California Used Motor Vehicle Dealer Bond$50,000 §11710 Bond + DMV Exam
The California used motor vehicle dealer license authorizes a dealer to sell used vehicles to the retail public. Every used retail dealer posts a $50,000 surety bond on DMV Form OL 25 under California Vehicle Code Section 11710(b)(1), completes a 6-hour DMV-approved pre-licensing education course, passes the DMV Dealer Examination at 70% or above, submits to Live Scan fingerprinting for every owner/officer/partner/ manager, and operates from an established place of business meeting Veh. Code 11712. The license runs on a two-year cycle with 4 hours of continuing education at each renewal.
California Used Motor Vehicle Dealer — Quick Facts
The single-screen reference card for the California used retail dealer license. Each row is keyed to the underlying statute or DMV form.
| License Class | Used Retail Motor Vehicle Dealer |
| Bond Amount | $50,000 |
| Bond Form | DMV Form OL 25 |
| Statutory Cite | Cal. Veh. Code 11710(b)(1) |
| Pre-Licensing Education | 6 hours (DMV-approved open provider) |
| DMV Dealer Exam | Required — $16, 3 attempts, 70% to pass |
| Live Scan | DOJ + FBI, every principal |
| License Cycle | 2 years; 4-hour CE at renewal |
| Application Form | OL 12 (Original Application) |
| DMV Decision Window | Up to 120 days under Veh. Code 11704 |
What Counts as a Used Motor Vehicle Dealer in California
A used motor vehicle dealer, as licensed by the California DMV under Vehicle Code Sections 11700 through 11740, is a person or business that sells used vehicles to the retail public from an established place of business. The license is the largest single licensee class regulated by the DMV Occupational Licensing Branch, and it carries the most operational rules of any auto dealer class in the state.
The used retail dealer license specifically authorizes:
- Retail sale of used vehicles to the consuming public from a permanent place of business
- Wholesale sale of used vehicles to other licensed dealers under the same license (no separate wholesale license required)
- Buying and trading vehicles at California dealer-only auctions (Manheim, Copart, ADESA, etc.)
- Issuing temporary operating permits and report-of-sale forms at delivery
- Use of California dealer plates on inventory under the issued license number
What the used retail license does not authorize: sale of new vehicles bearing a manufacturer franchise (which requires a franchised new motor vehicle dealer license), origination of retail installment contracts in-house without a California Financing Law license, or operation outside the licensed place of business.
Official California Requirements
"No person shall act as a dealer without having an established place of business... and without having first procured a license or temporary permit issued by the department, nor unless the license or temporary permit is in full force and effect."California Vehicle Code Section 11700 • Cal. Veh. Code 11700
Used Retail Dealer vs. Franchised New Dealer — Side by Side
The bond amount is the same. The operational rules around the license are not. The biggest practical differences are pre-licensing education (required for used; generally waived for franchised new) and the New Motor Vehicle Board fee (applies to franchised new only).
| Requirement | Used Retail Dealer | Franchised New Dealer |
|---|---|---|
| Bond amount | $50,000 — Form OL 25 | $50,000 — Form OL 25 |
| New Motor Vehicle Board fee | Not assessed | Assessed; remitted at issuance and renewal |
| Pre-licensing education | 6 hours, DMV-approved provider (required) | Generally not required (franchised new dealers) |
| DMV dealer examination | Required — $16, 3 attempts | Required |
| Live Scan (DOJ + FBI) | Every owner/officer/partner/manager | Every owner/officer/partner/manager |
| Continuing education at renewal | 4 hours every 2 years | Generally exempt from CE provider course |
| Franchise / manufacturer agreement | Not required | Required for each line-make |
| Sells used inventory at retail | Primary activity | Permitted (new + used both) |
| Sells wholesale to other dealers | Permitted under the same license | Permitted under the same license |
The $50,000 Bond Under Vehicle Code §11710(b)(1)
Every California used retail dealer files a uniform $50,000 surety bond on DMV Form OL 25. The bond names the principal as a motor vehicle dealer, the obligee as the Department of Motor Vehicles of the State of California, and conditions performance on the dealer's compliance with Division 5 of the Vehicle Code and all related DMV regulations.
