How to Obtain a Retail Dealer License in California

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A retail dealer license allows you to legally sell vehicles to the public in California. This license is essential for anyone looking to operate a vehicle dealership. Here is a step-by-step guide to help you navigate the process of obtaining a retail dealer license in California.

Step 1: Determine Eligibility
Before starting the application process, ensure you meet the basic eligibility requirements:

Be at least 18 years old.
Have a valid California copyright.
Have no felony convictions related to the vehicle industry.
Step 2: Complete a Pre-Licensing Education Program
California requires all applicants for a retail dealer license to complete a pre-licensing education program. This program covers important topics such as state laws, regulations, and business practices related to vehicle sales.

Where to Find Pre-Licensing Courses:

California New Car Dealers Association (CNCDA): They offer state-approved pre-licensing courses.
Community Colleges and Technical Schools: Many local institutions offer relevant courses.
Online Platforms: Accredited providers like Automotive Dealer Training and DealerTraining.org.
Step 3: Obtain a Surety Bond
A surety bond is a financial guarantee that you will comply with state regulations. For a retail dealer license in California, you typically need a $50,000 surety bond.

How to Get a Surety Bond:

Contact a bonding company or insurance agent.
Provide necessary documentation and complete the application process.
Pay the bond premium, which is usually a percentage of the bond amount.
Step 4: Set Up a Business Location
Your dealership must have a permanent business location that meets California’s requirements:

An office with at least 150 square feet of space.
A display area to accommodate at least two vehicles.
A sign that is visible from the street and meets local zoning regulations.
Local Zoning Compliance:

Obtain zoning approval from your local city or county planning department.
Ensure your business location complies with all local zoning laws.
Step 5: Submit Fingerprints for a Background Check
All applicants must undergo a background check. This involves submitting fingerprints to the California Department of Justice and the FBI.

How to Submit Fingerprints:

Use the Live Scan fingerprinting service.
Complete the Request for Live Scan Service form (DMV 8016).
Submit the form and fingerprints at an approved Live Scan location.
Step 6: Gather Required Documents
Compile all necessary documents before submitting your application:

Completed Application Form (OL 248A).
Certificate of completion from the pre-licensing course.
Surety bond documentation.
Proof of insurance.
Business license and zoning approval.
Photographs of your business location and sign.
Lease agreement or proof of property ownership.
Financial statements or proof of funding.
Step 7: Submit Your Application
Submit your completed application and all required documents to the California Department of Motor Vehicles (DMV).

Application Fee:

The fee for a retail dealer license application is typically around $175, but check the current fee schedule.
Step 8: Pass the DMV Inspection
After submitting your application, the DMV will conduct an inspection of your business location. The inspection ensures that your dealership meets all state requirements.

Preparing for the Inspection:

Ensure your office, display area, and signage are in compliance.
Have all required documents and records organized and accessible.
Step 9: Receive Your License
Upon passing the inspection and approval of your application, you will receive your retail dealer license. This license must be displayed prominently at your business location.

Maintaining Your Retail Dealer License
To keep your license in good standing, you must:

Renew your license annually.
Complete any required continuing education.
Maintain your surety bond and insurance.
Comply with all state laws and regulations.

Obtaining a retail dealer license in California involves completing a pre-licensing course, securing a surety bond, setting up a compliant business location, and passing a DMV inspection. By following these steps and ensuring you meet all requirements, you can successfully obtain your retail dealer license and operate your vehicle dealership legally.