California Autobroker EndorsementHow to Add OL 902 to Your Dealer License
The California autobroker endorsement is an add-on to an existing used motor vehicle dealer license, applied for on DMV Form OL 902 under Cal. Veh. Code §11735. There is no separate autobroker license and no additional bond — the existing $50,000 OL 25 dealer bond responds to brokering activity. Broker fees must be disclosed in writing under §11736, paid by the buyer separately from the vehicle price, and records retained five years under §11738. The federal CARS Rule (effective Oct 1, 2026) layers federal pricing and add-on disclosure on top of California’s framework; the City of Los Angeles additionally requires a permit under LAMC §103.205.
Already licensed? Skip the second bond.
Your existing OL 25 dealer bond covers autobrokering. Add the OL 902 endorsement and start brokering — no new surety underwriting required.
Endorsement application via DMV — bond filed once and stays in force.
California Autobroker Endorsement — Quick Facts
The single-screen reference card for the autobroker endorsement. Every row keyed to the underlying statute, the DMV form, or the city ordinance.
| License Type | Endorsement — NOT a standalone license |
| Base License Required | CA Used Motor Vehicle Dealer (OL) |
| Endorsement Form | DMV Form OL 902 |
| Statutory Cite | Cal. Veh. Code §11735 |
| Additional Bond | None — existing $50,000 OL 25 bond covers brokering |
| Fee Disclosure Rule | Cal. Veh. Code §11736 |
| Recordkeeping Rule | Cal. Veh. Code §11738 (5-year retention) |
| Autobroker Fee | Paid by buyer; separate from vehicle price |
| Written Agreement | Required with retail buyer before brokering |
| CARS Act Impact | SB 766 disclosure tightening — effective Oct 1, 2026 |
| LA City Layer | LAMC §103.205 broker permit required inside LA |
What a California Autobroker Actually Does
An autobroker, under Cal. Veh. Code §11735, is a licensed dealer who, for a separately paid fee, arranges or negotiates the sale of a vehicle owned by someone else — almost always another dealer — to a retail buyer. The broker never owns or inventories the vehicle and never appears in the chain of title.
- Acts for the retail buyerThe autobroker is engaged by the consumer to arrange or negotiate the purchase of a vehicle owned by someone else — typically another franchised or independent dealer. The broker does not own or stock the vehicle.
- Sources the vehicle off-lotA broker locates the specific make, model, trim, color, and price target the consumer wants by reaching out to dealers across California (and sometimes out of state), negotiating an out-the-door figure, and arranging delivery.
- Charges a broker fee — paid by the buyerUnder Cal. Veh. Code §11736 the autobroker fee is paid by the retail buyer up front, separately and apart from the vehicle purchase price. It is not financed into the deal by the selling dealer.
- Signs a written autobroker agreement firstBefore performing any brokering service for compensation, the broker must execute a written autobroker agreement with the consumer that itemizes the broker fee, the vehicle description, and the scope of the broker’s services.
- Does not take title in inventoryThe selling dealer transfers title directly to the retail buyer. The autobroker never sits in the chain of title and never reports the sale on the broker’s own report-of-sale book.
Official California Requirements
"An autobroker is a dealer who, for a fee, commission, or other valuable consideration, arranges or negotiates, or attempts to arrange or negotiate, the retail sale of a motor vehicle that is not owned by the dealer."California Vehicle Code Section 11735 • Cal. Veh. Code §11735
Key test: the brokered vehicle is not in the broker’s inventory. If the dealer takes the vehicle in first and then resells it, that is a regular retail sale — not brokering — and OL 902 is not the right pathway.