The statutory protection on the bond runs in favor of the State of California and of any consumer or other dealer harmed by the licensee's violation of Division 5. The most common claim categories on California used retail dealer bonds are:
- Failure to deliver a clean certificate of title to the buyer within statutory time after sale
- Failure to pay off a trade-in lien — the single most frequent claim category on California used-dealer bonds
- Odometer fraud or rollback
- Sales tax collected from the consumer but never remitted to the CDTFA
- Misuse of dealer plates or temporary operating permits
- Material misrepresentation in the sale — undisclosed salvage, undisclosed frame damage, undisclosed lemon law buyback
OL 25 at a Glance
The 6-Hour Pre-Licensing Education — Open-Provider Model
California requires every used motor vehicle dealer applicant to complete six hours of DMV-approved pre-licensing education before sitting for the dealer examination. The course is delivered under an open-provider model — multiple DMV-approved vendors compete on price, format, and scheduling. There is no single monopoly provider.
Open-provider model
California does not assign pre-licensing education to a single monopoly vendor. Any provider approved by the DMV Occupational Licensing Branch may deliver the 6-hour course. You shop on price, schedule, format (online vs. in-person), and reputation.
Course content
Vehicle Code Division 5, DMV recordkeeping (Reg 31), report-of-sale procedures, dealer plate use, sales tax collection and remittance to the CDTFA, smog certification, consumer protection rules, and odometer disclosure.
Format
Most applicants take the course online and complete in a single sitting. In-person classroom delivery is offered by a smaller set of providers in larger metros (Los Angeles, San Diego, Sacramento, Bay Area).
Completion certificate
The provider issues a DMV-recognized completion certificate. The certificate is filed with the OL 12 application — without it, the DMV will not schedule the dealer exam.
Typical cost
$50 – $150 depending on provider and bundled exam prep. Pricing is competitive; the open-provider model keeps it low.
Common pitfall — assuming the course is the exam
Applicants moving from Texas or Florida often assume the pre-licensing provider also administers the licensing exam. In California, that is wrong. The 6-hour course is delivered by an approved provider; the dealer examination is then scheduled and administered by the DMV at a Driver Safety Office or Occupational Licensing field office. The provider does not give the exam, and a provider completion certificate is not a passing exam score.
The DMV Dealer Exam — $16, Three Attempts, 70% to Pass
After the application is on file and the 6-hour pre-licensing course is complete, the DMV schedules the dealer examination. The exam fee is $16 per attempt and applicants have up to three attempts within the application window. The passing score is 70%. The exam is administered directly by the DMV at a Driver Safety Office or Occupational Licensing field office — not by the education provider.
Subject matter on the exam is drawn from:
- Vehicle Code Division 5 — dealer licensing, dealer responsibilities
- Titling, registration, and transfer of ownership procedures
- Sales tax collection and remittance to the CDTFA
- Recordkeeping under DMV Regulation 31 — books, records, retention
- Report-of-sale forms and temporary operating permits
- Dealer plate use and restrictions
- Consumer protection — disclosure of prior salvage, frame damage, lemon law buyback
- Smog certification requirements (Bureau of Automotive Repair coordination)
- Odometer disclosure under federal and California law
- Advertising rules — including the CARS Act framework effective Oct 1, 2026
Exam at a Glance
Live Scan Fingerprinting — DOJ + FBI, No Exceptions
California requires Live Scan electronic fingerprinting for every owner, officer, partner, and manager listed on the OL 12 application. The DMV uses the prints to obtain criminal history records from both the California Department of Justice and the Federal Bureau of Investigation. Form OL 29 (Authorization for Live Scan) is submitted to the Live Scan operator at the time of fingerprinting, and the operator transmits the prints and request electronically to DOJ.
Cost is composed of three pieces, paid at the Live Scan station:
- DOJ criminal history processing fee — currently $32 per person
- FBI criminal history processing fee — currently $17 per person
- Live Scan operator rolling fee — varies by location, typically $20 – $30 per person
Skipping or delaying Live Scan for any single principal will hold the application — the DMV will not issue the license until results are received for every principal listed on the OL 12.
Live Scan — Where It Goes Wrong
Place of Business + DMV Investigations On-Site Inspection
Vehicle Code §11712 requires an established place of business. Before the license issues, the DMV Investigations Division dispatches an investigator to the address to inspect the location in person. The inspection is not a courtesy visit — it is a pass/ fail event, and locations that do not meet every element below are flagged for remediation before the license is approved.
Locations the inspection will reject
Residential addresses, PO boxes, mail drops, virtual offices, shared co-working spaces without dedicated dealership signage, self-storage units, and any location without zoning approval for vehicle sales. The inspection also fails locations that have signage but no display area, no separate office, or no posted hours conforming to those filed on the OL 12 application.
