Who these rules cover
Vehicle Code 11704.5 is written for dealers licensed to sell used vehicles, at retail or wholesale only. Before that license issues, one person in the ownership who will run the business day to day passes the DMV's written exam, and before the exam, a preliminary education course. After it issues, the license renews every year, and every two years the dealer completes four hours of continuing education like this course (11704.5(c)). The section leaves out new-vehicle dealers and their staff, dismantlers, and dealers licensed for motorcycles only, trailers only or all-terrain vehicles only (11704.5(e)).
Two exceptions matter to small dealers. A wholesale-only dealer who handles fewer than 50 vehicles subject to registration in a year is excused from the continuing education (11704.5(c)(3)) and claims the exemption on form OL 257 with the renewal (DMV dealer license page, read 2026-10-22). And the person who takes the course need not be the owner: completion by a managerial employee of the dealer satisfies the requirement (11704.5(c)(2)).
What the license took to get
The DMV's new dealer checklist, OL 248A (rev. 4/2020), lists what the original application carried: application forms OL 12 and OL 21A, the surety bond, a financial information release (OL 53), and for each owner a Personal History Questionnaire (OL 29B), an appointment of the DMV director as agent for service of process (ADM 9050) and a Live Scan fingerprint receipt, plus the corporation's or LLC's Statement of Information, a fictitious name statement, the CDTFA seller's permit, photographs of the lot and the dealer education certificate.
The fees, set by Vehicle Code 9262 and listed on the DMV's dealer license page (read 2026-10-22): a $175 non-refundable application fee, a $1 family support program fee, $70 for each branch location, $16 for the written exam, and $100 for an autobroker endorsement on a retail license. An applicant from out of state pays $42 for each person's fingerprint card.
The exam is scored at 70 percent. At least one person in the ownership structure who has primary responsibility for the day-to-day management passes it, and that person, or another who has passed, has to stay in the ownership for the life of the license (13 CCR 268.04). An applicant who fails waits a week and pays the $16 again; after a third failure the education course is taken over before the next attempt (DMV dealer license page). The education certificate that admits you to the exam is good for one year from the day the course ended (13 CCR 268.08(b)).
The bond stands behind the license. Vehicle Code 11710(b) sets it at $50,000 for a dealer, and 11710.1 lets a wholesale-only dealer who sells fewer than 25 vehicles a year file $10,000 instead; 13 CCR 268.10 and 268.12 name the forms, OL 25 and OL 25B. The bond is for the people a dealer deals with, not for the dealer: it promises no fraud that costs a purchaser, a seller, a finance company or a government agency money (11710(a)), and Vehicle Code 11711 gives each of them an action on it. A bond drawn down and not restored, or an unpaid judgment against dealer and surety, suspends the license automatically until the bond is made whole (11710(c)). A bond that lapses ends the license, below.
The renewal every year
A dealer license and its plates run one year from the last day of the month they were issued (Vehicle Code 11717(a)). Renew online at dmv.ca.gov/olonline or by mailing form OL 45. The DMV's page lists the renewal at $125 plus the $1 family support fee, $75 for an autobroker endorsement, and $92 for each dealer plate, $94 for a motorcycle plate, plus county fees (read 2026-10-22). The OL 45 (rev. 3/2026) adds $125 for each branch and prices the plates at $104 and $106: a plate costs the prevailing registration fee (9262(e)), which rises each January 1 with inflation (1678), so check the current OL 45 before you pay.
The renewal may be filed up to 90 days early (11717(b)). Miss the expiration date and 11717(c) gives 30 days to renew with a penalty equal to the original application fee, $175 on the OL 45, plus a penalty on each plate. After the 30 days the license cannot be renewed at all (11717(d)).
Every second renewal asks for one more thing. The OL 45 lists proof of continuing education, required every two years, among the papers that go with it. That proof is the certificate this course issues, or the completion the provider has already submitted to the DMV online, which providers have been able to do since October 2022 (OLIN 2023-05). Keep your own copy either way.
The four hours every two years
The course has to be one the DMV has approved and certified. The provider sends the DMV its lesson plan on the outline the DMV publishes as OL 2000, and the DMV certifies the program with a number that appears on every certificate. A program that drifts from its approved plan, or fails to update it when the law changes, loses that certification, and the DMV does not accept a certificate issued while a program was decertified (13 CCR 268.06(f) and (g)).
Three rules reach the student. First, the course is at least four hours of instruction, 240 minutes by the DMV's guideline, with registration and breaks not counted (OL 2000, part A). Second, it ends in a comprehensive final exam, passed at 70 percent or better (268.06(h)). Third, you show the provider a current California driver license or identification card, and the provider must refuse a certificate to anyone who does not (268.06(i)). OLIN 2024-06 (May 2024) says no other identification admits a student.
The certificate itself is a DMV form, OL 256, and since July 15, 2024 the DMV takes only its 04/2024 revision (OLIN 2024-06). It carries your full printed name, your date of birth, your driver license or ID number, the course's start and completion dates, the hours of instruction, the provider's name, phone and address, the DMV's curriculum certification number, the instructor's or provider's name and signature, and a certificate number unique to you (13 CCR 268.08(a)). That is why this course asks for your license number and birth date before it certifies you.
The provider keeps the class record, your roster entry, dates and times, exam and score, for at least a year and a month after the class, and a DMV inspector may read it (13 CCR 268.06(j)).