Endorsement, Not a Standalone License
One of the most common out-of-state misunderstandings: California does not issue a separate autobroker license. Brokering is added by endorsement to an existing used-vehicle dealer license — and only to an active license that has already cleared the §11712 place-of-business inspection and posted the OL 25 bond.
| Item | Autobroker Endorsement (CA) | Hypothetical Standalone License |
|---|---|---|
| Form type | OL 902 — Autobroker Endorsement (add-on) | No equivalent — California has no standalone autobroker license |
| Base license required first | Yes — must already hold an issued CA used motor vehicle dealer license (OL) | Not applicable |
| Bond posted | Existing $50,000 OL 25 dealer bond — no additional bond | Not applicable |
| Statute | Cal. Veh. Code §11735 | No statutory standalone autobroker license category exists |
| Pre-licensing education | Already satisfied at the dealer-license stage (6-hour course) | Not applicable |
| DMV exam | Already passed at the dealer-license stage | Not applicable |
| Live Scan | Already on file from the dealer-license application | Not applicable |
| Renewal cycle | Renews with the underlying OL dealer license (2-year cycle) | Not applicable |
| Who may broker without it | No one — brokering without the OL 902 endorsement is unlicensed activity | Not applicable |
Why an endorsement, not a license
Brokering by a non-dealer would create a layer of consumer-facing vehicle commerce without the protections built into the dealer license — the place of business, the OL 25 bond, Live Scan, the DMV dealer examination, and the recordkeeping rules in Regulation 31. California chose to attach brokering to an active dealer license rather than create a parallel licensure track that would replicate (or under-replicate) those protections.
If you are not yet a dealer
You cannot apply directly for OL 902. The pathway is to apply for the underlying California used motor vehicle dealer license first — including the 6-hour pre-licensing course, the DMV dealer exam, Live Scan, the OL 12 application, and the location inspection — then submit OL 902 once the license is issued. See the California used motor vehicle dealer guide for the upstream process.
DMV Form OL 902 — Step-by-Step
OL 902 is a short form because the DMV already did the heavy vetting at the dealer-license stage. The steps below are the practical sequence — what to check, what to file, and what to put in place before the first brokered deal.
Form caveat: the DMV occasionally updates form numbers and revision dates. Verify the current edition of OL 902 on the DMV Occupational Licensing forms page before submitting.
- 1
Confirm the base dealer license is in good standing
OL 902 is an endorsement, not a license. The DMV will not process Form OL 902 unless the applicant already holds an active California used motor vehicle dealer license (OL) with the OL 25 surety bond on file and current. If the base license is in suspension, the endorsement application will be returned.
- 2
Complete DMV Form OL 902
Form OL 902 (Autobroker Endorsement Application) requests the dealer’s name, license number, fictitious name (if any), business address, mailing address, and ownership signatures. The form is short — typically a single page — because the substantive vetting already occurred at the OL stage.
- 3
Verify business name and signage carry the broker designation
Once endorsed, advertising, signage, and the written autobroker agreement must accurately disclose that the dealer is acting as an autobroker on that transaction. The DMV expects the dealer’s licensed name to appear on all autobroker agreements exactly as licensed.
- 4
Confirm OL 25 bond is current — no second bond is required
The existing $50,000 OL 25 used-vehicle dealer bond covers brokering activity. There is no separate autobroker bond in California. If the bond has lapsed or is in cancellation, the underlying license is at risk and the endorsement cannot issue.
- 5
Submit Form OL 902 to DMV Occupational Licensing
File the form with the DMV Occupational Licensing Branch. The endorsement, once approved, is reflected on the dealer license record and authorizes brokering effective the date the DMV completes the update.
- 6
Implement the written autobroker agreement template
Before the first brokered transaction, the dealer must have a written autobroker agreement template that complies with §11736 — itemized broker fee, vehicle description, scope of services, and consumer signature lines. The agreement is the single most-audited document in autobroker enforcement actions.
- 7
Stand up §11738 recordkeeping (5-year retention)
Each brokered transaction must be recorded and the file retained for at least five years. Records include the executed autobroker agreement, the dealer-to-buyer purchase documents from the selling dealer, fee receipts, and any written communications evidencing the broker’s search and negotiation work.