The Application — What Goes in the OL 12 Package
The California used dealer application is built around Form OL 12 (Original Application for Occupational License). The OL 12 is the cover form; everything else is an attachment that the DMV Occupational Licensing Branch reviews together as a single package. Under Vehicle Code §11704, the DMV has up to 120 days from the date the package is complete to act.
OL 12 — Original Application for Occupational License
Primary application form filed with the DMV Occupational Licensing Branch.
OL 25 — Surety Bond
$50,000 statutory bond on the DMV-prescribed form, with corporate surety power of attorney attached.
OL 16 — Personal History Questionnaire (each principal)
Background statement signed under penalty of perjury by every owner, officer, partner, and manager.
OL 29 — Authorization for Live Scan
Live Scan request form processed by an approved operator; results forwarded to the DMV.
Pre-licensing education completion certificate
6-hour course certificate issued by a DMV-approved provider, dated within the validity window.
DMV dealer examination — passed at 70% or above
Scheduled after the application is on file; $16 per attempt, up to 3 attempts.
Lease or deed for the business location
Establishes the permanent place of business under Veh. Code 11712.
Zoning approval letter from the city or county
Confirms vehicle sales are an allowed use at the address; separate from the DMV review.
Photos and floor plan of the business location
Submitted with the application; the location is also inspected on site by DMV Investigations.
OL 248 / OL 38 — Application Fees
DMV application and licensing fees, including the $175 application fee for new dealers.
City of LA Used-Vehicle Dealer Permit — LAMC §103.205
If the dealership's established place of business is inside the City of Los Angeles, the state DMV license is not the only required authorization. Los Angeles Municipal Code Section 103.205 imposes a separate municipal used-vehicle dealer permit administered by the Los Angeles Police Commission, with its own application, background review, and fee schedule. The municipal permit is additional to — not a substitute for — the DMV license.
Practical sequencing for LA-City applicants:
- Confirm city zoning allows vehicle sales at the address before signing a lease
- Apply for the LA Police Commission used-vehicle dealer permit in parallel with the DMV OL 12 — both reviews can run concurrently
- Maintain the municipal permit in good standing on its own renewal cycle — independent of the DMV two-year cycle
- Other cities (San Francisco, Oakland, Long Beach, San Diego) impose their own municipal business and zoning approvals; LA is the most involved
What It Actually Costs to Get Licensed
The bond premium is the largest recurring expense, but it is not the only cost to plan for. The table below lays out the bond premium tiers by credit alongside the one-time and recurring DMV and education costs of opening a California used-dealer license.
| Cost Item | Typical Range | Notes |
|---|---|---|
| $50,000 surety bond premium — excellent credit | $500 – $1,000 / year | FICO 700+, no prior claims, clean operating history. |
| $50,000 surety bond premium — good credit | $1,000 – $1,750 / year | FICO 650 – 699. |
| $50,000 surety bond premium — fair credit | $1,750 – $3,000 / year | FICO 600 – 649. |
| $50,000 surety bond premium — challenged credit | $3,000 – $5,500 / year | FICO below 600 or prior claim history. |
| Pre-licensing education (6 hours) | $50 – $150 | One-time; varies by provider and bundled exam prep. |
| DMV dealer examination | $16 per attempt | 70% to pass; up to 3 attempts. |
| Live Scan fingerprinting | ~$74 per principal | DOJ ($32) + FBI ($17) processing + Live Scan operator rolling fee (~$25, varies). |
| DMV application fee (OL 12) | $175 | One-time, paid with the OL 12 filing. |
| Zoning / business license fees | Varies by city | Separate municipal review — Los Angeles, San Francisco, San Diego, others. |
| City of LA used-vehicle dealer permit (if applicable) | Municipal fee | LAMC Section 103.205; additional to the state DMV license. |
Two-Year Renewal + 4-Hour CE + Form OL 45
The California used dealer license runs on a biennial — two-year — cycle. The DMV mails the renewal notice approximately 90 days before expiration. Renewal is filed on Form OL 45 and is conditioned on continuing education completion and an unbroken surety bond on file.
- 4 hours of continuing education with a DMV-approved provider every two years
- OL 25 bond maintained continuously — no lapse between cycles
- OL 45 renewal form filed before expiration with applicable renewal fee
- Any change of ownership, location, or DBA filed by amendment between cycles
- New manager or partner added mid-cycle requires Live Scan + amendment
CARS Act — Effective Oct 1, 2026
The federal Combating Auto Retail Scams (CARS) Rule layered on top of the California framework adds new advertising and disclosure obligations relevant to used dealers at the renewal point and on every transaction. The CARS Act effective date is October 1, 2026. Renewal cycles that cross that date will need to demonstrate compliance with the new advertising and add-on disclosure rules.
