Our read of the requirements above, not official guidance or statistics.

The hardest part: securing an inspectable retail site before paying ongoing rent.

Easy mistakes:

Questions

How much does a California dealer license cost?

The DMV's own fees are $175 for the application, $1 for the family-support fee and $16 for the exam, plus $92 for each dealer plate you order (and county fees). On top of that you pay a yearly premium for the $50,000 bond, the course provider's tuition, and the costs of the location. Those vary too much to quote. dmv.ca.gov › vehicle-dealer-license (source, opens in a new tab) dmv.ca.gov › ol248u.pdf (source, opens in a new tab)

Is there a test?

Yes. After the 6-hour education program you take the DMV's written used-dealer exam, $16 per attempt, with up to three attempts at least a week apart. dmv.ca.gov › OL-4005-R9-2007-ASB-WWW.pdf (source, opens in a new tab) dmv.ca.gov › dmv-dealer-education-providers (source, opens in a new tab)

Do I need a lot, or can I work from an office?

You need both a permanent office and a display area reserved for your inventory, with a permanent sign outside. The DMV inspects the site before the license is issued. dmv.ca.gov › guide-for-licensed-vehicle-dealers-and-lessor-retailers-pdf (source, opens in a new tab) dmv.ca.gov › vehicle-dealer-license (source, opens in a new tab)

How long does it take?

We couldn't find a processing time published by the DMV. The course, the exam, setting up the location and the inspection all come before the license is issued, and finding a location that passes inspection is usually the hardest part. dmv.ca.gov › vehicle-dealer-license (source, opens in a new tab) dmv.ca.gov › guide-for-licensed-vehicle-dealers-and-lessor-retailers-pdf (source, opens in a new tab)

How often do I renew?

Every year, for $125 plus $1, with at least 4 hours of continuing education every 2 years. dmv.ca.gov › vehicle-dealer-license (source, opens in a new tab) dmv.ca.gov › dealer (source, opens in a new tab)

Sources

Not affiliated with the California DMV. Not legal advice. Requirements change; always confirm with the state.