- 8
Check city overlays — especially Los Angeles
Inside the City of Los Angeles, LAMC §103.205 requires a separate municipal broker permit administered by the Police Commission Board of Police Commissioners. The municipal layer is independent of, and additive to, the DMV endorsement.
Bond Requirements — The Same $50,000 OL 25 Bond
Adding the autobroker endorsement does not trigger a new surety bond, a bond rider, or a bond increase. The same $50,000 OL 25 used motor vehicle dealer bond that backs the underlying dealer license also backs the brokering activity. Practical implications:
- No second bondCalifornia does not require an autobroker-specific surety bond. The endorsement piggybacks on the dealer’s existing $50,000 OL 25 bond, which by statute responds to brokering as part of the dealer’s licensed activity.
- OL 25 covers broker fee disputesA claim that the broker collected a fee but failed to deliver the negotiated vehicle, or breached the written autobroker agreement, may be made against the existing OL 25 bond. The bond penalty is shared across all dealer claims — broker fees, sales tax remittance failures, title fraud, and any other §11710 exposure.
- No bond riderThere is no special rider or endorsement to the OL 25 bond form when an autobroker endorsement is added. The same OL 25 instrument continues in force without amendment.
- Bond stays at $50,000The penal sum remains $50,000. Adding the OL 902 endorsement does not trigger a bond increase, even though the dealer’s revenue mix may now include broker fees in addition to retail vehicle sales.
- Premium impactBecause the bond amount and obligee are unchanged, the surety premium for the underlying OL 25 bond is unaffected by adding the autobroker endorsement. The dealer’s next renewal premium is set by the same underwriting factors that drove the original bond — credit, claims history, and business tenure.
The bond math, in one paragraph
Penal sum: $50,000. Bond form: DMV OL 25. Obligee: the State of California. The same instrument the surety filed with the DMV when the underlying dealer license issued continues in force, unchanged, when the OL 902 endorsement is added. Claimants alleging broker-fee fraud, breach of the §11736 written agreement, or any other §11710-class wrongful act share the $50,000 penal sum with claimants alleging sales-tax remittance failures, title fraud, odometer rollback, or other dealer-side wrongdoing. The bond is not stackable: $50,000 is the aggregate available under the single OL 25 instrument across all dealer activity for the bond term.
If your OL 25 is in cancellation: the endorsement cannot be added until the bond is reinstated or replaced. A dealer license without a bond on file is in immediate jeopardy of suspension regardless of brokering plans.
Broker-Fee Disclosure Rules Under §11736
§11736 is where most autobroker enforcement actions live. The substance is not complicated — disclose the fee in writing before service — but the operational discipline (timing, document control, separation from the vehicle price) is where dealers slip up. The checklist on the right is the §11736 compliance spine.
Why this matters operationally: any §11736 deficiency is a DMV discipline issue and a bond-claim issue and a Consumer Legal Remedies Act claim — three lanes from the same defect.
- 1
The autobroker fee must be disclosed in writing to the retail buyer before any brokering service is performed.
- 2
The fee must be a stated dollar amount or a clearly described method of calculation — not "TBD" or "to be determined at closing".
- 3
The fee is paid by the retail buyer, separately from the vehicle purchase price paid to the selling dealer.
- 4
The fee may not be split with, paid to, or rebated from the selling dealer in a manner that disguises its source.
- 5
The written autobroker agreement must identify the broker by licensed dealer name and DMV license number.
- 6
The agreement must describe the vehicle to be brokered with enough specificity to identify it (make, model, trim, price target).
- 7
The agreement must describe the scope of brokering services the dealer will perform for the fee.
- 8
The agreement must be signed by the retail buyer before the broker performs negotiation services.
- 9
The agreement, fee receipt, and supporting transaction documents must be retained five years under §11738.
Recordkeeping Under §11738
Every brokered transaction generates a record file that must be retained for five years under Cal. Veh. Code §11738. DMV Investigations routinely pulls a sample of brokered files in audits; missing or partial files support license discipline independent of any consumer complaint.