Common Pitfalls — Where California Used-Dealer Applications Stall
Most California used-dealer applications that take longer than the 120-day statutory window stall on one of the same handful of issues. The list below is in rough order of frequency, drawn from DMV Occupational Licensing patterns.
Failed location inspection
The location is short an element under Veh. Code §11712 — no signage, no posted hours, no separate office, no display area, or no zoning approval. The DMV investigator flags the deficiency and the application is held until the location is brought into compliance and re-inspected.
Missed Live Scan for one partner
A two-member LLC where only the operating partner submits Live Scan. The DMV requires the silent partner to be printed too. Until both are on file, the application does not advance.
Assuming exam = pre-licensing provider
Out-of-state applicants assume the 6-hour course covers the exam. It does not. The exam is administered by the DMV after the application is on file. A completion certificate alone is not a passing score.
BHPH operator without a CFL license
A buy-here-pay-here dealer that originates retail installment contracts in-house needs a California Financing Law license from the DFPI in addition to the DMV dealer license. The DMV does not flag this at application — the regulatory gap surfaces in the DFPI examination cycle and exposes the dealer to enforcement.
Bond filed on the wrong form
Generic surety bonds, bonds drawn on another state's form, or older OL 25 revisions with materially different language are rejected. The bond must be on the DMV-prescribed OL 25 (Rev. 3/2016) with the corporate surety power of attorney attached.
LA-City permit overlooked
Dealerships inside the City of LA limits that obtain the state DMV license but never file the LAMC §103.205 used-vehicle dealer permit with the Police Commission. The state license is in good standing, but the municipal permit gap exposes the dealer to enforcement action and inability to operate.
CE missed at renewal
4-hour continuing education forgotten in the second year of the cycle. The OL 45 renewal cannot be filed without it; the license expires before the dealer can catch up, forcing a re-application rather than a renewal.
California Used Motor Vehicle Dealer — FAQ
The questions the DMV Occupational Licensing Branch fields most often from first-time and re-applying used-dealer applicants.
Is the California used motor vehicle dealer bond $50,000 or is there a smaller amount?
Is California pre-licensing education a monopoly course like Texas or Florida?
How hard is the California DMV dealer exam?
Do all of my partners and managers have to do Live Scan fingerprinting?
Can I run a used dealership from my home garage or a self-storage unit?
How long does the DMV take to approve a used dealer application?
I want to buy-here-pay-here (BHPH). Is anything different at the license level?
Do I need a separate license to sell wholesale to other dealers?
How is the license renewed every two years?
Is the City of Los Angeles used-vehicle dealer permit a real, separate requirement?
Related California Resources
The used retail dealer license sits inside the broader California auto-dealer silo. The pages below cover the surrounding license classes, the cost detail, the renewal walkthrough, and the LA-specific compliance layer.
New (Franchised) Motor Vehicle Dealer
The franchised new-vehicle dealer license — $50,000 bond, NMVB fee, manufacturer franchise agreement.
Wholesale-Only Dealer
The wholesale-only license and the 25-vehicle threshold under Veh. Code 11710(b)(2).
How to Get Licensed
Step-by-step walkthrough of the California dealer licensing process from start to approval.
California Dealer Bond Cost
Premium tiers by credit, two-year payment options, underwriting factors, and the full cost picture.
Renewal Walkthrough
Form OL 45, the 4-hour CE requirement, and how to avoid the gap that forces re-application.
Dealer Bond Guide
The full statutory overview — Vehicle Code 11710, OL 25, OL 25B, OL 25C, OL 25E.
CARS Act Explained
The federal CARS Rule effective October 1, 2026 — advertising, add-ons, disclosures.
Los Angeles Auto Dealer
LAMC §103.205 municipal permit, LA zoning, Police Commission timeline, and city- specific compliance.
California Auto Dealer Hub
The top-level state hub linking every California dealer class, form, and compliance topic.
All content is researched from official state and federal sources (.gov) and verified before publication. BuySuretyBonds.com works with Treasury-certified, A-minimum rated surety carriers serving all 50 states.
Order Your California Used Motor Vehicle Dealer Bond
$50,000 surety bond on DMV Form OL 25, issued with the statutory principal language and corporate power of attorney attached. Ready for filing with your OL 12 application or OL 45 renewal.