Changes you file
The license names a business, its owners and a place. Vehicle Code 11704(c) requires notice to the DMV within 10 days of any change in the ownership or corporate structure, and 11712(a) notice immediately on a change of location. Each modification costs $70 (9262(a)(3)): a name change, an address change, a new branch, or a change of officers (DMV dealer license page, read 2026-10-22). A new officer, director, member or stockholder files the Personal History Questionnaire and agent-for-service appointment the original owners did, with fingerprints if the person takes part in business decisions (DMV, Ownership Changes, rev. 9/2012). Lesson 2 lists what goes with an address change.
A change in the form of ownership is not a modification. A sole owner taking a partner, or a partnership becoming a corporation or LLC, cancels the license and takes an original application, with the $175 fee and a new bond (same sheet; 9262(a)(1); OL 40, Ownership Changes).
What cancels a license on its own
Most enforcement is a proceeding: the DMV accuses, the dealer answers, a hearing follows. Vehicle Code 11721 is different. It names six events that cancel the license and the special plates automatically, with no hearing:
- Abandoning the established place of business, or changing it without the notice to the DMV that Vehicle Code 11712 requires.
- Failing to keep an adequate bond, or to file a new one before the surety's termination of the old one takes effect.
- Surrendering the plates and license, voluntarily or not; the DMV may still file an accusation on the surrendered license.
- Notice to the DMV that the person designated as licensee has changed. The plates may pass to the new licensee until they expire.
- Suspension or revocation of the licensee's corporate status.
- Suspension, revocation or cancellation of the seller's permit by the California Department of Tax and Fee Administration.
A cancelled license is not a suspended one. Selling a car the next day is acting as a dealer without a license (Vehicle Code 11700); the only sale 11700 still allows is a wholesale sale of your own inventory to a licensed dealer, with a statement of facts that you are not licensed. The license, plates and report of sale books are surrendered on the DMV's demand (11712(a)). Getting back means a new application, with its fees.
At the lot
The license lives at an established place of business: a place you actually occupy, continuously or at regular periods, where the books and records are kept (Vehicle Code 320), with an office that is not temporary or mobile, a display area and a permanent sign (13 CCR 270.00 to 270.08), and your license and each salesperson's posted where the public sees them (Vehicle Code 11709(a)). No section says the business hours must be posted, but the DMV's lesson plan outline lists posting your days and hours of operation among the licensing requirements (OL 2000, topic 15), and its memo OLIN 2023-08 says a dealer open by appointment only is not occupying the place: an authorized person must be available during regular business hours, and the lot open to an unannounced inspection. Post the hours, and be there.
Two notices hang inside. Vehicle Code 11709.1 requires a retail used-vehicle dealer to post that a buyer may have the vehicle inspected by an independent third party, at the buyer's expense and with the dealer's approval. Vehicle Code 11709.2 changed on October 1, 2026. The old 8 by 10 inch sign, which said there is no cooling-off period unless the buyer obtains a contract cancellation option, was repealed with the option itself (SB 766, Chapter 354 of 2025). The new section requires a physical notice in 36-point type in every sales office, cubicle and contract room: California has no cooling-off period for new vehicles, but a buyer or lessee of a used vehicle for $50,000 or less has three days to cancel for any reason, restrictions and a restocking fee included, and should ask the dealer how. Lesson 2 walks the lot in detail.
Enforcement in one paragraph
The DMV acts against a dealer license three ways, and lesson 3 takes each apart. Administratively it can place a license on probation, suspend it or revoke it, after an accusation and a hearing (Vehicle Code 11705). Criminally, every violation of the occupational licensing division is a misdemeanor (40000.11(a)), prosecuted by the district attorney. Civilly, the DMV and the people a dealer dealt with claim against the bond (11711) and the courts award damages. The Car Buyer's Bill of Rights of 2005 added misdemeanors of its own for certified-vehicle, add-on charge and credit score violations. Keep the records, file what is due when it is due, and treat each posted notice and disclosure as part of the license.
Sources
- Vehicle Code 11704.5, dealer education; 11704(c), notice of ownership changes; 11700, acting as a dealer without a license, read 2026-10-22.
- Vehicle Code 11710, 11710.1 and 11711, dealer bonds and actions on them; 11709, 11709.1 and 11709.2 (as added by SB 766, operative October 1, 2026), postings at the place of business; 11712, change or loss of the place of business; 11717, expiration and renewal; 11721, automatic cancellation; 320, established place of business, read 2026-10-22.
- Vehicle Code 9262, dealer license and plate fees; 1678, the yearly fee adjustment; 11705 and 40000.11, grounds for discipline and the misdemeanor rule, read 2026-10-22.
- 13 CCR 268.04, 268.06 and 268.08, the dealer exam, the education program and the certificate; 268.10 and 268.12, bond forms; 270.00 to 270.08, place of business, read 2026-10-22.
- SB 766 (Chapter 354, Statutes of 2025), sections 8 and 9, chaptered text, read 2026-10-22.
- DMV, Vehicle Dealer License, application, renewal and modification requirements and fees, read 2026-10-22.
- DMV forms OL 248A, New Dealer Application Checklist (rev. 4/2020); OL 45, Renewal Application (rev. 3/2026); Ownership Changes (rev. 9/2012), read 2026-10-22.
- DMV, Guide for Licensed Vehicle Dealers and Lessor-Retailers, OL 40 (rev. 12/2009), Ownership Changes, read 2026-10-22.
- DMV, Lesson Plan Guidelines for Used Vehicle Dealer Education Programs, OL 2000 (rev. 12/2007), parts A and F and topic 15.
- DMV industry memos OLIN 2023-05 (online provider submissions), OLIN 2023-08 (OL industry compliance) and OLIN 2024-06 (identification and the OL 256 form), read 2026-10-22.