- Executed autobroker agreement signed by the buyer (the master document under §11736).
- Itemized broker-fee receipt or invoice with date paid, payment method, and identification of the buyer.
- Search and negotiation log — emails, texts, and notes evidencing the broker’s outreach to selling dealers on the buyer’s behalf.
- Copy of the selling dealer’s buyer order, purchase contract, or sales agreement with the retail buyer.
- Vehicle identification — VIN, mileage, color, and trim level matched to the autobroker agreement description.
- Title and registration documents reflecting transfer from selling dealer to buyer (NOT through the broker).
- Lender disclosures if the broker fee was paid by a buyer in a financed transaction (still must be separate from the financed vehicle price).
- Advertising substantiation — copies of the advertising that drew the buyer to the broker, retained per CARS Rule expectations after Oct 1, 2026.
- Any consumer complaints, refunds, or service follow-ups associated with the brokered transaction.
Official California Requirements
"An autobroker shall maintain records of all brokered transactions for not less than five years, and shall make such records available for inspection by the department upon request."California Vehicle Code Section 11738 • Cal. Veh. Code §11738
CARS Act Impact on California Autobrokers
The FTC Combating Auto Retail Scams (CARS) Rule arrives October 1, 2026. Because California autobrokers operate under a dealer license, CARS reaches their broker fees, advertising, and add-on offerings. CARS layers federal disclosure standards on top of California’s §11736 / §11738 framework — it does not replace either.
Federal CARS Rule (FTC) — effective Oct 1, 2026
The FTC Combating Auto Retail Scams (CARS) Rule, originally finalized December 12, 2023 and currently scheduled for an October 1, 2026 effective date, imposes federal disclosure standards on motor-vehicle dealer pricing and add-ons. Because California autobrokers operate under a dealer license, the CARS Rule reaches their broker fees and add-on disclosures.
Offering price clarity
Under CARS, dealers must present a clear "offering price" in advertising — the price for which the consumer can buy the vehicle excluding only tax and government fees. Autobrokers presenting a negotiated price to a consumer must align that figure with the offering-price concept; bundling the broker fee into the advertised vehicle price is not permitted.
Add-on rules
The CARS Rule treats optional add-ons as a category requiring affirmative consent, with prohibitions on charging for add-ons that confer no benefit. Broker-arranged add-ons (extended warranties, GAP, dealer-installed accessories sourced through the broker’s selling-dealer relationships) are squarely within the CARS add-on framework.
Interaction with §11736
California §11736 already mandates broker-fee disclosure timing and form. CARS layers a federal disclosure standard on top, with FTC enforcement authority. The two regimes coexist; a compliance program built around §11736 should be reviewed against CARS before Oct 1, 2026 to close gaps in offering-price advertising and add-on consent.
Recordkeeping convergence
CARS requires that dealers retain advertising and consumer-communication records sufficient to substantiate offering-price representations. California §11738 already mandates five-year retention. Build one record system that meets the longer of the two — five years — and capture the full advertising history, not just the executed deal file.
See the California CARS Act explained guide for the full pricing-disclosure, advertising, and add-on consent framework as it applies to California dealer operations.
LAMC §103.205 — The Los Angeles City Layer
Brokering inside the City of Los Angeles triggers a municipal permit under Los Angeles Municipal Code §103.205, administered by the Los Angeles Police Commission. It is in addition to, not in place of, the DMV OL 902 endorsement.
If you operate strictly outside LA: the LAMC layer does not apply. Confirm your jurisdiction with the city or county business-licensing office where the dealership is physically located — most California cities do not impose a parallel permit, but most do require general business-tax registration.
LAMC §103.205 — municipal vehicle dealer / broker permit
The City of Los Angeles requires a separate municipal permit, administered by the Los Angeles Police Commission, for vehicle dealing and brokering activity conducted within city limits. The municipal permit is independent of the DMV license and the OL 902 endorsement.
Police Commission background review
The Los Angeles Police Commission conducts a background review of permittees that is separate from the DMV Live Scan already on file. Owners and operators must submit to LAPD-administered fingerprinting and pay a municipal investigation fee.
Premises inspection
The Police Commission may inspect the licensed premises within Los Angeles. The premises must comply with city zoning for vehicle-related business activity in addition to the DMV-side Veh. Code §11712 location requirements.
Permit renewal and fees
The municipal permit carries its own annual or biennial renewal cycle and fee schedule, set by the LA Office of Finance. Lapsed municipal permits expose the dealer to LAPD enforcement separately from any DMV action on the underlying state license.
Other California cities
Outside Los Angeles, most California cities do not impose a parallel broker permit. Confirm with the local business-licensing office for the specific jurisdiction of operation — Oakland, San Francisco, San Diego, Sacramento, and several others maintain their own business-tax registrations even where they do not require a permit specifically for autobrokering.
Penalties for Unlicensed Brokering and §11736 / §11738 Violations
Enforcement is multi-lane. The DMV can suspend or revoke the underlying dealer license. The OL 25 bond is exposed to consumer claims. The FTC (after Oct 1, 2026) adds civil penalty exposure. And Los Angeles enforces its municipal permit independently. Each lane runs in parallel — fixing one does not resolve the others.
Brokering without the OL 902 endorsement
Acting as an autobroker without a DMV-issued OL 902 endorsement on an active dealer license is unlicensed activity. The DMV may suspend or revoke the underlying dealer license, refer the matter for criminal prosecution under §11705, and seek civil penalties.
Misuse of broker fee
Collecting a broker fee without a written autobroker agreement, or collecting an undisclosed fee, violates §11736 and exposes the dealer to administrative discipline plus bond-claim liability under the OL 25 bond.
Failure to maintain §11738 records
Five-year retention of autobroker agreements, fee receipts, and supporting transaction documents is mandatory. DMV investigators routinely request these files in audits; missing records support both license discipline and adverse inferences in any consumer dispute.
Hidden split with selling dealer
Disguising the broker fee as a kickback or rebate from the selling dealer — rather than a separate fee paid by the retail buyer — is a per-se violation. Treated as a deceptive practice; supports both DMV action and a Consumer Legal Remedies Act civil claim by the buyer.
CARS Rule violations after Oct 1, 2026
After the federal CARS Rule’s effective date, FTC enforcement adds civil penalty exposure for misleading offering-price advertising and improperly disclosed add-ons. CARS penalties are independent of DMV discipline and can be pursued in parallel.
LAMC §103.205 violations inside LA
Operating without the municipal permit in the City of Los Angeles is a separate violation pursued by the LA Police Commission. The municipal permit lane is independent and can be triggered even when the state DMV record is otherwise clean.
License discipline
Suspension or revocation of the underlying CA used-vehicle dealer license — which extinguishes brokering authority along with everything else.
Bond claims
Direct claims against the $50,000 OL 25 bond by harmed consumers — broker-fee refunds, breach of the §11736 written agreement, undelivered vehicles.
Civil / criminal
Criminal referral under §11705 for unlicensed activity, CLRA civil claims, FTC CARS penalties post-Oct 1, 2026, and LAPD enforcement inside LA city limits.
California vs. Other Major States — Broker Licensing Structures
If you are licensed in another state and considering California, the structure differences matter. California uniquely treats brokering as an endorsement to a dealer license, with no separate bond.
| State | Broker Structure | Bond Impact | Notes |
|---|---|---|---|
| California | Endorsement to existing used-dealer license (OL 902) | No additional bond — existing $50,000 OL 25 bond responds | Statutory framework at §§11735 – 11738; CARS Rule layered effective Oct 1, 2026. |
| Texas | Standalone Independent Motor Vehicle Broker (IMVB) GDN under TxDMV | $25,000 GDN surety bond required separately from any dealer license | TxDMV Form MVD-388 path; eLICENSING submission; biennial renewal. |
| Florida | No separate broker license; brokering by non-dealers prohibited | Brokering must be done under a Florida motor vehicle dealer license | Florida treats brokering as dealer activity; FLHSMV scrutinizes "finders" closely. |
| New York | DMV-registered repair shop / dealer rules apply; no standalone broker registration | Activity must run through a dealer registration where one exists | NY focuses on consumer-protection enforcement rather than a separate broker license. |
What Day-One Brokering Actually Looks Like
Most dealers add OL 902 because consumers are already asking them to find a car rather than buy from inventory. The endorsement is short; the operational discipline around §11736 and §11738 is what determines whether the brokering channel becomes a profit center or a license-discipline liability.
A typical first-month autobroker workflow
Most dealers add the OL 902 endorsement after they already have a steady stream of consumer referrals asking them to "find a car for me." The first month after endorsement is administrative — drafting the §11736-compliant autobroker agreement, building the §11738 record-retention folder system, and updating advertising to reflect autobroker status.
How the fee is typically structured
Common California broker-fee structures are a flat dollar amount (e.g., $500 – $1,500), a percentage of the savings the broker negotiates off MSRP, or a tiered fee based on vehicle price band. Whatever structure is used, the dollar figure or calculation method must be disclosed in writing before service begins.
How the selling dealer is paid
The selling dealer receives the negotiated vehicle price directly from the buyer (or buyer’s lender) — not from the broker. The broker fee flows from buyer to broker as a separate transaction. The selling dealer reports the sale on its own report-of-sale; the broker does not.
Where brokers most often slip up
Three recurring compliance failures: (1) verbal-only fee agreements with no §11736-compliant written document; (2) bundling the broker fee into the deal so the buyer’s lender finances it, which obscures the separate-payment requirement; and (3) failing to retain records for the full five years required by §11738.
California Autobroker Endorsement — Frequently Asked Questions
The ten questions California dealers ask most often before adding the OL 902 endorsement.
Is the California autobroker endorsement a separate license?
Do I need to post a separate bond for the autobroker endorsement?
What is DMV Form OL 902 and what does it ask for?
When does an activity actually count as brokering under Cal. Veh. Code §11735?
How is the autobroker fee supposed to be disclosed?
How long must autobroker records be kept?
How does the federal CARS Rule affect California autobrokers?
Do I need a separate City of Los Angeles permit if I broker inside LA?
What is the penalty for brokering vehicles in California without the OL 902 endorsement?
Does the autobroker endorsement renew separately from the dealer license?
Related Resources
Adjacent guides for the California dealer-license and bond landscape, the federal CARS Rule, and city-level overlays.
California Used Motor Vehicle Dealer Bond
The $50,000 OL 25 bond and licensing process underlying the OL 902 endorsement.
California Motor Vehicle Dealer Bond — Overview
The umbrella guide to all California dealer bonding under Veh. Code §11710.
California CARS Act Explained
Federal pricing-disclosure and add-on rules effective October 1, 2026 — how they reach broker fees.
How to Get a CA Dealer License
OL 12, Live Scan, the 6-hour education, the DMV dealer exam, and §11712.
California Wholesale Dealer Bond
$10,000 OL 25B — the narrow dealer-to-dealer license that does not support brokering to retail buyers.
California Dealer License Renewal
OL 45, 4-hour CE, and how the OL 902 endorsement rides the two-year cycle.
California Dealer Bond — Los Angeles
The LA city overlay, LAMC §103.205, and the Police Commission permit process.
California Dealer Bond Cost
Premium ranges for the $50,000 OL 25 bond and how the autobroker endorsement does not change pricing.
California Dealer Bond Guide
Comprehensive walkthrough of California dealer bonding — OL 25, OL 25B, and add-on endorsements like OL 902.
Need the OL 25 Bond Under Your OL 902 Endorsement?
We bond California used motor vehicle dealers in all 58 counties. The same $50,000 OL 25 bond responds to your autobroker activity — no second bond, no rider, no surcharge.